C HARIPRASAD Vs. AMALGAMATED COMMERCIAL TRADERS PRIVATE LTD

JUDGEMENT

(1.) THESE appeals arise from the judgment of Veeraswami J. dismissing an application filed by C. Hariprasad, the appellant in 0. S. A. No. 18 of 1962, for directing the winding up of the Amalgamated Commercial Traders (Pte.) Ltd. , which will hereafter be referred to as the "company". The petition was based on the inability of the company to pay its debt due to him. The appellants in the other two appeals claim also to be creditors of the company and they supported the petition for winding up of the company. All of them are share-holders in the company.

(2.) THE company was incorporated on 29-1-1948, with a capital of Rs. 3,00,000, consisting of ten thousand taxfree cumulative preference shares of Rs. 10 each and two thousand equity shares of Rs. 100 each. Its object, among other things, was to take over the selling agency of Indian Sugars and Refineries Ltd. , Hospet and exploit an agreement obtained from it by Mr. A. C. K. Krishnaswami, one of the appellants in 0. S. A. No. 70 of 1962. The agency agreement turned out to be very profitable. The company maintained its accounts on the mercantile basis, the yeas adopted being the calendar year. Its main source of income was the commission earned from Indian Sugars and Refineries Ltd. Since the year 1950, the company has been able to declare very substantial dividends to its shareholders.

(3.) FOR the year ending 30-12-1959 the directors of the company reported to its shareholders that the commission earned during the year had not yet been received from the principals and concluded by saying: