Priority in case

of assets.

in winding-up any Company in such order of priority as the Court thinks just(i).

Sec. 110 of the English Companies' Act (25 and 26 Vic., e. 89), 1862; and sec. 130 of the Indian Companies' Act X. of 1866, verbatim.

Cf. sec. 86 of Act XIX. of 1857.

(i) See sec. 188, post, as to the costs of a voluntary winding-up.

In England the rule of the Court is that in the first place the costs of the petition for winding-up are to be paid out of the assets, next the costs of the winding-up, and then the remuneration of the Official Liquidator." Buckley, 4th ed., 264, and cases there cited; and see Palmer's Precedents, 3rd ed., p. 517.

The section applies to costs incurred by the liquidator in the course of the winding-up, and the Court has no discretion to order payment of anything except legal demands on the Company, see IN RE Hull Central Drapery Co., 15 Ch. Div., 326, cited supra.

In IN RE Dronfield Silkstone Coal Co. (No 2) 23 Ch. D., 511, Chitty J. of insufficiency held that where the assets of a Company in compulsory liquidation are insufficient for payment of the costs of winding-up, the official liquidator is not entitled to any remuneration; and that where in the compulsory winding-up of a Company the assets are insufficient for the payment in full of costs, the costs of realisation are payable out of the assets in priority to costs incurred in internal litigation, and these latter costs, including those of the liquidator, are payable rateably, without regard to priority in the dates of the orders under which such costs have been directed to be paid; net followed in Dominion of Canada Co. 27 Ch. Div. 33. 159. When the affairs of the Company have of Company been completely wound-up, the Court shall make an order that the Company be dissolved from the date of such order, and the Company shall be dissolved accordingly (i).

Dissolution

Registrar to make minute

Sec. 111 of the English Companies' Act (25 and 26 Vic., c. 8), 1862; and sec. 131 of the Indian Companies' Act X. of 1866, verbatim.

(i) See rules 60-62, post, and Form No. 49, post; and sec. 187, post, as to voluntary winding-up.

See IN RE Carwar Co., I. L. R., 6 Bom. 640, cited in notes to sec. 187 and 195, post.

160. Any order so made shall be reported by of dissolution the official liquidator to the Registrar, who shall of Company. make a minute accordingly in his books of the dissolution of such Company.

Penalty for

Sec. 112 of the English Companies' Act (25 and 26 Vic., c. 89), 1862; and sec. 132 of the Indian Companies' Act X. of 1866, rerbatim.

Cf. sec. 92 of Act XIX. of 1857.

‘Official liquidator" does not include the liquidators in a winding-up under supervision, see IN RE Carwar Co., I. L. R. 6 Bom, 640.

161. If the official liquidator makes default in not reporting reporting to the Registrar, in the case of a Company

dissolution of Company.

being wound up by the Court, the order that the Company be dissolved, he shall be liable to a penalty not exceeding one hundred rupees for every day during which he is so in default.

Sec. 113 of the English Companies' Act (25 and 26 Vie., G. 89), 1862, substituting "one hundred rupees" for "five pounds" in that section; and sec. 133 of the Indian Companies' Act X. of 1866, verbatim.

In the English Companies' Act of 1862 here follows section 114, providing that a duly registered petition for winding-up by the Court shall constitute a lis pendens within the terms of 2 and 3 Vic., c. 11. The section however is repealed by 30 and 31 Vic., c. 47 s. 1, from the passing of that Act.

Extraordinary Powers of Court.

Court to summon per

162. The Court may, after it has made an order Power of for winding-up the Company, summon(i) before it any officer(ii) of the Company, or person known or suspect- sons before ed to have in his possession any of the estate or it suspected effects(ii) of the Company, or supposed to be indebted to the Company, or any person whom the Court may Company. deem capable of giving information concerning the trade, dealings, estate or effects(iii) of the Company.

If any person so summoned, after being tendered a reasonable sum for his expenses, refuses to come. before the Court at the time appointed, having no lawful impediment (made known to the Court at the time of its sitting and allowed by it), the Court may cause such person to be apprehended and brought before the Court for examination(iii).

