CALCUTTA CITY BANK LTD Vs. STATE

JUDGEMENT

(1.) This is an application by the Court Liquidator under Section 45G of the Banking Companies Act for public examination of five persons who are directors of the Calcutta City Bank Ltd. now in liquidation. Except one, all the four other directors have appeared through Counsel.

(2.) This bank was directed to be wound up by an order of the Court dated 25-4-1949. After the Court liquidator as Official Liquidator took over charge of this Bank in liquidation, he caused an investigation to be made from the availble bocks and records by the Audit Investigating Officer attached to his office. From the report of the said officer, the liquidator has formed his opinion that loss has been caused to this banking company.

(3.) In support of his opinion he furnishes three major facts. One is that a firm named Finance and Facilities had an overdraft account with the bank. The address of the firm appeared to be the same as that of the bank itself. The liquidator suggests that it is apparent that the management of the bank was directly concerned with or interested in the said firm- From the Current Account Ledger it appears that on the date of the winding up order a sum of Rs. 26,414/13/- was outstanding in the name of the said account of that firm. Neither the said firm nor its assets are traceable. He, therefore, rightly concludes that loss has been caused to the bank to the extent of Rs. 26,414/13/- and he suggests that the loss was due to the acts or omission of the directors for the relevant period. The other fact is that there was another firm of the name cf Central Stores and Agency which also had an overdraft account with the bank. There again the address of the firm was given as the same as the head office of the bank itself. The liquidator, therefore thinks that the management of the bank was either directly concerned with or interested in the said firm. The amount which was outstanding on the date of the winding up order of the bank in the name of the said firm was Rs. 28,111/1/10. Here again neither the said firm nor its assets are traceable. The liquidator, therefore, rightly concludes that a loss to the extent of Rs. 28,111/1/10 has been caused to the bank and he suggests that the loss was due to the acts or emission of the directors for the relevant period. There is a third fact which is also placed by the Liquidator before this Court. It is this. The Bank is supposed to have granted a large number of leans and overdrafts without any security. The borrowers cannot be traced and in most cases no addresses are given in the books of the bank in respect cf these unsecured debts. The liquidator has found out that a total loss has been caused to the bank of a sum more than Rs. 7,88,070/13/6 and he is of the cpinion that it is due to the acts or omission of the directors of the relevant period. He, therefore, new wants an order for public examination of the directors in accordance with the provisions of Section 45G of the Banking Companies Act.