RAYMON ENGINEERING WORKS Vs. UNION OF INDIA

JUDGEMENT

(1.) A very interesting question with reference to the scope of section 269 and section 637A of the Indian Companies Act (as amended by Act 65 of 1960) arises for consideration, as a case of first impression, in this civil writ petition.

(2.) A few salient facts alone may be sufficient to notice for deciding this question. The petitioner, called the Raymon Engineering Works Limited, is a public limited company which was incoprporated on 30th November, 1954 with an authorised capital of rupees three crores. It was, therefore, an existing company within the meaning of section 3(2) of the Act.

(3.) Raymon & Company (India) Private Limited, incorporated in 1951, consisting only of two shareholders (Mrs. and Mr. M.C. Ray) were appointed on 7th February, 1956 as Managing Agents of the petitioner-company for a period of ten years. The Managing Agents negotiated, on 5th September 1955, for the purchase of a Bone Mill from Messrs David Curlenders for Rs. 3,25,000.00 out of which Rs. 15,000.00 had been paid as earnest money. There was a conveyance dated the 25th June, 1957, whereby the balance of Rs. 3,10,000.00 was paid. The negotiations for the purchase of this Mill are stated to have commenced in the year 1953-54 but completed on the 25th June, 1957. Shri M. C. Ray, the director and shareholder of the Raymon & Company (India) Limited was also one of the promoters of the company.