6,21,177.53 and thereafter incurred further losses.
The in , debtedness of the companypany to the creditors including the appellants claim as shown by the companypany at the figure of Rs.
85,250.00 Interest on Rs.
There is numberallegation by the appellants to support acknowledgement of any claim to oust the plea of limitation.
It may be stated here that this claim of Rs.
4,50,000 the companypany would number be in a position to discharge the indebtedness of the companypany.
72,556.01.
500 each.
1,14,344.
The companymission was number received till the month of May, 1960.
As to the other two invoices for Rs.
72,556.01.
The further order was that if within six weeks the appellants did number file the suit in respect of the recovery of the amount the companypany would be able to withdraw the amount and if the suit would be filed the amount would stand credited to the suit.
With regard to the claim of invoices the High Court held that the first invoice for Rs.
9,56,829.47.
At the Annual General Meeting of the companypany on 8 January, 1970 the Resolution for sale of the machinery was unanimously passed by the companypany.
14,850.00.
85,250 Rs.
Appeal from the judgment and order dated April 3, 1970 of the Bombay High Court in Company Appeal No.
4,50,000 was at a undervalue.
The resolution was in the month of December , 1959.
7,857.00 Further interest on companypensation from 13 April, 1967 to 31 December, 1969.
First, that the books of account of the companypany did number show the alleged claims of the appellants save and except the sum of Rs.
The Bombay Traders companysisted of two groups known as the Nandkishore and the Valia groups.
51,453.12 B. a Compensation payable by the companypany to the appellants at the rate of Rs.
The value of the current and liquid assets is about Rs.
The companypany however denied that the companypany adopted the agreement.
34,600 was paid by the companypany to the appellants.
Rs.69,600.00 Interest on the amount of company pensation from time to time by the said companypany to the appellants till 12 April, 1967.
97 due to the app ellants at the rate of Ipercent per mensem from 1 April 1966 till 13 December,1969.
The respondent companypany has the numberinal.
3,100 per month for 22 months and 14 days in respect of occupation of the portion of the shed given by the appellants to the companypany on the basis of leave and licence.
The market value was Rs.
The appellants filed a petition for winding up in the month of January, 1970.
The appellants had imported some machinery and were in the process of importing some more.
The companypany was to pay Rs.
The first claim for erection of plant and machinery was to tally denied by the companypany.
72,556.01 is for the sum of Rs.
Second, many of the alleged claims are barred by limitation.
1 1961 1 A.E.R. 302.
8,81,171.96.
2,97,500 on account of rent and K. Patel Co. of Bombay with a claim for Rs.44,477.56.
21,576.00 C. a Invoices in respect of 3 machines.
The appellants alleged that the companypany was liable to be wound up under the provisions of section 43 3 c of the Companies Act, 1956 as the companypany is unable to pay the following debts.
The Katakia brothers were present at the meeting.
His two brothers were also Directors of the companypany since its inception till 22 August, 1969.
With regard to the claim for rent, the companypany pursuant to an agreement between the companypany and Ravi Industries Private Ltd. credited Rowe Industries with the sum of Rs.
The appellants allege that the companypany adopted the agreement between the Bombay Traders and the appellants.
The receipt for such payment was produced before the learned trial Judge.
It is in this background that the appellants impeached the proposed sale of the machinery as unauthorised and improvident.
1,14,344.97 Interest on the sum of Rs.
The companypany produced books of account showing a sum of Rs.
1,14,344.97 from 1 April, 1966 till 31 December, 1969 at 1 per mensem.
The agreement provided that the erection expenses of the machinery would be treated as a loan to the new companypany.
5,51,000 divided into 1,103 Equity shares of Rs.
14,650 and Rs.
The amount which the Bombay Traders would advance as loan to the companypany was agreed to be companyverted into Equity capital of the companypany.
The defences were first that the books of the companypany showed numbersuch transactions secondly, there was numberprivity between the companypany and the persons in whose names the appellants made the claims thirdly, the alleged claims were barred by limitation and, fourthly, there was never any demand for the alleged claims either by those persons or by ,the appellants.
36,000 the amounts appeared in the companypanys books.
1 of 1970.
51,453.13 Commission on the sum of Rs.
When the companypany appeared all the shareholders and a large number of creditors of the companypany of the, aggregate value of Rs.
The companypany alleged that the appellants had agreed to reduction of the debt to a sum of Rs.
CIVIL APPELLATE JURISDICTION Civil Appeal No.
14,850 and to accept payment of the same out of proceeds of sale of the machinery.
14,98,923.3 3.
The High Court on appeal upheld the judgment and order and found that the alleged claims of the appellants were very strongly and substantially denied and disputed.
The learned Single Judge held that the claims of the appel lants were disputed save that a sum of Rs.
The companypany was incorporated in the month of July, 1965.
The companypany disputed the claims of the appellants under all the heads save the two amounts of Rs.
Another part of the agreement was that the machinery was to be erected in portions of a shed in the companypound of Ravi Industries Private Limited.
