9911796707
TMI Blog1942 (3) TMI 11X X X X Extracts X X X X X X X X Extracts X X X X ..... he Indian Companies Act. He showed the assets of the company as Rs. 53,010-12-0 and liabilities as Rs. 36,465-2-2 in all of his returns. On 19th June 1935 he made certain entries in the accounts which rendered the subsequent periodical statements incorrect. He owed to the company a sum of Rs. 33,600 on a promissory note; and on 19th June 1935, he showed that amount on the credit side. On 20th March 1935 he showed on the debit side as share capital-K. Kempai Gounder-Rs. 2,000 and share capital-K. Ramaswami Gounder-Rs. 2,000, these persons being his uncle and brother respectively. Against the date 19th June 1935 he showed a debit entry of Rs. 6,000 for his own shares, Rs. 1,125 for his own current account, Rs. 3,000 as having been paid to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Additional Sessions Judge of Coimbatore dismissing the appeal and also by way of a regular appeal against the conviction and Sentence by the Sessions Judge of Coimbatore. It is not quite certain from the records in the Courts below what exactly the case at the accused was. He stated before the Committing Magistrate : "I did not do anything fraudulently. I did so for the benefit of the Bank." As the learned Sessions Judge says, this reads as if the accused admitted that he was responsible for these entries ; but that he pleaded that he had done so in the best interests of the Bank. In the Sessions Court he said : "There was a proposal for holding a general meeting for winding up the Bank, but as there was no quorum nothing could be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... false, then the periodical return was true; and so the accused could not be found guilty of both offences. It is also argued that there is no reason to believe that the entries in the accounts of 20th March 1935 and of 19th June 1935 were not true. It is pointed out that the prosecution has not let in any evidence to show that the creditors mentioned therein were not actually paid. It is further contended that although the accused as a liquidator had no authority either to write off share capital and credit it against debts or to write off the balance of his own debt against sums due to creditors and to share-holders, yet the entries corresponded with real transactions and so cannot be false entries. There is something to be said for this l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , or Manager or an Officer or Contributory and therefore could not be found guilty under that section. It was argued that although he was once a Director of the Company, he ceased to be one when once liquidation proceedings had begun. Section 208(A)(2) says that on the appointment of a liquidator all the powers of a Director cease except so far as the Company in general meeting, or the liquidator, sanctions the continuance thereof. The wording of this section thus indicates that although the Director loses most of his powers, he does not cease to be a Director. Moreover, the liquidator is an officer of the Company. That was held in In re Windsor Steam Coal Co. [1901] [1929] 1 Ch. 151. The accused was also a contributory. So whether as Direc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is subject. During the course of the winding up the liquidator applied to the Court for directions to examine the Directors; and it was held by the learned Judge that as the company had not passed any valid resolution that it could not, by reason of its liabilities, continue its business and that it was advisable to wind up the company was not in voluntary liquidation at all; there was there fore no liquidation, and the liquidator had no authority to do any of the acts ordinarily permitted to a liquidator. The application to the Court was then opposed by members of the company: but in the present case as far as we know, all the members of the company approved of the voluntary winding up, everything was regular with the possible exception of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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