Respondents 1 to 4 preferred an appeal to the High Court of Bombay which by an interlocutory judgment dated January 25, 1963 set aside the order made by the District Judge refusing respondents 1 to 4 permission to lead evidence and permission to cross examine respondent 5.
Wherever additional evidence is allowed to be produced by an Appellate Court, the Court shall record the reason for its admission.
It appears that in or about April 1949 the Industrial Agricultural Engineering Company C.P. Ltd. hereinafter referred to as the Company was formed under the Act with its registered office situated at Nagpur.
Again on July 10, 1957 the Official Liquidator requested the Court to examine respondent 5 and the learned Judge passed an order on the same day directing examination of respondent 5 at 3 P.M. on that day.
But since the District Judge was number in a position to know why and for what purpose respondent 5 was to be examined he directed the Official Liquidator or Mr. Mani to make an application for that purpose.
2,686/3/ and Rs.
21,700 75p as per the report of the Official Liquidator.
5 lakhs at 4 per cent, to Bombay .
The District Judge further directed the Official Liquidator to furnish a statement in respect of the amounts due on certain charges which was accordingly furnished by him on October 23, 1958.
On June 29, 1957 the Official Liquidator stated that he did number want to examine respondent 5.
There was also a partnership firm companysisting of respondent 1 and some others.
Respondent 4 T.K. Shamu is the companysin of respondent 1 Raghawa Desikachar.
After the record of the evidence was transmitted to the High Court the Bench by its judgment dated March 22, 1963 passed a decree against respondent Section 1, 2 and 3 to pay to the Official Liquidator of the Company a sum of Rs.
The remaining claim of the Official Liquidator was set aside and the decree of the District Court was reversed to that extent.
The District Judge by his order dated December 7, 1967 allowed the application and accordingly the application dated July 11, 195ft was amended.
Respondents 1 to 4 by their reply dated December 27, 1957, showed cause against the said application of the Official Liquidator and requested that they may be allowed to lead evidence in companynection with the charges mentioned in the application of the Official Liquidator.
36,649 32 p. and Rs.
No evidence was led by the Official Liquidator or respondent 5.
From the date of the Companys incorporation till August 27, 1952 one Shantilal Nemchand Shah respondent 5 was the Managing Director, while respondents 1 to 4 were the Directors of the Company.
Even before this meeting took place, respondent 5 as shareholder of the Company filed an application on July 26, 1954 in the District Court at Nagpur against the Company, respondents 1 to 4 and other parties praying for an order for companypulsory winding up of the Company.
These two new Directors were the employees and Directors of a companycern known as Industrial Agricultural Engineering Company Bombay Ltd. hereinafter called the Bombay Company.
They also requested that they be allowed to cross examine respondent 5 Managing Director of the said Company.
11.973/12/ in respect of certain stock in trade.
The District Judge, however, by his order dated September 4, 1958, rejected the application of respondents 1 to 4 and on October 9, 1958, he passed a decree against respondents 1 to 4 for items 1 , 2 , 5 6 , namely, for Rs.
36,000/ Rs.
The Official Liquidator also asked for the examination of respondent 5 who however was directed by the District Judge to be present in the Court.
This order formed part of the decree dated October 9, 1958.
The District Judge passed an order on July 13, 1955 directing companypulsory winding up of the Company and appointed one K.S. Misra as the Official Liquidator of the said Company.
2,686/8/3 being part of the debt remitted by the said Company with interest on the aforesaid amounts at 6 per cent from July 25, 1954 until payment.
The District Judge passed the order prayed for under Section 196 of the Act on July 7, 1956.
Pursuant to the said order respondents 1 to 4 were publicly examined by the Official Liquidator, and cross examined by other parties.
Accordingly the Bench ordered the case to be remanded to the City Civil Court at Bombay to record additional evidence in the said matter under Order 41 Rule 27 Code of Civil Procedure and remit to it that evidence.
On an application dated February 11, 1963, the Bench of the High Court by its order dated February 12, 1963, refused to allow respondents 1 to 4 to produce certain documents which were number produced by them at an earlier stage.
20,000/ Rs.
The Official Liquidator Misra made a report to the District Court on April 28, 1956 asking the Court to pass an order for the public examination of respondents 1 to 4 the Directors of the Company.
On October 25, 1958, the District Judge ordered respondents 1 to 4 to pay further amounts of Rs.
They also filed certain documents.
Pursuant to the aforesaid decided dated January 25, 1963 and February 12, 1963 respondents 1 to 4 led the evidence of 11 witnesses including themselves and cross examined respondent 5.
After August 27, 1952, respondent 5 having resigned the office of Managing Director was only a shareholder and it transpired that as the Company was number making profits, the Directors called a meeting of the shareholders of the Company on July 29, 1954, in order to obtain a Special Resolution for voluntary liquidation of the Company.
The office of this partnership was located in the office of the Bombay Company.
O July 11, 1957, the Official Liquidator made an application that as the four Directors respondents 1 to 4 had illegally withheld or retained certain amounts specified therein they became liable to refund or repay the amounts with companyts and with such interest as the Court deems fit.
Jaganmohan Reddy, J. This appeal is by certificate against the judgment of the High Court of Bombay Varying the judgment and decree passed against respondents 1 to 4 by the District Judge of Nagpur on an application under Section 235 of the Indian Companies Act 7 of 1913 hereinafter called the Act.
furniture, motor cycle and motor car sold by the said Company and a further sum of Rs.
1,30,000/ with interest at 4 percent, p.a.
On August 27, 1952, respondent 5 resigned as Managing Director and in his place two Directors C.V. Krishnamurthi respondent 2 and M. Ganpatram respondent 3 were appointed DirectOrs.
