1969 (3) TMI 62 - HC - Companies Law

Summary

Issues Involved:
1. Validity of the appointment of the liquidator.
2. Removal of the current liquidator and appointment of a new one.
3. Investigation of alleged embezzlement by the deceased parties.

Detailed Analysis:

1. Validity of the Appointment of the Liquidator:
The primary issue is whether the respondent was validly appointed as the liquidator of the company. The court examined the events of the extraordinary general meeting held on July 26, 1963, where the applicant and the respondent were the only attendees. The applicant proposed himself as chairman, while the respondent proposed himself. After a poll, the respondent declared himself chairman and proposed himself as liquidator, leading to the applicant's withdrawal from the meeting. The court concluded that once the applicant left, the meeting ceased to be valid as a single shareholder cannot constitute a meeting. This was supported by the precedent set in Sharp v. Dawes [1876] 2 QBD 26 and In re Sanitary Carbon Co. [1877] WN 223, where it was established that a meeting requires more than one person. Therefore, the respondent's appointment as liquidator was deemed a nullity.

2. Removal of the Current Liquidator and Appointment of a New One:
Given the invalidity of the respondent's appointment, the court considered whether an independent liquidator should be appointed under section 304(2) of the Companies Act, 1948. The court emphasized the importance of appointing a liquidator who is wholly independent of the Oppenheim family due to the existing family feud and allegations of embezzlement. The applicant's nominee, Mr. Walker, was not appointed because his firm had connections with the respondent's brothers-in-law, and the court preferred someone with no connections to the family. The court decided to refer the matter back to chambers for the appointment of an independent liquidator, ensuring the liquidation process remains unbiased and in the best interest of all parties involved.

3. Investigation of Alleged Embezzlement:
The respondent alleged that his deceased parents had embezzled company funds by pocketing premiums from leases and hiding the money in various forms, including overseas bank accounts, jewelry, and cash. He claimed that large sums of money and valuables were removed by his brothers-in-law on the night of his father's death. The court did not express a view on the validity of these allegations but stressed that any investigation should be conducted by an independent liquidator. This would avoid any conflicts of interest and ensure a fair and thorough examination of the claims.

Conclusion:
The court concluded that the respondent was not validly appointed as liquidator due to the lack of a valid meeting. The court also emphasized the necessity of appointing an independent liquidator to handle the liquidation process impartially, given the family disputes and serious allegations of embezzlement. The matter was referred back to chambers to appoint an independent liquidator, ensuring the interests of all parties are protected and the liquidation process is conducted fairly.