RAM KISHAN Vs. KANWAR PAPERS PRIVATE LTD.

JUDGEMENT

(1.) KANWAR Papers P. Ltd. was incorporated under the Companies Act, 1956, on January 14, 1981, as a private company limited by shares. Its registered office is at Kala Amb, District Sirmur, in Himachal Pradesh. The managing director of the company, is one Kanwar Balbir Singh. His daughter is married to one of the sons of Ram Kishan Malik. One Shri H.K.S. Malik was the brother of Ram Kishan. He was once a District and Sessions Judge and after retirement enrolled himself as an advocate. Shri Jagat Narain who was a school teacher retired from service on February 15, 1981. He received some cash amount as part of retiral benefits. Smt. Sumitra Devi is the wife of Shri Jagat Narain.

(2.) ON June 5, 1984, Company Petition No. 2 of 1984 was presented in this court by Ram Kishan, Jagat Narain and Smt. Sumitra Devi. The petition contained a prayer for the winding up of Kanwar Papers P. Ltd. mainly on the ground that the company was indebted to the three petitioners to a huge extent. The amount that was due to the petitioners from the company till April 20, 1984, was Rs. 1,44,000, Rs. 60,000 and Rs. 75,000. The case of the petitioners is that the company stood in need of loan and its managing director, who was very closely related to one of the petitioners, obtained loans of Rs. 1,44,000, Rs. 60,000 and Rs. 75,000 over which interest at the rate of 18% per annum, as orally agreed, was due. The loans were given by the petitioners between February, 1981, and May, 1981. The first petitioner gave it since the managing director of the company was closely related to him. Smt. Sumitra Devi was treated as a dharam behan by the managing director. On the insistence of the managing director and on being induced and persuaded by him, Sumitra Devi borrowed money on the security of a plot of land which she possessed at Delhi, and gave it by way of loan to Kanwar Balbir Singh who had given out that he was in great financial difficulties as the loan granted to the company by the financial institutions was not forthcoming, considering it to be her sacred duty as a dharam behan.

(3.) THE three petitioners served a notice dated April 20, 1984, under Section 434 of the Companies Act on the respondent company at its registered office. In reply, what was said by the respondent company was that the amount had been brought by H.K.S. Malik, who was an additional director of the company, between November 22, 1981, and May 2, 1983, on his behalf and on behalf of the three petitioners for purchase of shares. Shares had, in fact, been allotted to the petitioners, as requested by them through H.K.S. Malik. The petitioners were. thus shareholders of the company and the story about the amount having been given on loan to the company by them was incorrect.