The Court may require any such officer or person to produce any documents(ii) in his custody or power relating to the Company. Nevertheless, in cases where any person claims any lien on documents produced by him, such production shall be without prejudice to such lien, and the Court shall have jurisdiction in the winding-up to determine all questions relating to such lien.

Sec. 115 of the English Companies Act (25 and 26. Vie., c. 89), 1862, substituting "documents" for "books, papers, deeds, writings, or other documents" in that section; and sec. 131 of the Indian Companies' Act X, of 1866, verbatim.

Cf. sec. 75 of Act XIX. of 1857.

(i) See Form No. 47, post.

(ii) See sec. 149, supra; and sec. 214, post. (iii) See sec. 163, post.

of having

property of

Appeal from order.

Liquidator's right.

Discretion of the
Comt.

Witness assisted by Counsel.

Lien of
Solicitor.

As to who is a person capable of giving information in reference to the assets of the Company, see Massey v. Allen, 9 Ch. D., 164.

The Court of Appeal will not interfere, unless in an extreme case, with the discretion of the judge in the Court below, who has summoned a person for examination under this section, IN RE Gold Co., 12 Ch. Div., 77. And semble, a person so summoned to be examined has no locus standi to appeal against the order directing him to attend for examination, ibid.

In Whitworth's case, 19 Ch. Div., 118, it was held that if the jurisdiction to order his examination exists the witness has no locus standi to appeal against the order.

A voluntary liquidator who applies to the Court, under sec. 138 of the English Companies' Act, 1862 [which corresponds with sec. 182, post], for an order under this section to examine a person in respect of the affairs of the Company, is not entitled as of right to the order, but must satisfy the Court that it will be just and beneficial for the purposes of the winding-up. And if he has brought an action on behalf of the Company against an officer of the Company, and has administered interrogatories which have been fully answered by the defendant, he will not be entitled to an order under this section for the examination of the defendant, unless he satisfies the Court that, notwithstanding the interrogatories already administered, he has a strong case for a further examination, IN RE Metropolitan Bank, Hieron's case, 15 Ch. Div., 139. Cf. ex parte Nicholson, IN RE Wilson, 14 Ch. Div., 203.

The examination under this section is as a general rule entrusted to the liquidator, but it is discretionary with the Judge whether he will entrust either the whole or any part of the examination to creditors or contributories, and whether he will or will not confine the examination within certain limits, Whitworth's case, 19 Ch. D., 118.

The Court has a discretion to allow admitted creditors of a Company in course of winding-up, to attend the examination of witnesses under this section. IN RE Greys Brewery Co., 25 Ch. D., 400, where Chitty, J. enunciates the object and scope of the section.

As to the right of the person summoned to have counsel and solicitor present on his behalf, and to be re-examined for the purpose of explaining his examination in chief, see IN RE Cambrian Mining Co., 20 Ch. D., 376. Notes of his examination may also be taken and carried away, but they must only be used for the purpose of the re-examination, ibid.

In IN RE Nursey Kessowjee and Co., I. L. R. 3 Bom. 270; it was held that a witness summoned under the analogous section (36) of the Indian Insolvent Act (11 and 12 Vic., c. 21), could not claim the assistance of counsel as of right; but counsel might properly be allowed to attend under special circumstances.

As to the discretion of the Court to order the production of documents by a witness summoned under the analogous section (96) of the English Bankruptcy Act (32 and 33 Vic., c. 71), 1869, see es parte Tatton, IN RE Thorp, 17 Ch. Div., 512.

And as to a witness summoned under the last-mentioned Act refusing to answer, upon the ground that he might thereby criminate himself, see ex parte Reynolds, IN RE Reynolds, 20 Ch. Div., 294 [in England]. In India the rule is different, see secs. 132, 146 of the Evidence Act I. of 1872.

If a solicitor receives documents pending the liquidation of a Company he cannot claim to retain them by virtue of his lien, so as to interfere with the due prosecution of the liquidation and the due carrying out of the duties of the liquidator. IN RE Capital Fire Insurance Association, 24 Ch. Div., 408.

In the English Companies' Act, 1862, here follows a section (116) containing special provisions as to the Court of the Vice-Warden of the Stannaries.

Court.

