T P SOKKALAL RAM SAIT FACTORY PRIVATE LIMITED IN RE PRABHAKARAN Vs. T P S H SELVA SAROJA

JUDGEMENT

(1.) THIS is an application for a direction to stay all further proceedings in pursuance of the certificate issued by the Income-tax officer, Central Circle IX, Madras-600034, under the following circumstances; company Petition No. 84 of 1969 was filed for relief regarding management of the affairs of the company. T. P. Sokkalal Ram Sait Factory Private Ltd. , and for the protection of the interest of the applicant by removing the managing director and placing the management of the company in the hands of an administrator. The said application has already been heard and the matter is pending for judgment. On September 26, 1973, the managing director of the company in which the applicant is a shareholder wrote to him claiming a sum of rs. 5, 56, 866. 43 as on August 16, 1973, and wanted confirmation of the balance due from the applicant. The applicant relied on October 18, 1973, saying that he did not owe any sum to the company and repudiated the claim. The applicant is a shares holder of the said company and the managing director to his mother.

(2.) ON January 24, 1974, the Income-tax Officer wrote a letter regarding the tax arrears in the case of T. P. Sokkalal Ramsait Factory private Ltd. , Mukkudal, in which the applicant is a shareholder. It was stated in the said letter that the applicant had to pay a sum of Rs. 3, 30, 103 as on august 15, 1970, and the applicant was asked to indicate the amount owed by him as on August 15, 1973, to the company. As the company was a defaulter, the applicant's properties were to be attached and a tax recovery certificate was issued to the Tax Recovery Officer, Tirunelveli. The Tax Recovery Officer, tirunelveli, sent a notice of demand and a copy of a certificate issued under section 226 (3) of the Income-tax Act, 1961. According to the applicant he had been kept away from the management of the affairs of the company and his mother, the managing director, had manipulated the account showing large sums as being due from him to the company. It is stated that there was a dispute about the amount due to the company and that the applicant had not been served with a notice of demand. It is also stated in the petition that there was search in the premises of the company in January, 1970, when large sums of unaccounted money were unearthed. It is alleged that the managing director has secreted the funds of the company and is in possession and enjoyment of the movable properties and that the applicant could not be held liable until the properties and assets in her possession were proceeded against. It is stated that there are huge liabilities of the company arising out of the mismanagement by the managing director. The prayer in the application is to stay all further proceedings in pursuance of the certificate issued by the Income-tax Officer, central Circle IX, Madras-600034, and to appoint an interim receiver to take charge of accounts and management of the company.