1934 (6) TMI 21 - HC - Companies Law

Summary

Issues:
1. Application for directing respondent to be publicly examined as a director of the Bank.
2. Objection raised by respondent on the grounds that the company is not in liquidation.
3. Resolution passed regarding suspension of payments and voluntary winding-up of the Bank.
4. Examination of whether the company is in voluntary liquidation as per Section 203(3) of the Companies Act.

Analysis:
The petitioners, acting as liquidators of the Burma Loan Bank, Limited, filed an application seeking an order to direct the respondent, described as the ex-managing-director of the Bank, to attend before the Court for a public examination regarding the conduct of the Bank's business and his own conduct as a director. The respondent objected to the order, arguing that the company was not legally in liquidation. The Court acknowledged the power to grant the application under Section 196 of the Companies Act only if the company is in liquidation. A resolution was passed by the Bank's directors to suspend payments to depositors, followed by a notice for an extraordinary general meeting to consider voluntary winding-up and appointment of liquidators, as per the Articles of Association.

The meeting held to discuss liquidation and potential reconstruction of the Bank was adjourned to consult with creditors. Subsequently, another meeting was convened where a resolution was passed to wind up the Bank voluntarily with appointed liquidators. The Court referred to Section 203 of the Companies Act, which outlines conditions for voluntary winding-up, including passing an extraordinary resolution. The petitioners argued that the company was in voluntary liquidation based on an extraordinary resolution under Section 203(3). However, the Court found that the necessary requirements for an extraordinary resolution were not met, as the notice did not specify the intention to propose the resolution as such.

Due to the failure to pass an extraordinary resolution as required by the Act, the Court concluded that the company was not in voluntary liquidation as per the provisions of the law. Consequently, the Court held that it lacked the authority to order the respondent's examination under Section 196. Therefore, the application by the petitioners was dismissed as the company was not in liquidation in accordance with the statutory requirements.