THE OFFICIAL LIQUIDATOR versus RAGHAVA DESIKACHAR & ORS.

Citation: [1975] 1 S.C.R. 890 · Decided: 26-08-1974 · Supreme Court of India · Bench: P. JAGANMOHAN REDDY · Disposal: Dismissed
Cited by 1 judgment(s) · cites 1 · see the full citation network in Lexace
Open in Lexace · Ask the AI about this case
Judgment (excerpt)

THE OFFICIAL LIQUIDATOR 
.A 
v, 
RAGHA VA DESIKACHAR & ORS. 
August, 26 1974 
[P. JAGANMOHAN REDDY, M. H. BEG AND A. ALAG!RISWAMI, JJ.] 
dode of Civil Procedure-0.41, r. 11-Scope of. 
B 
Respondent No. 5, who wa.;; the Managing Director of a limited company, 
resigned his post and In his capacity as a shareholder filed an application in the 
District Court for compulsory winding up of the company, which was ordered. 
The Official Liquidator made an application before the District Judge that as the 
four Directors, respondent 1 to 4, had illegaJiy, withheld or retained certain 
amounts, they became liable to refund them. 
Contesting this application res-
pondents 1 to 4 requested that th~y might be allowed to cross examine respon-
dent no. 5, which application was rejected. On a'.ppeal the High Court set aside 
C 
the order of the District 1udge and remanded the case to the City Civil Court, 
Bombay to record additional evidence under Order 41 Rule 27, Code of Civil 
Procedure. 
-
On appeal it was contended in this Court that the High Court was wrong 
in directing additional evidence to be allowed under this Order. 
Dismissing the appeal, 
HELD : The High Court rightly ordered that additional evidence be record~ 
, ed in this case. There was no justification whatsoever for the District Court to 
reject the evidence which the respondent had intended to lead or to disallow the 
production of documents. 
[895 H; 896 A] 
Under 0. 41 r. 27 it is onIY where the Court had in1properly refused to admit 
evidence or .where the appellate court required additional evidence to be recorded 
in order to enable it to pronounce judgment that it could make such an order. 
Under cl. (b) of this rule the Court may require additional evidence either to 
enable it to pronounce judgment or when it may require additional evidence to 
be recorded for any other substantial cause. 
[894 A-BJ 
Arja1_1 Sinf?h v. Kartar Sinf?h and others [1951] SCR 258, State of U.P. v. 
Manhod11an Lal Srivastava, [1958] SCR 533, Municipal Corporation for Greater 
Bombay v. Lala Panl'ham of Bonibay, [1965] SCR 542 at 548 referred to. 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1283 of 1967. 
Appeal from the Judgment & Decree dated the 22nd March/26th 
April/26th June, 1963 of the Bombay High Court in Appeal No. 38 
of 1959. 
V. S. Desai and S. K. Gambhir for the appellant. 
D 
E 
F 
S. T. Desai, Ramesh D. Divan and R. P. Kapur, for the Respon-
dent Nos. 1-4. 
G 
R. M. Mehta, S. K. Dho/akia and R. C. Bhatia, for the Respondent 
No. 5. 
· 
The Judgment of th" Court was delivered by 
JAGANMOHAN REDDY, J.-This appeal is by certificate against the 
judgment of the High Court of Bombay varying the judgment and 
decree passed against respondents I to 4 by the District Judge of Nag-
pur on an application under s. 235 of the Indian Companies Act 7 
of 1913-hereinafter called 'the Act'. 
H 
A 
B 
c 
D 
E 
-
F 
G 
H 
OFFL. LIQUIDATOR v. RAGHAWA (Jaganmohan Reddy, J.) 
8 9I 
It appears that in or about APril 1949 the Industrial & Agricultural 
Engineering Company (C.P.) Ltd.-hereinafter referred to as 'the 
Company' was formed under the Act with its registered office situated 
at Nagpur. From the date of the Company's incorporation till August 
27, 1952 one Shantila! Nemchand Shah respondent 5 was the Manag-
ing Director, while respondents 1 to 4 were the Directors of the Com-
pany. On August 27, 1952, respondent 5 resigned as Managing 
Director and in his place two Directors C.V. Krlshnamurthi respondent 
2 and M. Ganpatram respondent 3 were appointed Directors. These· 
two new Directors were the employees and Directors of a concern 
known as Industrial & Agricultural Engineering Company (Bombay) 
Ltd.-hereinafter called 'the Bombay .company'. Respondent 4 T. 
K. Shamu is the cousin of respondent I Raghawa Desikachar. There 
was also a partnership firm consisting of respondent 1 and some others. 
The office of this partnership was located in the office of the Bombay 
Company. After August 27, 1952, respondent 5 having resigned the 
.office of Managing Director was only a shareholder and it transpired 
that as the Company was not making profits, the Directors called a 
meeting of the shareholders of the Company on July 29, 1954, in order 
to obtain a Special Resolution for voluntary liquidation of the Com-
pany. Even before this meeting took place, respond~nt 5 as share-
holder of the Company filed an application on July 26, 1954 in the 
District Court at Nagpur against
Excerpt shown. Read the full judgment & AI analysis in Lexace.