163. The Court may examine upon oath, either Examination by word of mouth or upon written interrogatories, of parties by any person appearing or brought before it in manner aforesaid(i), concerning the affairs, dealings, estate or effects of the Company, and may reduce into writing the answers of every such person, and require him to subscribe the same.

Sec. 117 of the English Companies' Act (25 and 26 Vie., c. 89), 1862; and sec. 135 of the Indian Companies' Act X. of 1866, verbatim.

(i) Under section 162.

By sec. 2 (Cl. 17) of the General Clauses Act I. of 1868, "onth" "swear and "affidavit" shall include affirmation, declaration, affirming and declaring in the case of persons allowed by law to affirm or declare instead of swearing.

As to interrogating a member of a Company which is a party to an action, see Berkeley v. Standard Discount Co., 9 Ch. D., 643.

'Affairs" in this section is substituted for " trade" in the preceding section, and makes this section rather wider, see Massey v. Allen, 9 Ch. D., 168.

164. The Court may, at any time before or after Power to it has made an order for winding-up a Company, arrest contributory about upon proof being given that there is probable cause to abscond or for believing that any contributory(i) to such Company to remove or conceal any is about to quit British India or otherwise abscond, of his or to remove or conceal any of his goods or chattels, property. for the purpose of evading payment of calls, or for avoiding examination in respect of the affairs of the Company, cause such contributory to be arrested, and his books, papers, monies, securities for monies, goods and chattels to be seized, and him and them to be safely kept until such time as the Court may order.

Sec. 118 of the English Companies' Act (25 and 26 Vie., c. 89), 1862, substituting "British India" for "United Kingdom" in that section; and sec. 136 of the Indian Companies' Act X. of 1866, verbatim.

(i) Sec. 124, supra.

Claims upon the immoveable property of a contributory are not dealt with by this section, but must be dealt with according to the general law. Se: Buckley, 4th ed., 274.

lative.

165. Any powers by this Act conferred on the Powers of Court shall be deemed to be in addition to, and not Court cumuin restriction of, any other powers subsisting of instituting proceedings against any contributory, or the estate of any contributory, or against any debtor of the Company, for the recovery of any call or other

1

Power to enforce orders.

Order made

to be

sums due from such contributory or debtor, or his estate; and such proceedings may be instituted accordingly.

See. 119 of the English Companies' Act (25 and 26 Vic., c. 89), 1862; and see. 137 of the Indian Companies' Act X. of 1866, rerbatim.

Enforcement of, and Appeal from, Orders.

166. All orders made by a Court under this Act may be enforced in the same manner in which decrees of such Court made in any suit pending therein may be enforced.

Sec. 120 of the English Companies' Act (25 and 26 Vic.. c. 89), 1862, directs that all orders made by the Court of Chancery under that Act may be enforced in the same mauner as orders of that Court in any suit pending therein, and adds a provision with reference to the Court of the Vice-Warden of the Stannaries; sec. 138 of the Indian Companies' Act X. of 1866, verbatim.

As to enforcement of decrees see the Civil Procedure Code XIV. of 1882, Chap. XIX. ss. 223-343.

In the English Companies' Act, 1862, here follows section 121, which gives a power to the Courts in Scotland to order contributories in Scotland to pay calls.

167. Any order made by a Court for or in the in any Court course of the winding-up of a Company under this Act shall be enforced in any part of British India, enforced by other Courts. other than that in which such Court is situate in the Court that would have had jurisdiction in respect of such Company if the registered office of the Company had been situate in such other part, and in the same manner in all respects as if such order had been made by the Court that is hereby required to enforce the same.

Cf. sec. 122 of the English Companies' Act (25 and 25 Vic., c. 89), 1862, which provides for orders made in England being enforced in Ireland and Scotland; sec. 139 of the Indian Companies' Act X. of 1866, verbatim.

Cf. the provisions in the Civil Procedure Code for the execution by one Court of decrees passed by another. Act XIV. of 1882. Chap. XIX. A.

In IN RE the City of Glasgow Bank, 14 Ch. D., 628, Jessel, M. R. directed (following IN RE Hollyford Copper Mining Co., L. R. 5 Ch., 93) that where an order for a call had been made by the Court of Session in Scotland in the winding-up of a Company by that Court, and it became necessary to enforce the call against contributories resident in England, the order should be made an order of the Chancery Division in England.