Section 457 of Companies Act, 1956

Last updated: 20 January 2009

Court :
High Court

Brief :
Section 457 of the Companies Act, 1956 - Winding up - Powers of liquidator - Applicant-company had rented plant and machinery to ‘O’ in connection with a project - On completion of project, applicant demanded plant and machinery but ‘O’ went into liquidator and official liquidation had taken charge of entire properties of ‘O’ - Applicant filed an application seeking a direction to official liquidator to return its plant and machinery - Court allowed that application but it was found plant and machinery in question was taken away by ‘C’ bank, dismantled and sold as scrap to third parties - Applicant filed instant application seeking a direction to official liquidator to pay certain sum as compensation for wrongful and illegal removal of plant and machinery belonging to it - Application was opposed by official liquidator contending that complicated question of facts were raised by and between parties which should be decided by competent Court and that since applicant as well as ‘C’ bank were claiming to be owners, only after ownership of goods was determined an application could be made to quantify loss of concerned party - Whether since there was a dispute regarding ownership of goods, appropriate course would be to relegate applicant to take recourse to appropriate proceedings against all parties including those who had purchased dismantled goods as scrip from site - Held, yes - Whether, therefore, instant application was to be dismissed - Held, yes

Citation :
Al Quireshi Pipe Coating Terminal vs Mineral Sales Pvt. Ltd.( Company Applicaion No. 827 of 2006 & Company Petition No. 970 of 1997)