JAYANTHI BAI Vs. POPULAR BANK LTD

JUDGEMENT

(1.) These are four appeals against the order of the learned single Judge allowing C. M. P. 144 of 1958, a petition by the liquidator of the Popular Bank Ltd., under S.531 of the Companies Act, 1956. That petition was made in B. C. P. 8 of 1956 (E), upon which the Popular Bank Ltd., which may be referred to hereafter as the bank, was ordered to be wound up and in pursuance of which, the liquidation proceedings are now in progress. C. M. P. 144 of 1958 was filed for a declaration, that certain entries as to payments or adjustments in the books of the bank were made by way of fraudulent preferences in favour of some of the creditors of the bank and for ancillary reliefs. The appellants are some of the respondents in C. M. P. 144 of 1958, who as creditors, were found by the learned Judge to have been preferred by the bank. Others like the appellants, who were also found by the same judgment to have been similarly preferred, have submitted to the judgment and have not appealed. The references in this judgment to respondents are as in C. M. P. 144 of 1958.

(2.) A. S. 544 of 1961 is by respondents 9 and 10, A. S. 594 of 1961 is by the 2nd respondent, A. S. 595 of 1961 is by the 21st respondent and A. S. 620 of 1961 is by respondents 1 and 13. The bank suspended its business on August 16, 1956. Its winding up was ordered on December 19, 1956, on a petition presented on August 27, 1956. The impugned entries all purport to have been made shortly before the bank suspended its business and at a time when it had not enough money to make payments. They are of a general pattern, which may best be described in the words of the learned Judge. He says in Para.2:

(3.) S.531(1) aforesaid, without its proviso which is not material, reads as follows: -