COLLECTOR OF SABARKANTHA Vs. SHANKARLAL KALIDAS PATEL

JUDGEMENT

(1.) This is an appeal under S.202 of the Indian Companies Act VII of 1913, from the order of the District Judge, Ahmedabad.

(2.) The relevant fact are as follos: In the former State of Idar a private limited company called the Himatnagar Glass and Ceramic Industries Ltd. was founded. Originally, it as a private limited company but eventually it was converted into a public limited company. Just before this conversion the State of Idar purchased preference shares of the fact vale of Rs. 1,00,000 in this company and paid the full amount of the share money. Along with these shares the State also purchased ordinary shares of the value of Rs. 1,00,000. Only half of the share money had been called and, therefore, the State paid only Rs. 50,000. Thus, a balance of Rs. 50,000 as the unpaid call in respect of these shares. The State also lent Rs. 10,000 to the company partly on 5th March 1945 and partly on 6th April 1945.

(3.) It would appear that this concern ran into difficulties and the Government of Idar was, therefore, desirous of getting rid of its shares. An agreement as thereupon entered into between a concern known as the M. D. Industries Ltd. of Ahmedabad and the Himatnagar Glass and Ceramic Industries Ltd. Under that agreement that former was to be appointed as the sole selling agents of the Himatnagar Glass and Ceramic Industries Ltd. In consieration of their agreeing to render financial help to the aforesaid industries it was also agreed that the M. D. Industries Ltd. were to take over all the shares which stood in the name of Idar State in the Books of the company. They were to pay an amount of Rs. 1,50,000 to the Idar State as purchase price of those shares within a certain period. They never paid this money.