P ATENDOLKAR Vs. OFFICIAL LIQUIDATOR

JUDGEMENT

(1.) This is an appeal, by three of the Directors of the Supreme Bank of India, Limited, Belgaum (in liquidation), hereinafter referred to as 'the Company', from an Order of Mr. Justice Narayana Pal made in the exercise of the Original Jurisdiction of the Court, directing three of the Directors and the Auditor of the Company to appear and give evidence on oath before the Court in the misfeasance proceedings Initiated by the Official Liquidator against the Directors and other officers of the Company. The question for determination in this appeal is as to whether that order is not legal and valid. For a correct appreciation of the contentions urged on both sides, it is necessary to state briefly the circumstances under which the Order was made.

(2.) The Company was ordered to be wound up by the High Court of Bombay on 16-4-1956. Consequent on the Re-Organisation of States, the winding up proceedings of the Company pending in the High Court of Bombay on 1-11-1956 were transferred to this Court. It was number ed as C.P. (B) 28/1956 and the Official Liquidator of this Court assumed charge of the winding up proceedings. On the basis of Information gathered from certain reports concerning the affairs of that Company, the Official Liquidator made an application under Section 235 of the Indian Companies Act, 1913 (Central Act VII of 1913), hereinafter referred to as "the Act", read with Section 45-H cf the Banking Companies Act, 1949, to examine into the conduct of 14 respondents named therein and direct them all or such of them as the Court may determine to be liable in particular or generally or jointly, to repay, and restore the money of the Company which the Court may fix. The application, styled as "Report No. 20", alleged that the respondents have been guilty of misfeasance, breach of trust and fraudulent conduct in relation to the Company and they have misapplied or become liable for a sum of Rs. 4,26,000/-. Respondents 1 to 7 to the said application were the Directors of the Company at the time of its closing, and respondents 8 to 13 were its officials and respondent 14 was the Company's Auditor. The respondents filed their statements denying the acts of misfeasance charged against them. After the pleadings were filed the case was posted for trial on 10-12-1962 before the learned Company Judge. Four witnesses were examined for the Official Liquidator and four witnesses were examined on the side of the Respondents. After the completion of the examination of R.W. 4 Kekare on 11-3-1963, the learned Company Judge suggested ,to the learned counsel appearing before him that he had tentatively decided to require the presence of the Directors and the Auditor for giving evidence) on oath in open Court on matters under investigation before him in the misfeasance application and Invited them to place whatever circumstances they would like to urge before making up his mind finally so as to call them. Having heard the counsel, the learned Judge made the following order;

(3.) The Official Liquidator raised a preliminary objection to the maintainability of the appeal. He contended that no appeal lies since the eider in question is an interlocutory order which does not finally decide any dispute and therefore is not a judgment. The appeal purports to be one brought under Section 202 of the Act read with Section 483 of the Companies Act, 1956, Section 45-N of the Banking Companies Act, 1949 and Section 4 of the Mysore High Court Act, 1961. Section 483 of the companies Act, 1956, corresponds to Section 202 of the Article It is not disputed that the matter is governed by the Indian Companies Act, 1913 since the winding up was commenced before the commencement of the Companies Act of 1956. Section 45-N of the Banking Companies ACT, 1949 has no application since that section relates to any order or decision of the High Court in a civil proceeding under the Banking Companies Act.