Compromise in liquidation cannot be forced on an unwilling liquidator absent proof that it benefits the company.

In winding up, the court may sanction a compromise of a debt due to the company only where the liquidator, after investigation, states by affidavit that the compromise will benefit the company. The statutory power under the Companies Act operates as the liquidator's power with judicial sanction, and does not authorise the court to compel an unwilling liquidator to accept a compromise or further reduce the debt. Where the liquidator cannot affirm that the proposed reduction is beneficial, the statutory condition for sanction is not met, and the compromise must be refused.

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Issues: Whether the Court had jurisdiction to compel an unwilling liquidator to compromise a debt due to the company in liquidation, and whether a further reduction in the amount payable by the debtor could be ordered in the absence of a showing that the compromise would benefit the company.

Analysis: Rule 68 required the Official Liquidator to support any proposed compromise by affidavit stating that, after investigation, the compromise would be beneficial to the company. Section 234 of the Companies Act empowered the liquidator, with the sanction of the Court, to compromise debts and liabilities, but only as an act of the liquidator with judicial sanction. The Court relied on the English authorities to hold that this power does not include authority in the Court to compel a compromise against the liquidator's will. Since the liquidator could not state that the proposed reduction would benefit the company, the statutory condition for sanction was not satisfied.

Conclusion: The Court had no jurisdiction to compel the liquidator to accept a compromise, and the requested reduction was refused.

Final Conclusion: The petition failed because the Court could not force a compromise of the company's debt in liquidation absent the liquidator's satisfaction that it would benefit the company.

Ratio Decidendi: In a winding up, the Court may sanction a compromise proposed by the liquidator, but it has no power to compel an unwilling liquidator to accept a compromise of a debt due to the company.

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