- (1.) THIS is an application under Section 518 of the Companies Act, 1956 (hereinafter referred to as the Act), filed by the voluntary liquidator of Indo-Allied Industries Ltd. The company under liquidation had its registered office at Gorakhpur. Its Managing Agent, Ram Samujh Singh, opposite party No. 2 (now represented by his heirs), who was In charge of its business at Rangoon, opened an account on behalf of the company in the Rangoon branch of the Punjab Natio nal Bank Ltd., New Delhi, opposite party No. 1. The liquidator informed the Manager of the Rangoon branch of the Punjab National Bank Ltd., by a letter dated 6-2-57, that he had been appointed liquidator of the Company in a voluntary liquidation on 6-1-57. He sought informa tion with regard to deposits made at Rangoon on behalf of the Company since 1-7-1953. The Rangoon branch of the Punjab National Bank gave details of various deposits made which showed that a sum of Kayate 16, 101.75, (each K. is said to be worth roughly Re. 1 in Indian currency) stood to the Company's credit upto 30th of June, 1957. The liquidator was also informed that, after the closing down of the Company's Rangoon office, the account had become a "non-resident" account automatically so that the Burmese Exchange Control Department had to be given a full account of the concern and of circumstances leading to its liquidation before any transfer could be made to the liquidator in India. The liquidator gave the required details, but he was informed on 25-11-1957 by the Rangoon branch of the bank that an application made for the transfer of K. 16, 101.75 to India had been rejected by the Burmese Exchange Con trol Department. For a long time the liquidator did nothing more. But, in 1963 the liquidator learnt, as a result of fur ther inquiries, that the account of Indo-Allied Industries in the Rangoon branch was closed on 23-5-1961. The liquidator protested against closure of this account without his authority and after informa tion given by him that he was the liqui dator. The Rangoon branch of the Bank had been nationalised and its assets and liabilities were taken over by the Peo ples Bank No. 7 of Rangoon which, as the successor of the Rangoon branch of Punjab National Bank Ltd, informed the liqui dator, by a letter dated 29-9-1963, that the account was closed by payments made by three cheques, amounting to K. 16056. 75, to Ram Samujh Singh, the Director of the Company, who had been authorised, according to it, to operate the account singly. The petitioner claimed that the payments had been made collusively and wrongfully by the Rangoon branch of the Punjab National Bank Ltd., to Ram Samujh Singh, opposite party No. 2, after information given by the liquidator that the Company had gone into liquidation and before its nationalisation by the Burmese Government. The applicant seeks to fasten liability to pay the amount thus realised by Ram Samujh Singh on both the Opposite Parties.
(2.) NEITHER Ram Samujh Singh, op posite party No. 2, a permanent resident of Gorakhpur, who died during the pen dency of these proceedings, nor his heirs, who reside at Gorakhpur, have filed any reply or put in appearance. The Punjab National Bank Ltd. New Delhi, Opposite Party No. 1, has contested the applicant's claim and asserted that the bank's Rangoon branch was taken over by the Burmese Government on 23-2-1963. It denied any knowledge of the circums tances in which any sum was deposited with its Rangoon branch or how the ac count was closed. It, however, relied on the correspondence of the applicant with the Rangoon branch of the Bank and, after that, with the Peoples Bank No. 7, which the applicant had filed in this Court, to put forward the plea that the Rangoon branch was not satisfied that the applicant had legal authority to act on behalf of the Company as no information from any Court or other legal authority was received by the Rangoon branch of the bank. It also pleaded that, accord ing to the law in Burma, a "non-resident" account ceased to belong to the company. The Bank denies all responsibility for the transmission of the amount to India as the Control Exchange Department of Burma had rejected an application for the transfer of the amount to India. It pleaded that the authority of the liqui dator appointed under the law of this country could not be recognised in Burma which is a foreign country. Its case alone is that the applicant could only enforce his claim, if at all, in Burma against the successor of the Rangoon branch of the Bank according to the law in Burma. It denied that the petitioner had any cause of action against it in India. It is also pleaded that the liquidator's claim was barred by limitation. A further plea is that payments to Ram Samujh Singh satisfied the demand which could be made against the Rangoon branch of the Bank. The liquidator had prayed for the determination of only three questions under S. 518 of the Act and did not ask for anything more, but, after an examina tion of the detailed pleas taken by the two sides, the proceedings practically assumed the form of a suit. Issues were framed and evidence was taken by my learned brother Satish Chandra, J. when he was the Company Judge of this Court. The issues, as finally reframed, are as follows:- (1) Was the liquidator appointed in accordance with law? (2) Did the authority of Ram Samujh Singh, Opposite Party No. 2, to operate upon the account in dispute in the Rangoon branch of the Punjab National Bank come to an end on or after 6-1-1957? (3) Was there any collusion between the Opposite Parties to allow Ram Samuih Singh to withdraw the amount in dispute after the Bank had been informed that the Com pany was in voluntary liquidation and the Bank had agreed to trans fer the amount to the liquidator? (4) On proved facts and circumstances of the case, were both or either of the two opposite parties and if so. which party was liable to pay the amount in dispute to the liquidator? (5) Was the claim of the applicant timebarred? (6) Has this Court jurisdiction under S. 518 of the Companies Act to determine the liabilities of Opposite Parties on proved facts and cir cumstances? (7) To what relief, if any, is the applicant entitled?
(3.) ISSUES Nos. 2 and 3 and 4 reproduce the three questions contained in the ap plication under Section 518 of the Act which the applicant wants answered. Issues Nos. 1 and 5 and 6 have been raised by the pleas set up by the opposite party No. 1, the Punjab National Bank Limited, India.;