D C MEHTA OFFICIAL LIQUIDATOR Vs. JOGESHWAR PRASAD

JUDGEMENT

(1.) This proceeding has been started on an application of the official liquidator of the Gaya Sugar Mills Ltd. (In liquidation) (hereinafter referred to as the " Company ") under Sections 235 and 195 of the Indian Companies Act, 1913. Originally the proceeding was started against 23 persons, who were or had been the directors of the company during the relevant period. Out of those 23 persons, original opposite parties Nos. 1 (Lala Gurusaran Lal), 2 (Shah Mustafa Ahmad), 7 (Vishnu Prasad), 8 (Arjun Prasad), 21 (Banarsi Prasad) and 23 (Munshi Ram Sengala) have since died. By order dated September 5, 1963, the names of the following original opposite parties:

(2.) Now, the proceeding is, therefore, prima facie confined against five persons only, namely, (1) Jogeshwar Prasad (original opposite party No. 4), (2) Sohan Lal* Jajodia (original opposite party No. 11), (3) C.C. Pyne (original opposite party No. 15), (4) O.N. Jajodia (original opposite party No. 16) and (5) C.N. Rajgarhia (original opposite party No. 17).

(3.) Now, coming to the relevant facts: This company was originally incorporated as a private limited company in the name and style of " The Ramchand Ram Shah Mustafa Ahmad Sugar Mills Ltd." and in the year 1934 was converted into a public limited company with an authorised capital of rupees seven lakhs, the first three subscribers being Ramchand Ram, Shah Mustafa Ahmad and Lala Gurusaran Lal, all of Gaya. The capital was raised from time to time to rupees one crore by 1946, which was partly subscribed, and for the balance, debentures of the value of Rs. 25 lakhs were issued. The company had raised its capital, in view of certain schemes for expansion of its business, particularly the establishment of a sugar mill at Warsaliganj, a place 50 miles away from Gaya, which eventually did not materialise, for the reasons which I would enumerate hereinafter, and the company found itself in serious and stringent financial difficulties, which resulted in its winding up, and a winding up order was made by this court on the 14th of November, 1951, and one Shri D.C. Mehta was appointed as the official liquidator by an order of this court da ted the 1st of February, 1952.