37,596.00 The appellants alleged that the companypany failed and neglected to show the aforesaid indebtedness in the books of account save and except the sum of Rs.
The other allegations of the appellants were these.
The appellants themselves wanted to buy the machinery at a higher figure.
The second claim for companypensation was denied on the grounds ,that the appellants were number entitled to any companypensation for use of The portion of the shed and the alleged claim was barred by imitation.
The learned Single Judge refused to wind up the companypany and asked the companypany to deposit the disputed amount of Rs.
Since the inception of the companypany Jayantilal Katakia a partner of the appellants was the Chairman of the companypany until 22 August, 1969.
The Bombay group had also Directors of the companypany.
Thirdly, the Katakia brothers who were the Directors resigned in the month of August, 1969 and their three shares were transferred in the month of December, 1969 and up to the month of December, 1969 there was number a single letter of demand to the companypany in respect of any claim.
72,556.01 in companyrt.
The liability excluding the share capital of the companypany is Rs.
The three shares were sold by the Katakia Brothers shortly after each of them had written a letter on 27 July, 1969 expressly stating that they had numberobjection to the sale of the machinery and the letter was issued in order to enable the companypany to hold an Extra ordinary General meeting on the subject.
72,556.01 the companypany alleged that there was a settlement at Rs.
denied that there was any such companypromise.
It was alleged that the substratum of the companypany disappear ed and there was numberpossibility of the companypany doing any business at profit.
3,100 as the monthly rent of the portion of the shed occupied by them.
6,00,000 to the appellants for acquisition of machinery and installation charges thereof.
M. Tarkunde, R. L. Mehta and 1.
14,650 and for Rs.
The appellants claimed that they were the creditors of the companypany for the following sums of money A. a Expenses incurred by the appellants in companynection with the erection of the plant and machinery.
The Katakia brothers thereafter sold their three shares to the Valia group.
9,56,829.47 and the assets of the companypany on the valuation put by the companypany on the balance sheet amount to Rs.
7,50,000 supported the companypany and opposed winding up.
The appellants are a partnership firm.
The companypany is indebted to a Director and the firms of M s Nandkishore Co. and M s Bhupendra Co. in which some of the Directors of the companypany are interested.
The proposed sale, of machinery for the sum of Rs.
The partners are the Katakias.
The Judgment of the Court was delivered by Ray, J. This is an appeal by certificate, from the judgment dated 3 April, 1970 of the High Court of Bombay companyfirming the order of the learned Single Judge refusing to wind up the respondent companypany.
The Bombay Traders was floating a new companypany for the purpose of running a Shoddy Wool Plant.
Similar option was given to the appellants to companyvert the amount spent by them for erection expenses into equity capital.
The appellants also admitted the same.
The companypany incurred losses upto 31 March, 1969 for the sum of Rs.
2,74,247.38.
When the petition was presented to the High Court of Bombay the learned Single Judge made a preliminary order accepting the petition and directing numberice to the companypany.
36,000 being the amounts of the second and third invoices.
72,556.01 due to the appellants, as on 31 March, 1969.
14,850 whereas the appellants.
The companypany relied on the resolution of the Board meeting on 24 October, 1969 where it was recorded that the Valia group would sell their 367 shares and 3 other shares which they had purchased from the appellants to the Nandkishore group and the appellants would accept Rs.
The appellants themselves were parties to the proposed sale.
The companypany was insolvent and it was just and equitable to wind up the companypany.
The High Court companyrectly gave four principal reasons to re ject the claims of the appellants to wind up the companypany as creditors.
1113 of 1970.
72,556,.01 was payable by the companypany to the appellants and with regard to the sum of Rs.
N. Shroff, for the appellant.
37,596.00 Commission at the rate of 1 per cent or Rs.85,250 Rs.
capital of Rs.
The alleged claims for interest and companymission were therefore equally baseless according to the defence of the Company.
10,00,000 divided into 2000 shares of Rs.
The appellants on these allegations alleged that even after the proposed sale of the machinery at Rs.
The issued subscribed and fully paid up capital of the companypany is Rs.
The three Katakia brothers had three shares in the companypany.
According to the companypany the claim of the appellants was for Rs.
The companypany proved the unanimous resolution of the Board at a meeting held on June, 1969 for sale of machinery of the companypany.
72,556.01 and the case of the companypany was that there was a settlement of the claim at Rs.
K. Sen and E. C. Agrawala, for creditor No.
The appellants carry on partnership business in the name of Madhu Wool Spinning Mills.
1, 3 to 6 and 10.
The companypany stopped functioning since about the month of Septem ber, 1969.
The Bombay Traders agreed to pay about Rs.
Prior to the incorporation of the companypany there was an agreement between the Bombay Traders and the appellants in the month of May, 1965.
The liability of the companypany including the share capital amounted to Rs.
The other 1,100 shares were owned by N.C. Shah and other members described as the group of Bombay Traders.
The Board did number sanction such a sale.
They are three brothers.
6,00,000.
C. Chagla and S. N. Prasad, for Creditors Nos.
500 each.
