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Issues Involved:
1. Preliminary objections regarding the maintainability of the petition. 2. The validity of the call made by the company on shareholders. 3. Grounds for the appointment of a provisional liquidator. Issue-wise Detailed Analysis: 1. Preliminary Objections Regarding the Maintainability of the Petition: The respondent's counsel raised two preliminary objections: (a) the petition is barred due to a previous application being dismissed, and (b) the petitioners have no right to maintain the petition for winding up as they have not paid a further call made by the company. (a) The first objection was overruled. The previous petition was dismissed as premature because the petitioners had not held any shares for more than six months before presenting the petition. The petitioners were allowed to amend the petition but chose to withdraw it instead. Since the dismissal was due to prematurity and not on merits, the current petition is not barred. (b) The second objection was also overruled. The petitioners argued that the call made by the company was mala fide. According to Section 166 of the Indian Companies Act, the failure to pay a further call does not debar a contributory from maintaining a petition for winding up. The court found that the petitioners' objection to the validity and legality of the call required careful consideration and could not be dismissed as groundless or frivolous. 2. The Validity of the Call Made by the Company on Shareholders: The respondent argued that a further call of 25% on preference and ordinary shares was made at a directors' meeting on 6th March 1947, which the petitioners had not paid. The petitioners contended that the call was made mala fide to obstruct their petition for winding up. They claimed the meeting was not properly held or attended, as three out of four directors present were not legally recognized as directors. The court noted that while failure to pay a call could, in some cases, affect the right to maintain a petition for winding up, this was not such a case. The petitioners' objections to the call's validity warranted further investigation. 3. Grounds for the Appointment of a Provisional Liquidator: The petitioners presented four grounds for the appointment of a provisional liquidator: (1) The company defaulted in filing the statutory report and holding a statutory meeting. (2) The company did not start its business within a year of incorporation, constituting a ground for winding up under Section 162. (3) The substratum of the company is gone. (4) The company does not maintain proper books of account, and there are allegations of misappropriation of funds. The court found merit in the petitioners' complaints about the company's failure to file the statutory report and hold the statutory meeting. However, the court noted that the company had some justification due to criminal proceedings initiated by the petitioners, which resulted in the police seizing the company's records. The court also acknowledged that the company had not yet started its primary business but had made efforts to advance its business by setting up a workshop and buying machinery. Regarding the substratum, the petitioners argued that the government's refusal to grant a license for running an aircraft meant the company's substratum was gone. The respondent countered that the company had other objects it could achieve without government permission. On the issue of maintaining proper books of account, the court found that the petitioners' allegations required further investigation. There were grounds to think that the company's affairs were not in order and that stringent steps were necessary to protect the petitioners' and shareholders' rights. Conclusion: The court refused to appoint a provisional liquidator but made the following orders to protect the petitioners' and shareholders' interests: 1. The company's account books shall be audited by Messrs. S.P. Chopra and Company. 2. Proceedings in two pending suits involving the company shall remain stayed. 3. A general meeting of all shareholders shall be held to ascertain their wishes regarding winding up. 4. Mr. P.J. Kumar shall not withdraw any company funds without court permission. The court scheduled the case for further proceedings on 15th May 1947.
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