Aggarwal, J. - (1.) The present appeal is directed against the judgment and order dated 26th November, 1975, passed by a learned single judge of this court in Company Petition No. 22 of 1974.
(2.) The petitioner, Velabai Laxmidas Bhanji, had given a loan of Rs. 2,500 to a company named Deccan Farms and Distilleries Private Limited on or about 10th September, 1973, for which the said private limited company issued a loan certificate acknowledging the loan of R. 2,500 from the petitioner repayable on 31st August, 1974, being the date of maturity carrying interest thereon at the rate of 15 per cent. per annum. By her attorney's letter dated 26th September, 1974, the petitioner demanded the repayment of the said sum of Rs. 2,500 with interest thereon and by the same letter she gave a statutory notice as required under s. 434 of the Companies Act, 1956. The said statutory notice was addressed to private limited company. It appears that, after the said transaction, the private limited company was converted into a public limited company, and certificate of change dated 19th November, 1973, was duly obtained from the Registrar of Companies. After the said change was made, the public limited company invited subscription from the public and in this connection issued a prospectus whereby 3,00,000 equity shares of R. 10 each were offered to the public. The subscription was opened on 8th April, 1974, and was to close on 22nd April, 1974. A sum of Rs. 2.50 was required to be paid on application and a further sum of Rs. 2.50 on allotment. It appears that the shares were over-subscribed. The company, however, received Rs. 15 lakhs on the basis of the money paid on application and on allotment in respect of the said 3,00,000 equity shares. The company applied for permission to list the shares on the Bombay Stock Exchange before the expiry of 10 weeks from 22nd April, 1974, as required by s. 73 of the Companies Act, 1956. However, the said permission was withdrawn on 26th April, 1975, on account of the failure on the part of the company to fulfill the various formalities or requirements. Some of the directors of the company filed a complaint with the General Branch, C.I.D., Bombay, in consequence whereof the bank accounts of the company were frozen. Before the bank accounts were frozen, the company utilised about 8 lakhs of rupees out of 15 lakhs of rupees received pursuant to the prospectus for making payment to Messrs. Tawkly Industrial Corporation for the purchase of machinery. It is an admitted fact that the managing director of the company Shri A. B. Patil and his brother, Shri I. B. Patil, who was also a director of the company, are interested in the said Tawkly Industrial Corporation. Although the hands of Shri A. B. Patil were tied down with the freezing of the company's bank accounts, nevertheless he obtained certain orders from this court for withdrawal of moneys. The said account has been naturally reduced to that extent.
(3.) Reverting to the said letter of demand and the statutory notice dated 26th September, 1974, the public limited company by its letter dated 8th October, 1974, did not dispute its liability and, on the other hand, expressed its extreme regret for the inconvenience caused to the petitioner. It was also stated that the company was trying its best to repay as soon as funds were in its hands.;