SHAMJI KHETA Vs. A V PATWARDHAN

JUDGEMENT

(1.) THIS is an appeal under S. 202 of the Indian Companies Act, 1913. The relevant facts are briefly these There was a limited company called the Midland Laboratories which went into voluntary liquidation on 25-3-1951. Shri C. L. Verma of Nagpur was appointed a liquidator. During the course of liquidation, he realised between 15,000 to 16,000 rupees. Out of this amount he made disbursements to four creditors including himself to the tune of about Rs. 7,000/ -. Upon an application made by the respondent No. 1 and an other person Shri Verma was removed from his1 position as liquidator and in his place the respondent No. 2 Shri K. S. Mishra, Advocate. Nagpur, was appointed a liquidator by the District Judge, Nagpur. Shri Mishra issued notices to the four per sons including Shri Verma whose debts had been paid off by Shri Verma to refund the amount paid to them. Shri Verma was ordered by the Court to repay the amount which he had paid to himself. An appeal preferred by him before the High Court against the order requiring him to pay the amount was dismissed by Sinha C. J. A letters patent appeal was preferred from the decision of Sinha C. J. and it was dismissed by this Court on 4-7-1957.

(2.) THE appellants before me are two of the creditors whose debts were paid by Shri Verma. Upon an application of the respondent No. 2, the District Judge ordered the appellants to refund the amounts received by them. They now challenge! the correctness of the order of the District Judge.

(3.) IT is urged before me on behalf of the appellants that the District Judge erred in holding that the appellants were liable to refund the amounts received by them. The learned District Judge has acted under the provisions of S. 185 of the Indian Companies Act. That section reads thus: