M.P Nayagam v. A.R Krishnaswami

(Delivered by The Chief Justice.)

The appellant engaged the respondent, who is an Advocate of this Court, to appear for him in an application for the winding up of a company registered under the Indian Companies Act. An order for winding up was passed and the Official Receiver who functions as the Official Liquidator was, as required by law, called upon to settle a list of the creditors. The appellant is a creditor of the company and in the proceedings before the Official Liquidator the respondent appeared on behalf of the appellant. A dispute arose with regard to the fees which the respondent claimed for this work. Thereupon he applied to the Master for his bill of costs to be taxed under O. 5, R. 20, of the Original Side Rules. The learned Master held that rule did not apply, because in his opinion the proceedings before the Official Liquidator were not proceedings in which a party or an Advocate could apply for taxation. Accordingly he dismissed the application. On appeal, the order of the Master was reversed by Bell J. and he was directed to proceed with the taxation. The appeal is from the order of the learned Judge.

We consider that the order of the learned Judge is right. R. 5 of the rules framed under the Indian Companies Act states that the High Court Fees Rules, 1933, as amended from time to time, shall apply to all proceedings under the Act and the rules framed under it, provided that, if the Judge so directs the costs of an Original Petition shall be taxed by the Taxing Officer and the provisions of O. 5, R. 19 of the High Court Fees Rules shall apply to the taxation, or the Judge may himself fix the amount of costs. Therefore the taxation rules of this Court apply to proceedings under the Companies Act or the rules framed under it.

In accordance with R. 73 of the Companies Rules the Judge directed the Official Liquidator to take steps to settle the list of creditors. R. 74 says that unless the Judge orders that a creditor or a class of creditors shall be admitted without proof, every creditor shall prove his debt. In examining the proof of a debt the Official Liquidator has to proceed under R. 84 and he may by virtue of R. 88 administer oaths and take affidavits. If a creditor is dissatisfied with the decision of the Official Liquidator, he may appeal under R. 85 to the Judge. In settling the list of creditors the Official Liquidator acts in a judicial capacity and his order stands subject to the right of appeal to the Judge. This being the case, O. 5, R. 20, applies and the application which the respondent made for the taxation of his bill of costs lay. It is somewhat surprising that the appellant has taken objection to this course. If he had his way, he would put the respondent to the expense of a suit rather than have the dispute as to his fees settled in this simple way.

The appeal fails and is dismissed with costs.

N.R.R