VEMURI PARANDHAMIAH Vs. RNARASIMHA RAO

JUDGEMENT

(1.) This is an appeal against the judgment of Bell, J., in a misfeasance proceedings under Section 235 of the Indian Companies Act directing that the appellant's Conduct as managing director of the company should be examined under Section 235 of the Act and that the conduct of the second respondent as official liquidator of the company now in voluntary liquidation should be similarly examined under the said section.

(2.) Sri Vijayavada Motor Transport Company Limited was incorporated as a. private limited company under the Indian Companies Act on 17 November, 1944. On 26 November, 1944, the Board of Directors appointed the appellant as its managing director. The company commenced its business on 1 December, 1944, and the appellant continued as its managing director until 14 June, 1947. On that date, the company went into voluntary liquidation and the second respondent who was the resident of the board of directors was appointed liquidator. There were some prior proceedings relating to the winding up of this company which have been referred to in the course of the arguments but which are not very material for the purpose of the disposal of this appeal. The present application-was filed by one R. Narasimha Rao under Secs.216 and 235 of the Indian. Companies Act for an enquiry against the appellant and the second respondent, i.e., the ex-managing director and the liquidator with reference to certain charges of misfeasance, breach of trust, malfeasance and non-feasance, particulars of which were set out more fully in the affidavit filed in support of this application. The application was resisted by the appellant and the second respondent on the ground that as the company is under voluntary liquidation and was not wound up by an. order of the Court, misfeasance proceedings under Section 235 of the Companies Act could not be initialed and that Section 235 has no application at all to the facts of the present case. This objection was overruled by the learned. Judge and he directed an enquiry. Against this order, the present appeal has been preferred by the ex-managing director.

(3.) On behalf of the respondent, a preliminary objection was taken regarding the maintainability of the appeal. The decision of this question turns mainly upon a proper interpretation of Section 202 of the Indian Companies Act. As we are, however, of opinion that the appeal should fail on merits, it is unnecessary to consider the preliminary objection and express an opinion upon it.