Company court jurisdiction under section 185 upheld where the State acted as implied agent managing company assets.
Section 185 of the Companies Act, 1913 empowered the company court to require an agent of the company to pay or deliver money or property to which the company was prima facie entitled, and the State was treated as such an agent because it had managed the mills under court orders, rendered accounts, and deposited receipts in court. The later execution of a mortgage did not alter that relationship. The Court also held that the claim could properly be dealt with in the section 185 summary jurisdiction because the matter was conveniently capable of decision on the materials before it. The jurisdictional objection therefore failed, and the liquidator could proceed under the winding-up court's summary powers.
Issues: (i) Whether the company court had jurisdiction under section 185 of the Companies Act, 1913 to direct the State, which had been managing the company under orders of court, to account for and deliver the disputed amount to the official liquidator; (ii) Whether the claim could be dealt with under section 185 as a matter to which the company was prima facie entitled.
Issue (i): Whether the company court had jurisdiction under section 185 of the Companies Act, 1913 to direct the State, which had been managing the company under orders of court, to account for and deliver the disputed amount to the official liquidator.
Analysis: Section 185 authorises the company court, after a winding-up order, to require only the persons specified in the section, including an agent of the company, to pay or deliver money or property to which the company is prima facie entitled. The State had taken over management of the mills under orders of the company court, submitted accounts, and deposited receipts in court. On those facts, the relationship was treated as one of agency, and the fact that a mortgage was later executed did not alter that position. The Court therefore held that the State fell within the scope of persons amenable to section 185.
Conclusion: The jurisdiction of the company court under section 185 extended to the State in the facts of the case, and the objection to jurisdiction failed.
Issue (ii): Whether the claim could be dealt with under section 185 as a matter to which the company was prima facie entitled.
Analysis: Section 185 does not require an elaborate enquiry, but leaves the court discretion to decide whether a particular claim can conveniently be dealt with under that section. The Court accepted the lower court's view that the dispute could be considered within that summary jurisdiction and that the question of entitlement was suitably examinable on the materials before it.
Conclusion: The claim was properly entertainable under section 185 as one concerning property or money to which the company was prima facie entitled.
Final Conclusion: The objection to the company court's jurisdiction was rejected, and the liquidator was left entitled to proceed under the summary powers of the winding-up court.
Ratio Decidendi: A company court may invoke section 185 against a person who is an agent of the company by implication of law, and may summarily determine a claim where the court considers it conveniently capable of being decided on the question of prima facie entitlement.
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