TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
When case Id is present, search is done only for this
of 
of 
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of of 
All Case Laws
of of All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of <h1>High Court grants leave to implead in creditor dispute on secured creditor rights</h1> <h3>Exchange Bank of India & Africa Ltd. Versus Janda Rubber Works Ltd.</h3> The High Court of Judicature at Bombay granted leave to the Official Liquidator of the Exchange Bank Ltd. to implead the liquidator of Janda Rubber Works ... Winding up – Suits stayed on winding-up order Issues:Application under section 171 of the Companies Act for leave to implead Janda Rubber Works Ltd. in voluntary liquidation as a party defendant; Dispute regarding Universal Rubber Works ownership and creditor claim; Jurisdiction of the Court in light of Banking Act provisions.Analysis:The case involves an application under section 171 of the Companies Act by the Exchange Bank of India and Africa Ltd., in liquidation, seeking leave to implead Janda Rubber Works Ltd., in voluntary liquidation, as a party defendant. The petitioner bank claims to be a secured creditor of Universal Rubber Works, alleging a significant sum due and payable. The dispute centers around the ownership of Universal Rubber Works, with the bank initiating a suit in the High Court of Judicature at Bombay against the firm and its partners, seeking recovery and claiming to be a secured creditor. The liquidator of Janda Rubber Works Ltd. contends that the suit is not bona fide and suggests collusion to protect an individual. However, the court opines that the matter involves multiple questions best addressed in a regular suit rather than under the Companies Act.The court refers to legal precedents emphasizing the rights of secured creditors to enforce their securities and proceed with actions, particularly in cases involving disputes with the company. Notably, the court highlights the importance of allowing the petitioner to prosecute the suit to adjudicate on the issues between the parties properly. The court rejects the argument that recent Banking Act provisions affect the jurisdiction of the court under section 171 of the Companies Act, deeming it unnecessary to decide on this matter due to the circumstances of the case.Regarding conditions for granting leave, the court declines to impose restrictions on accessing company records or interfering with the receiver appointed by the Bombay High Court. However, the court orders the petitioner to provide security for costs before impleading the liquidator of Janda Rubber Works Ltd., emphasizing the need for such security due to the bank being in liquidation. Ultimately, the court grants leave to the Official Liquidator of the Exchange Bank Ltd. to implead the liquidator of Janda Rubber Works Ltd., with costs to abide the result of the suit, set at Rs. 150.
TaxTMI 
TaxTMI 
