JAMNALAL RAMLAL KIMTEE Vs. KONDA LAKSHMAN BAPUJI

JUDGEMENT

(1.) This appeal is against the order of our learned brother, Satyanarayana Raju, J. dismissing Application No. 206 of 1959, filed under Section 546(3) of the Indian Companies Act, 1956, by two of the shareholders of the Hyderabad Investment Syndicate Ltd. (in Voluntary liquidation), to direct the liquidator, the first respondent, to forfeit all the amounts paid by the auction-purchaser, the second respondent, and to resell all the assets and liabilities of the company by public auction.

(2.) It arises in the following circumstances. The-share capital of the Hyderabad Investment Syndicate Ltd. was covered by 50,000 shares of Rs. 50.00each. As the affairs of the company were not quite satisfactory at the 15th general Body meeting, the share holders passed a special resolution that the company should go into voluntary liquidation and appointed the first respondent, the liquidator. He was empowered to exercise the powers mentioned in Clauses (i) to (iv) of Sub-section (2), of Section 457 and Section 546(1) of the Indian Companies Act. By another resolution, an Advisory Committee consisting, of five members to be elected by the share-holders was constituted.

(3.) On 25/07/1958, the liquidator issued a public notice fixing 25/08/1958 for the sale of "all the assets and liabilities of the company as a going concern" in public auction. Simultaneously, he issued a notice to all the share-holders of the company requesting them to be present at the sale. On the notified date, public auction was conducted in the presence of an extraordinary general Body Meeting of the share-holders of the company. As required by the liquidator, the share-holders passed a resolution enabling the liquidator to accept the highest bid at the public auction. In the auction held on the 25th, there Was a keen competition between the first appellant, represented by Sri. S. E. Kimtee, and the second respondent. The bid of Rs. 7,55,000.00 offered by the second respondent being the highest, the liquidator placed it before the share-holders for their acceptance by way of abundant caution.