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Madras High Court
Isack Jesudasen Pillai vs Ramaswamy Chetty, The Official … on 2 December, 1903
Equivalent citations: (1904) 14 MLJ 345


1. A preliminary objection is taken that notice was not given within the three weeks required by Section 169 of the Companies Act of 1882- Without deciding what this “notice” is, we think, that if such notice is necessary, the present is a fit case for extension of the time.

2. We accordingly extend the time to the 27th July 1903, the date on which, notice was, in fact, given.

3. On the merits we think that the order of the learned Judge dismissing the petition is wrong.

4. The petitioner admittedly failed to bring forward his claim within the time fixed in the notice published under Section 156 of the Act; but this omission does not preclude him from coming in at a later stage to prove his claim, nor does it necessitate his resorting to a suit to be instituted with special leave of the Court under Section 136, as contended by counsel for the Official Liquidator. The only penalty for failure to come in within the time stated in the notice is the penalty prescribed in the latter part of Section 169 viz., that the claimant is “excluded from the benefit of any distribution made before such debts are proved,” that is, he can only claim a proportionate share in such assets as may remain undistributed at the time when he proves his claim and without disturbing any distribution made before such proof. This was decided in In re General Rolling Stock Co.,–Joint Stock Discount Co.’s Claim L.R. 7 Ch. 646, in regard to the English Companies Act, 1862, the provisions of which are substantially the same as those of the Indian Act. The claimant in the present case is admittedly a creditor of the Company.

5. We must, therefore, set aside the order of the learned Judge and direct that the claim of the petitioner be entertained by the liquidator and disposed of according to law.

6. Each party will bear his costs hitherto incurred before the learned Judge and the taxed costs of this appeal will be paid to the appellant by the respondent. The taxed costs of the Official Liquidator as between attorney and client is to be paid out of the fund.

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