V RAJAGOPAL Vs. SALEM PROVIDENT SOCIETY IN LIQUIDATION

JUDGEMENT

(1.) THIS is an appeal against the order of the Additional District Judge, Salem, in I. A. No. 165 of 1956 in O. P. No. 26 of 1948, by which he rejected the claim of the appellant for payment of a sum of Rs. 43,500/- from out of the funds of a company in liquidation.

(2.) THE appellant was employed as Secretary, ex-officio Director of the Salem provident Society Ltd. , ever since its foundation. It was doing insurance business. In March, 1948, the Superintendent of Insurance applied for the compulsory winding up of the company and obtained an order for winding up. During the pendency of the application, an Official Liquidator was appointed to take charge of the assets of the company in October, 1948. On the Official Liquidator taking charge of the business of the company, the petitioner, as the Secretary, had to vacate office. He therefore came forward with a claim that the termination of his service was wrongful, and that gave rise to a cause of action for damages, which he estimated at the remuneration he would have drawn from October, 1948, till december, 1955. He fixed the terminus as December, 1955, because in this month the Government nationalised all life insurance business and therefore it became impossible for any private individual or company to carry on the business of life insurance. The amount claimed by him as damages represents the remuneration he would have drawn for this period if the company had not been liquidated but had carried on the business of life insurance. This application was made in October, 1956, sometime after the affairs of the company had been wound up and final orders passed by the liquidation Court settling all claims.

(3.) THE learned Judge in the Court below refused the relief asked for by the petitioner on the ground that the winding up was caused by the mala fide conduct of the petitioner himself in relation to the affairs of the company in that he refused to set right the affairs of the company in spite of repeated reminders from the superintendent of Insurance. The learned Judge assumed that the termination of the service of the petitioner was wrongful termination which gave rise to a cause of action for damages. We are unable to agree with this assumption.