FORTUNE COMMERCIAL BANK LTD Vs. VIDYAGAURI J MEHTA

JUDGEMENT

(1.) THIS appeal arises out of Insolvency Application No. 45 of 1949 of the District Court of East Khandesh in which the District Judge of East Khandesh has ordered under section 162 of the Indian Companies Act (VII of 1913) the winding up of the Fortune Commercial Bank Ltd. , Jalgaon, holding it proved on the evidence before him that the deceased managing director of the appellant company, on Mr. K. G. Chaudhari, had grossly mismanaged the affairs of the company to secure benefit to himself and his friends, that loans with out security to the extent of Rs. 90,000 had been advanced to the directors of the company, that suspicious entries to cover up the fraud had been made in the accounts of the company by the deceased managing director, that since March 1, 1949, the company was doing no business, that the substratum of the company had gone, that therefore the object of this banking company could not be carried out and that therefore it was just and equitable to wind up the company.

(2.) THE original opponent company feeling aggrieved by the abovestated order has come in appeal.

(3.) AT the very outset the appellant's leaned advocate has raised a point of law relating to the jurisdiction of the District Court which has ordered the winding up. It is contended by him that the District Court had no jurisdiction to proceed with the application for winding up after the passing of the Banking Companies (Amendment) Act, 1950 (Act XX of 1950), and that the only Court which could deal with such an application after the passing of the above said Act was the High Court. For the purpose of this contention reliance is placed upon Sections 10 and 11 of the Banking Companies (Amendment) Act, 1950 (XX of 1950 ). This is how Section 10 of the amending Act runs :-