1959 (4) TMI 14 - HC - Companies Law

Previous Official Liquidator Retains Position Under New Act: Legal Clarification on Appointments

The court held that the previous official liquidator appointed under the old Companies Act retained his position despite the appointment of a new official ... Winding up – Appointment of official liquidator Issues:Interpretation of provisions of old and new Companies Act regarding official liquidator's appointment and removal.Analysis:The judgment revolves around the appointment and removal of an official liquidator in a winding-up case under the Companies Act. The key issue was whether the appointment of the new official liquidator, Shri Mardia, was valid, or if the previous official liquidator, Shri Bohra, still held the position. The court analyzed the provisions of the old and new Companies Act to determine the legality of the appointments.The court noted that the winding-up proceedings were initiated under the old Companies Act, and the appointment of Shri Bohra as the official liquidator was made before the new Act came into force. The appointment of Shri Mardia was under the new Act, but the court clarified that this appointment did not automatically remove Shri Bohra from his position. The court emphasized that the order substituting Shri Mardia was specific to the appeal and did not constitute removal under the relevant provisions of the old Act.Reference was made to Section 647 of the new Act, which stipulates that proceedings initiated before the new Act's commencement shall continue under the old Act. The court highlighted that the appointment under the new Act applies to matters governed by the new Act, and the appointment under the old Act remains valid unless removed for due cause as per Section 176 of the old Act.The court also considered the High Court Rules under the old Companies Act, which provide a mechanism for the removal and appointment of an official liquidator. However, the court emphasized that these rules are subject to the Act's provisions, and removal can only occur upon showing due cause.Ultimately, the court held that Shri Bohra continued to be the official liquidator in the case, emphasizing that the appointment of Shri Mardia under the new Act was effective only concerning matters governed by the new Act. The judgment clarified the distinction between appointments under the old and new Acts, ensuring that each appointment's validity was assessed based on the relevant statutory provisions.The court directed the parties to bear their own costs and ordered the copy of the judgment to be sent to the District Judge who made the reference, providing a comprehensive resolution to the issues surrounding the official liquidator's appointment and removal in the context of the old and new Companies Act.