M.P. Nayagam vs A.R. Krishnaswami

Leach, C.J.—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 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 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 Order 5, Rule 20, Original Side Rules. The

learned Master held that 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. Rule 5 of the rules framed under the 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 Order 5, Rule 19, 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 Rule 73, Companies Rules, the Judge directed the Official Liquidator to take steps to settle the list of creditors. Rule 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 Rule 84 and he may by virtue of Rule 88 administer oaths and take affidavits. If a

creditor is dissatisfied with the decision of the Official Liquidator, he may appeal under Rule 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, Order 5, Rule 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.