J SEN GUPTA PRIVATE LTD Vs. STATE

JUDGEMENT

(1.) This is an application for an order that the sale of a truck by the Company, now in liquidation, to the applicant be declared valid and binding on the Official Liquidator. Briefly, the facts are that on the 10th September, 1958 there was a resolution of the Board of Directors of the Company authorising the sale of some of its assets. Then on September 15, 1958, a creditor's petition for winding up of the Company was presented. The applicant on the 3rd October, 1958 purchased from the Company, Motor Truck No. WBL 1614 for the sum of Rs. 11,000/- and obtained possession thereof. On the same date the Company wrote a letter to the Director of Public Vehicles Department, Calcutta, informing him of the sale. On the 21st October, 1958 the applicant applied to this department for registration of his name as the owner of the truck. On the 2nd, 4th and 13th December, 1958 advertisements came out in the newspapers of the winding up petition. The order for winding up was made by this Court on the 5th January, 1959. Then on May 15, 1959 on the advice of the Public Vehicles Department the applicant wrote to the Official Liquidator for verification of his papers. On the 20th May, 1959 the Official Liquidator replied that an order from this Court validating the sale under Section 536(2) of the Companies Act 1956 was necessary.

(2.) The application has been tried on evidence before me. I have heard, the evidence of Gabriel Albert Gasper, the applicant and also of Radhagobinda Sana, the head cashier of the Company at the relevant time who was summoned by the applicant. Gasper is a transport, forwarding and clearing agent. He says that in the middle of September, 1958 a broker came to him with the information that the company was selling a truck. He went and inspected the vehicle. In two instalments he paid to the Company a sum of Rs. 11,000/- in cash and obtained a final receipt. Along with the truck a fork lift was also sold in which Gasper was not interested. The price of the lift was about Rs. 4,800/-. Gasper has produced the receipt that was granted to him dated the 3rd October, 1958 by one of the Directors of the Company. The receipt has been marked as Ex. 'A'. Gasper had no knowledge of the winding up proceedings. He has obtained possession of the vehicle and has overhauled it. At the time of the purchase the truck, according to Gasper, was worth only Rs. 5,000/- or Rs. 6,000/-. But he paid Rs. 11,000/- as it had the requisite ''permit." Gasper has also produced various letters made over to him by the Company in support of the transaction. In cross-examination Gasper has stated that in his own books of account there are entries relating to payments to the Company but he has not disclosed those books.

(3.) The evidence of Radhagobinda Saha is that pursuant to a resolution of the Board of Directors a truck was sold to Gasper. The resolution was passed ten or fifteen days before the sale took place. The receipt dated the 3rd October 1958 (Ex. 'A') has been granted by Byomkesh Chowdhury who was the Managing Director of the Company. The sum of Rupees 11,000/- was received from Gasper by the Company in cash. The entries in the Company's Account Book of Rs. 10,000/- and Rs. 5,800/-at pages 224 and 228 are in the handwriting of Saha's assistant. They represent sale proceeds of the truck No. 1614 and the fork lift. A part of the sum of Rs. 10,000/- paid by Gasper on the 20th September, 1958 was utilised by the Company for payment of Customs Duty amounting to Rs. 7,537.50. This payment was necessary for purposes of the Company's business. The opening cash balance on the 20th September, 1958 was RS. 1984.80. To this sum was added the sum of Rs. 10,000/- which came from Gasper and a few other small sums. The sum of Rs. 7537.50 has also been entered in the Company's ledger under the heading Job Control L. C.; the Job No. is L. C. 137/58; the ledger entry has been marked as Ex. '1A.' There are also subsequent entries in the ledger. In September/October, 1958 the Company was short of funds: it could not realise its dues.