Balakrishna Ayyar, J. - (1.) 'Dinasari Ltd.,' now under liquidation, was started as a private limited Company in 1944. It was publishing two papers called "Dinasari" and "Kandipam". Its memorandum of association permitted it, among other things, "to carry on the business of... dealers in printing machinery, furniture, type, ink, paper etc. In an affidavit filed by the Official Liquidator and dated 29th. July, 1954, it is stated that the company was importing large quantities of news -reel and printing ink which it was using not merely for purposes of the papers it was publishing but also for sale on profit. In fact, but for the said profits the paper could not have been kept going for these years. The accounts of "Dinasari" from the beginning would show that large quantities of news reels, etc., were being imported from foreign places and sold to local customers for profit and that the purchases and sales were part of its regular business.
(2.) BY an order made in O.P. No. 96 of 1952 the company was ordered to be wound up. The Indian Bank claimed that various quantities of newsprint had been pledged to it by the company and on various dates in April, 1952, and, later this newsprint was sold for a sum of Rs. 92,277 -2 -0. The Indo -Commercial Bank, Ltd., made a similar claim in respect of other quantities of newsreel and these were sold on 11th December, 1952, for a sum of Rs. 8,606 -6 -6.
(3.) TWO petitions have been filed in relation to the moneys thus realised. Application No. 4436 of 1954 is by one Narayana Rao, and his case is this. In January, 1951, in association with four of his friends he formed a syndicate for the purchase and sale of paper. In January, 1951, they purchased various quantities from "Dinasari, Ltd". A further two lots were purchased in February, 1951. Yet more lots were purchased on 31st March, 1951, 4th April, 1951, 10th April, 1951, 23rd May, 1951, 18th October, 1951 and 28th December, 1951. In his affidavit he stated: In respect of the above purchases on 31st March, 1951, 4th April, 1951 and 10th April, 1951, 32 reels of newsprint of 17,933 pounds were delivered by the company on account of D. Govindarajulu and Mohanakrishnan under invoice No. 1041, dated 31st March, 1951. On 23rd May, 1951, the company under invoice No. 1031 in my favour delivered 6952 kilos or 15322 pounds of newsprint. Even so, the company under invoices, dated 18th October, 1951 and 28th December, 1951, bearing Nos. 1134 and 1158 respectively delivered to me five reels of 3209 pounds and one reel of 617 pounds. I may state here that during the arguments I specifically asked counsel when these deliveries were made and he told me that the delivery was on 2nd April, 1951. There is no mistake about this date because I made a note of it at the time. From time to time Narayana Rao paid to the company large sums of money aggregating to Rs. 81,000. He also insured the goods with the Union Insurance Society of Canton, Ltd. In his affidavit Narayana Rao further stated that though the purchases were made in the name of several members of the syndicate ultimately all the rest agreed with him that he should become solely entitled to receive delivery of the newsprint. Though he could have directly removed the reels to any godown of his own, he could not do so owing to the difficulty of obtaining godown accommodation and so the company agreed to keep for him newsprint amounting to 240 reels. On Ist November, 1951, the company wrote that they were holding the reels with them and would deliver them whenever he required. The company had no right to deal with these goods and the Indian Bank did not act bona fide in putting its lock on the godown in which these goods were stored. The money fetched by the sale of 24. reels belonged to him, and, he prayed for a direction that the Indian Bank, Ltd., be asked to pay him that money.;