BANK OF COMMERCE LTD Vs. PARAKKAT MANI MATHAI

JUDGEMENT

(1.) BY these proceedings under section 235 of the Indian Companies Act,1913,the liquidator seeks to recover six sums of money from the respondent who was a Director of the banking company that is being wound up.With regard to three of these sums,items 2,3 and 4,the res­pondent has succeeded in showing,with reference to the books of the bank,that although he took the moneys from one or the other of the branches of the bank,he duly paid them into another,and that he acted only as a - messenger for effecting the transfer of the funds.Therefore,these items are not pressed;and that leaves us with items 1,5 and 6.

(2.) ITEM 1 is a sum of Rs.902 -10 -8 admittedly due from the respondent on an overdraft.The overdraft had been duly sanctioned;and there was nothing in the law then prohibiting borrowings by a Director "section 20 of the Banking Companies Act came into force only later.The transaction is therefore just an ordinary borrowing transaction,and no blame attaches to the respondent so as to bring the case within section 235 of the Act.The claim in respect of this item has therefore to be rejected.

(3.) ITEMS 5 and 6 stand on much the same footing.The former relates to a credit of Rs.1,600 to the respon­dent's current account on 29th April 1950 by the entry Ext.K.This went in reduction of his overdraft.The respondent did not actually make any such payment into his current account.His case is that a sum of Rs.2,000 was due to him from the bank by way of out -of -pocket expenses for which he had rendered an account to the Managing Director.On this account he was sanctioned and was paid Rs.1,600.The payment was by adjustment,and that is the credit in question.Ext.K describes the credit as "By remittance " ;.The transaction however finds place in the day book of the bank only on 21st July 1950 under Ext.Q where the sum of Rs.1,600 is shown as paid to the respondent on account of salary and as received from him towards his overdraft.The respondent's case both in the counter -affidavit and in his evidence that he was not entitled to any salary but that the amount was paid to him in re -imbursement of expenses incurred by him on behalf of the Bank.Actually he has been able to produce no evidence beyond his bare word of mouth either in proof of these alleged expenses or in proof of their having been sanctioned by the Bank.The position then is that nothing was due to him from the Bank;and yet,in effect,he took Rs.1,600 from the bank and put it into his current account.