SHANKARLAL AGARWALLA Vs. SATYA NARAIN JUGAL KISHORE

JUDGEMENT

(1.) The facts in this case are shortly as follows : Messrs Laxmi Spinning & Weaving Mills Limited. (hereinafter referred to as the said company) is a company incorporated under the Indian Companies Act 1913. On or about the 31st January, 1953 the company executed a first mortgage of its assets for Rs.1,25,000 in favour of Shankarlal Agarwalla and Dinanath Agarwalla in their firm of Bansidhar Shankerlal. On the 21st January, 1954 the company executed a second mortgage of the assets for Rs.2,00,000 in favour of Shankarlal Agarwala and Dinanath Agarwalla, in the name of their firm of Bansidhar Shankarlal. On the 25th November, 1954 a suit was filed for the enforcement of the said mortgages, being Suit No.3365 of 1954 (Bansidhar Shankerlal ors v. Laxmi Spinning and Weaving Mills Ltd.). In or about February 1955 one Nathmal Bhojnagarwalla instituted a suit in this High Court against the company and the mortgagees inter alia for a declaration that the mortgages were void. On the 13th May, 1955 a preliminary mortgage decree was passed in Suit No. 3365 of 1954. On or about the 22nd August, 1955 an order was made by this High Court for winding up of the said company at the instance of the petitioning creditor Satya Narain Jugal Kishore. In the winding up proceedings, an application was made by the said creditor for an order for examination of certain persons including the said Shankarlal Agarwala under Section 195 of the Indian Companies Act 1913 (hereinafter referred to as the said Act). On the 31st July, 1957 an ex parte order was passed by the Company Court, inter alia for examination of the appellant Shankarlal Agarwala under Section 195 of the said Act. The said Shankarlal Agarwala thereupon made an application for setting aside the said order. On the 14th September, 1961 Mitter J., made an order setting aside the said ex parte order dated 31.7.1957. The relevant part of the order is as follows :

(2.) In the meanwhile, on 16th November, 1960 Suit No. 301 of 1965 instituted by Nathmal Bhojnagarwalla was dismissed by consent after sanction was granted to the liquidators to enter into a compromise for the payment of a certain sum of money to the plaintiff in the said suit. It might be mentioned here that in the liquidation proceedings two private liquidators were appointed as the joint liquidators. On the 25th November, 1961 the petitioning creditor Satya Narayan Jugol Kishore made another application for the examination of several persons including the said Sanker Lal Agarwalla, under Section 195 of the said Act. On 21st May, 1962 an ex parte order was made by the company Court, inter alia for the examination of the said Shankar Lal Agarwalla under Section 195 of the said Act. Thereupon, the appropriate summons was issued and was served on the said Shankarlal Agarwalla. A copy of the said order dated 21st May, 1962 is set out at page 77 on the paper book. The order inter alia provided as follows : 1. That the persons mentioned in the schedule in the said order including the said Shankarlal Agarwalla be examined under Section 195 of the said Act concerning the trade, dealings, affairs and properties of the said company, such examination being held by the Registrar of this Court or such other officers as he may appoint. 2. That the said persons do bring with them and produce any document or documents in their custody or power relating to the said company at the time of such examination.

(3.) Leave be granted to the applicant (Satya Narain Jogol Kishore) to attend with attorney and Advocate to assist the Registrar or such other persons as he may appoint for the purpose of such examination.