1936 (4) TMI 9 - HC - Companies Law

Summary

Issues:
1. Application under section 235 of the Companies Act regarding payments made by directors after a winding-up petition had been presented.
2. Directors residing outside the jurisdiction of the Court.
3. Jurisdictional issues regarding serving processes on individuals outside the Court's jurisdiction.
4. Analysis of relevant sections of the Code of Civil Procedure.
5. Consideration of jurisdiction over a director residing in Bombay.
6. Examination of the Court's jurisdiction to inquire into the conduct of directors and compel repayment under section 235 of the Companies Act.

The judgment addresses an application under section 235 of the Companies Act concerning payments made by directors after a winding-up petition had been presented. The payment in question was made after the winding-up order had been issued, raising concerns about the misapplication of the company's assets. The directors involved were residing outside the jurisdiction of the Court, posing challenges in enforcing any orders against them. The Court highlighted the principle of international law that prohibits serving processes on individuals outside its jurisdiction, especially when enforcement of orders is not feasible. The judgment delves into the jurisdictional aspects, citing relevant sections of the Code of Civil Procedure to determine the Court's authority in such cases.

Regarding directors residing in England, the Court concluded that it lacked jurisdiction to issue orders against them due to their location outside British India. However, the judgment explored the unique situation of a director residing in Bombay, considering the jurisdictional implications under section 3 of the Companies Act. Despite the complexities, the Court acknowledged the need to examine the conduct of directors and potentially compel repayment under section 235. The judgment emphasized the Court's authority to inquire into such matters and directed an investigation into payments made by the directors, evaluating their compliance with relevant sections of the Companies Act. The Court's decision to allow the application against the director in Bombay reflected a nuanced approach to jurisdictional challenges and the application of legal provisions in such cases.