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TMI Blog1932 (3) TMI 17X X X X Extracts X X X X X X X X Extracts X X X X ..... vinces and the managing agents were Messrs. Chakaravarti and Company. Two or three years later, the appellants Messrs. Haribans Prasad and Ayodhia Prasad, who are brothers, took over the managing agency, and the head office of the company was shifted to Delhi. The nominal capital of the Company was 50 lacs of rupees, of which 30 lacs is stated to have been issued. The amount actually paid up was, however, Rs. 1,10,000 odd. Till 1927 no progress appears to have been made in setting up a sugar mill; not even a site therefor had been acquired, Accordingly, on the 19th of April, 1927, an application for the compulsory winding up of the company was presented by a share-holder in the Court of District Judge, Delhi, and on the 25th of May, 1927, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... when their appeal against the order of the District Judge for the compulsory winding up of the company was dismissed by the High Court. In addition to this, they claimed a further lien for Rs. 14,027-11 as expenditure incurred by them on behalf of the company but not entered in its books at the time, and Rs. 2,523-4 as litigation expenses for defending and opposing the application for the liquidation of the company. In order to support their contentions, the appellants applied for inspection of the books of the company which were in the possession of the liquidator. This application came up for hearing before Mr. Niamat Khan, Officiating District Judge on the 5th of April, 1930, and was granted by him. The learned Judge, however, passed a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not to have gone into the claim of the appellants as lien-holders in such great detail, nor should he have expressed himself so strongly on the merits, thus dismissing their objection to all intents and purposes before they had a chance of establishing their allegations. In my opinion, there is some justification for this complaint. It appears from the record that the appellants had filed a lengthy written statement, in support of their objection, and this gave rise to several points, which had not yet been put in issue, nor had the parties been given time to produce evidence in support of their respective cases. The only question before the Court at this stage was whether Mr. Niamat Khan was justified in passing the interim order req ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 3,000 per mensem though they admit that they never drew this remuneration during the time that the company was in existence. They claim a further lien for certain expenses alleged to have been incurred by them on behalf of the company, though it is conceded that this expenditure is not entered in the books of the company. It may be, that the appellants will succeed eventually in establishing their claim, but there can be no manner of doubt that on their own admissions, and in view of the fact that the appellants live mostly in Calcutta and elsewhere, outside the jurisdiction of the Court, it was absolutely necessary to take steps for the interim preservation and protection of the amount involved. The learned Officiating District Judge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the factory until the money advanced by him with interest was paid off, and was also to receive a commission of the proceeds of the sugar sold. The status of the claimant in that case as a secured creditor had been admitted by the company before it went into liquidation, and possession had been actually delivered to him before he had advanced the money for working the factory. On these facts it was held I venture to think rightly that section 185 was inapplicable. But, as stated above, the circumstances of the present case, as admitted by the appellants themselves are very dissimilar, and it cannot be said here that the summary powers of the Court were unjustly exercised by Mr. Niamat Khan. It may also be pointed out that apart from secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stered in November, 1930. I do not, however, think it necessary to enquire into the matter at this stage. It will suffice to say that that security-bond, even if it was properly executed, will lapse today with the decision of this appeal, and it will take several months before another bond of this kind can be properly executed. The appellants, have had the disputed money in their possession for nearly five years now, and they must put it in the custody of Court pending decision of the dispute. For the foregoing reasons, I accept the appeal to this extent, that in lieu of the order of the District Judge, dated the 26th of May, 1930, directing the appellants to pay the sum of Rs. 47,675-14-9 in the Imperial Bank of India, Delhi, to the acco ..... X X X X Extracts X X X X X X X X Extracts X X X X
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