BANK OF BARODA Vs. HBSHIVDASANI

JUDGEMENT

(1.) The applicant, as Official Liquidator of the Whittle Spinning and Manufacturing Company Limited, filed this application under Section 233 of the Indian Companies Act in the Court of the District Judge of Ahmedabad, asking for a declaration that the floating charge given to the Bank of Baroda by the Company, on June 13, 1924, was invalid as having been granted within three months of the commencement of the winding up. The instrument creating the charge in dispute Exhibit 77/5, was executed on June 13, 1924, by two Directors in favour of the Bank. A petition for the compulsory winding up of the Company was presented on August 7, 1924. Therefore, it is not denied that the charge was given within three months of the commencement of the winding up, and, as the District Judge has pointed out, any attempt to prove that the Company was solvent at the time the charge was created was bound to fail.

(2.) So the only question in issue was whether Exhibit 77/5 created a floating charge. The District Judge answered this question in the affirmative and declared the charge to be invalid, ordering the Bank to bear the whole costs of the application, as in his opinion the Bank had taken up an untenable position and wasted public time in defending the application.

(3.) The Bank has appealed.