(1.) THIS is an appeal against the judgment of Clark, J., dismissing an application by three share -holders of a private limited company known by the name of Sri Gopalakrishna Motor Transport Co., Ltd., for the winding up of that Company. The appellant was the first petitioner on the original side and he claimed to be the managing director of the motor transport company from 1st July, 1946. The other two petitioners, who are respectively respondents 12 and 13 in this appeal, were a shareholder and a director of the same company. This joint stock company carried on business as a bus operator in and around Bezwada. The application before the learned Judge was under Clause (vi) of Section 162 of the Indian Companies Act on the ground that it is just and equitable that the company should be wound up by Court. Various reasons are alleged in the statutory affidavit filed in support of the application, which in essence, come to this, that the directors, far from working in harmonious co -operation, are at loggerheads with the result that the business is at a standstill on account of the deadlock. The gravamen of the charge is mainly against the first respondent as as well as the second respondent. In answer to the application, the respondents filed separate affidavits denying the charges levelled against them and further stated that the company is carrying on business properly and that substantial profits have been earned in addition to acquiring valuable good -will. It is further alleged that the appellant, during the time he was managing director, had misappropriated large sums of money belonging to the company and committed acts of misfeasance as a result of which the shareholders had to convene a special meeting wherein the second respondent was elected as the managing director. The affidavits on either side disclose charges and countercharges and it is incumbent therefore on the Court to find out how far there is justification for any of them.
(2.) BEFORE we concern ourselves with the merits of the application on which the learned trial Judge has bestowed considerable attention, it is necessary to advert to a matter of procedure in which, according to the learned Counsel for the appellant, the trial Judge has erred and therefore the learned Counsel urges, if we take a view different from that of the trial Court on that matter of procedure, it would be necessary to remand the application for further hearing and disposal afresh.
(3.) THE question therefore arises as to whether the procedure adopted by the learned Judge in holding that it was against the settled practice of the Court to allow oral evidence to be let in, in winding up applications is right; and secondly, even if such a practice was not commonly or universally accepted, whether in the circumstances of the case, the application for adjournment ought to have been allowed or not. The learned Judge states that he refused the adjournment application for cross -examining the respondents because they were not present in Court but were in Bezwada and other places and since no earlier intimation of the applicants' determination to cross -examine the respondents had been given it was not desirable or proper to adjourn the case at all. After a consideration of the various provisions of the rules made under the Indian Companies Act, Clark, J., decided that there was no provision in the Indian Companies Act or the rules made thereunder, for the taking of oral evidence in winding up applications. He therefore sought guidance from the procedure followed in the High Court of Justice in England and referred to Palmer's Company Precedents from which it was seen that in England oral testimony is permitted in support of a petition only by permitting the cross -examination of deponents where there is a conflict of evidence or when the evidence of some persons who decline to make an affidavit is required. As already stated, the application for cross -examination was not made at the earliest opportunity and so the learned Judge was not inclined to exercise his discretion in favour of the applicants.