GITANJALI PRESS PRIVATE LTD Vs. S THANGASWAMI

JUDGEMENT

(1.) This appeal arises from the judgment of Venkatadri J. in O. P. No. 77 of I960 appointing an administrator to conduct the affairs of a private limited company, Gitanjali Press (Private) Ltd., at Pudukottai, along with its managing director for the duration of certain appeals pending in this court. Gitanjali Press (Private) Ltd., the appellant, was incorporated on 27th October 1946 under the Indian Companies Act, 1913, as applied to the former Pudukottai State. The nominal capital of the company is Rs. 30,000, divided into 300 shares of Rs. 100 each, 203 out of the, 300 shares have been issued and are fully paid up. Swamikannu Pillai an Indian Christian was the promoter of this concern and he owned 50 shares. Thangaswami and Ratnam, the son and brother respectively of Swamikannu Pillai owned 20 shares each. 113 shares stood in the names of the employees of the Press owned and conducted by the company. It is, however, claimed on behalf of the respondents, the heirs of Swamikannu Pillai who died on 18th November 1956, that these shares were held by the employees only benami for Swamikannu Pillai and that after his death they stood transferred in their favour. The company, as stated already, was running a press at Pudukottah. Swamikannu Pillai was its managing director till the date of his death. His brother, Ratnam who was the secretary of the company till then. succeeded to the office as managing director, though it is not clear as to how he succeeded to that office. After the death of Swamikannu Pillai misunderstandings arose between his heirs (respondents) on the one side and Ratnam, his brother, on the other. The latter claimed that although he and his brother, (Swamikannu Pillai) were Indian Christians, they had adopted Hindu law and customs and that there having been a coparcenary between the brothers he would be entitled to a half share in all the properties which stood in the name of Swamikannu Pillai including his interest in the company's shares. Ratnam then filed three suits, O. S. Nos. 6, 20 and 34 of 1958 in the Sub Court, Pudukottai for a declaration that the properties standing in the name of the deceased Swamikannu Pillai belonged to the joint family of which he was a member and for partition and separate possession of his share in the said joint family properties. These suits, were however dismissed. Appeals have been file by Ratnam in this court against decrees and judgments in those suits. A. S. No. 35 of 1960 is the appeal which comprises as its subject matter, the interest of the deceased, Swamikannu Pillai in the Gitanjali Press.

(2.) While the suits filed by Ratnam were pending in the trial court, the son and widow of Swamikannu Pillai, respondents to this appeal, filed a company application No. 77 of 1960 for the winding up of the company under S. 433 of the Indian Companies Act. Substantially two grounds were alleged in support of the petition; The first was that the company was unable to pay its debts in that it had not discharged a liability of Rs. 21,747-77 due to the estate of the deceased Swamikannu Pillai in spite of demands. The second was that it was just and equitable that the company should be wound up, the reason being that there was a deadlock in the management in that a minor shareholder was oppressing the majority of shareholders. The latter ground requires further clarification. The case for the respondents was that by virtue of the fact that they had become the sole heirs of Swamikannu Pillai, they were entitled exclusively to the fifty shares that stood in his name and also to the 113 shares held by the employees of the Press benami for the deceased and thus they had become entitled to 203 shares inclusive of those that originally stood in the name of the first respondent. It was stated that Ratnam on the other hand, was entitled only to 20 shares and that he arrogating to himself the position of a managing director, was conducting the affairs of the company according to his pleasure by declining to register the respondents as shareholders in respect of 183 shares to which they had become entitled after the death of Swamikannu Pillai. It was also alleged that no general body meeting of the company had been convened for the past three years and that the company was sustaining loss year after year.

(3.) This petition was opposed on behalf of the company by Ratnam. He asserted title to half the number of shares to which Swamikannu Pillai was entitled during his lifetime and also to the sum of Rs. 20,000 advanced by him to the company which found the subject matter of the first charge. According to him there was no default in the matter of registration of the shares as the respondents exclusive title to them had not yet been declared by the court. He submitted that it was not just and equitable to wind up the company.