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TMI Blog1930 (9) TMI 13X X X X Extracts X X X X X X X X Extracts X X X X ..... der an appeal was filed and, on 5th November, 1924, the Appellate Court set it aside and remanded the petition to the Original Side for fresh disposal. The matter then came up before Beasley, J., and on 9th April, 1927, he made an order referring two questions to the Official Referee. With one of those questions we are directly concerned. That related to the debt now claimed as due by the creditor. It was then pleaded that that debt was discharged either by payment or adjustment on 31st December, 1921. The Official Referee submitted his report, finding, inter alia, that the debt due to the applicant was not discharged as alleged. Beasley, J. (as he then was) accepted the Official Referee's findings, found that the company's affairs were in a very unsatisfactory state and made an order dated 16th November, 1927, directing the company to be compulsorily wound up. Mr. Venkata Rao, by dubious methods (this is the effect of the judgment of Beasley, J.) acquired a dominant position in the company and by adopting an aggressive and high-handed attitude, used that position to gain dishonest advantage for himself, his relations and friends. A firm known as "K.V.S.R." which, as the learne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r. Venkata Rao admitted on 13th June, 1922, that the debt was subsisting. It is, therefore, fairly clear that these entries of payment were made not on 31st December, 1921, the date they bear, but sometime subsequent to 13th June, 1922. There was an "audited balance sheet" prepared in September, 1922, as distinguished from the "unaudited balance sheet" to which I have referred. In this balance sheet the debt due to the creditor, is shown as having been discharged. I understand that among the numerous charges made in this winding-up petition, there is a complaint against the accuracy of this balance sheet. With that I am not at present concerned, but the fact that emerges is that the impeached entries must have been made after 13th June, 1922, the date of Venkata Rao's affidavit, and before 27th September, 1922, the date of the "audited, balance-sheet." It is also noticeable that in the unaudited balance sheet, the amount shown as cash in the hands of the treasurers is Rs. 33,000 odd, whereas in the audited balance sheet it dwindles down to a little over Rs. 12,000. This is, of course, consistent with the theory of payments having been made between these two dates. Such payments mus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mudaliar, for a gentleman holding 9 shares. On behalf of these shareholders I am asked to treat the settlement as binding. Then there are three creditors of the company, two represented by Mr. Somayya and one by Mr. T. Krishnaswami Ayyangar. On behalf of these creditors also it is stated that the settlement should be treated as binding. In the view that the settlement is beneficial to the company the liquidator now concurs. My decision, therefore, is that the settlement dated 10th December, 1926, must be taken as binding. In regard to this debt there is a further question raised. In the case of a winding-up by the Court, the winding-up dates from the presentation of the petition : section 168, Companies Act. In this case nearly six years elapsed between the presentation of the petition and the winding-up order. I have already said that the petition was presented on 8th May, 1922, and the winding up order was made on 9th April, 1927. The question I am asked to decide is, whether interest is to be computed or not subsequent to the winding up. It is not disputed that the debt carries interest. The law on this point is stated thus in Palmer's Company Law: Edn. 12, p. 439. "When ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r wants my direction in respect of this debt. In the light of my judgment, the parties are directed to bring in a statement showing the amount due to the applicant. The matter will stand adjourned a week for this purpose. The applicant's costs, which I fix at Rs. 400, must be paid out of the assets. I do not propose to allow the liquidator his costs, but as he does not press for them, I need not give my reasons. I shall now deal with the question of unpaid dividends. During the pendency of the petition for winding up, dividends were declared for 1931-25 (both years inclusive). Mr. Venkata Rao, as a part of the general policy he has been pursuing, preferred such of the shareholders as were his friends and relations and paid them the dividends due and made default in regard to the rest. Some of the shareholders belonging to the latter class now apply that the liquidator should be directed to pay them also the dividends declared. To place all the shareholders on a footing of equality, I must comply with this application. The liquidator, after satisfying himself that the dividends claimed are due, shall make the payments. If he feels any doubt, the matter may be brought up before ..... X X X X Extracts X X X X X X X X Extracts X X X X
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