Court jurisdiction to compel payment is limited to statutory classes; post-petition payments creating creditor preference will not be validated.

Court power in winding-up is confined to persons and classes expressly identified by the Companies Act; the court cannot compel payment from parties outside those statutory classes, so payment orders against such persons are denied. Validation of payments made after presentation of the winding-up petition will not be granted where the transactions are not in the ordinary course or would unjustly prefer some creditors over others; post-petition payments that produce loss to other creditors or create undue preference are not validated and such applications are dismissed.

---

---

Issues: (i) Whether the Court has jurisdiction to order payment by persons from whom money is alleged to be due to the company in liquidation; (ii) Whether payments made after presentation of the winding up petition can be validated under Section 227(2) of the Indian Companies Act.

Issue (i): Whether the Court has jurisdiction to pass orders for payment against persons other than those specified in the statute.

Analysis: The question is determined by the scope of the statutory provisions empowering the court in winding up proceedings. Section 185 identifies contributories and certain agents and officers whose monies or property may be directed to the liquidator. Section 188 contemplates payment into a bank account of the official liquidator and is directed to persons from whom money is due in the capacities described by the Act. Authorities treating similar issues indicate that ordinary civil jurisdiction to pass payment decrees is not displaced except by specific statutory authority. The applications seek orders against persons not within the classes identified by the statute.

Conclusion: The Court has no jurisdiction to require payment by the persons claimed against; this conclusion is in favour of the respondents.

Issue (ii): Whether payments made after presentation of the petition should be validated under Section 227(2) of the Indian Companies Act.

Analysis: Validation under the provision requires consideration of whether the transactions were made in the ordinary course of business and whether validation would unjustly prefer some creditors over others. The governing principle is equality of creditors (pari passu) subject only to statutory priorities. Payments made that produce preference for creditors who were due at the date of petition, absent statutory priority or bona fide business necessity, are not normally to be validated. Where payments merely satisfy debts due at the petition date and result in loss to other creditors, validation is inappropriate. Ex parte decrees or compromises entered without proper representation of the company's and creditors' interests may be set aside by the liquidator.

Conclusion: The Court will not validate the post-petition payments to the creditors in question; this conclusion is in favour of the respondents.

Final Conclusion: The statutory scheme limits the court's power to order payments to the classes identified by the Companies Act and validation under Section 227(2) will not be granted where it would create undue preference over other creditors; accordingly the applications for payment and for validation are dismissed.

Ratio Decidendi: The court lacks power to order payment by parties outside the classes specified in Sections 185 and 188 of the Indian Companies Act, and Section 227(2) will not be used to validate post-petition transactions that operate to prefer some creditors over others contrary to the pari passu principle.

---