CHELLARADH AND COLTD Vs. M V KSUNDARAM AND

JUDGEMENT

(1.) This is an appeal against an order passed under Section 162, Companies Act, by the learned Second Addl. District Judge, Bangalore, for winding up the Appellant Company. The ground on which the order was made is that the Appellant failed to pay debts due to the Respondents. On a perusal of the petition filed by the Respondents and the objections thereto by the Appellant, it is seen that the claim is seriously disputed. Respondents claimed Rs. 8000 and and as being due but Appellant asserted that they are entitled to get only about Rs. 220 and odd which the appellant offered and was ready to pay. The dealings between the parties consist of items of debit and credit with respect to which, there is keen controversy. The result of the transactions cannot be determined unless a volume of correspondence and a number of account books are closely looked into and the proceeding treated as if it is a suit on accounts. Part of the difficulty for deciding as to whose version is to be accepted is due to the fact that the respon dents appear to have had dealings with the Industrial Expansion Company which functioned as the Managing Agents of the appellant company and the need to distinguish the dealings which the Managing Agents had on their own account from those which they had on behalf of the appellant company. The Respondents, though notified, were absent at the hearing and not represented by any counsel. The lower Court has recorded a volume of evidence find entered into an unduly lengthy discussion of the materials placed before it in support of the claim and contentions of the parties.

(2.) In a suit filed in the Court of the Subordinate Judge, Bangalore, the liability of the Appellant to Respondents for payment of amounts is said to have been involved. I do not think that the provisions of the Companies Act can be availed of for obtaining an adjudication of the right to obtain payment when it is contested and the finding involves such a detailed and lengthy investigation as is necessary for a decision in a suit. As stated in Palmer on "Company Precedents" para 2,"Chap. III page 52 :

(3.) In view of all this, the order of the lower Court has to be set aside. The appeal is allowed. Parties will bear their own costs.