1935 (11) TMI 20 - HC - Companies Law

Court affirms payment order, validates liquidator appointment, deems application timely. Appeal dismissed, costs to respondent.

Shanti Lal Versus Lyallpur Bank, Ltd., (In Liquidation)

The court affirmed the validity of the payment order made by the District Judge, ruling in favor of the respondent. It found the Punjab Co-operative Bank, ... Winding up – Delivery of property to liquidator Issues:1. Competency of the bank to act as a liquidator and the appointment of Daulat Ram.2. Timeliness of the application.3. Necessity of presentment of the promissory note for payment.Analysis:Competency of the Bank and Appointment of Daulat Ram:The appellant raised objections regarding the competency of the Punjab Co-operative Bank, Ltd. to act as a liquidator and the appointment of Daulat Ram to represent the bank in the liquidation proceedings. The appellant contended that the bank was not authorized to delegate its authority to another person. However, the court found that the bank had been appointed as a liquidator and had accepted the position, making the legality of the appointment unquestionable. The court noted that Daulat Ram was authorized to manage the liquidation work on behalf of the bank, as evidenced by a resolution passed by the bank's directors. The court concluded that Daulat Ram was the recognized agent of the bank in liquidation matters, and his actions on behalf of the bank were deemed valid.Timeliness of the Application:The application for a payment order was challenged on the grounds of being time-barred. The liquidators claimed exemption from the limitation period based on a document signed by Lala Jairam Das, acknowledging liability under the promissory note. The court found that the document served a collateral purpose of proving acknowledgment of liability and part payment under the promissory note, thus extending the time for the application. The court accepted the document as admissible evidence for the stated purposes, thereby justifying the timeliness of the application.Necessity of Presentment of the Promissory Note:The issue of whether presentment of the promissory note for payment was necessary was raised by the appellant. The court determined that presentment was not required in this case as the promissory note was payable on demand. Additionally, it was established that a significant amount had been paid by Lala Jairam Das to the bank, further negating the necessity of presentment. The court cited Section 76(c) of the Negotiable Instruments Act, stating that presentment may not be necessary to charge the maker of the promissory note. Ultimately, the court found no merit in the appellant's contention regarding the necessity of presentment.In conclusion, the court dismissed the appeal, ruling in favor of the respondent and ordering the appellant to bear the costs. The judgment affirmed the validity of the payment order made by the District Judge, emphasizing the competency of the bank as a liquidator, the timeliness of the application, and the absence of a requirement for presentment of the promissory note for payment.