TMI Blog1949 (3) TMI 16X X X X Extracts X X X X X X X X Extracts X X X X ..... ficial liquidator has applied to the court stating that in his opinion a fraud has been committed by " Then the section goes on to state the class of persons who might be guilty of fraud, and then it goes on " .the court may, after consideration of the application, direct that any person ", and then it sets out the same class of persons which are mentioned earlier in the section. There is another section to which attention might be drawn in order to understand Sir Jamshedji's contention, and that is section 177B. Sub-clause (2) of that section provides: "(2) The official liquidator may also, if he thinks fit, make a further report or further reports, stating the manner in which the company was formed and whether in his opinion any fraud has been committed by any person in its promotion or formation or by any director or other officer of the company in relation to the company since the formation thereof, and any other matter which in his opinion it is desirable to bring to the notice of the court." Briefly put, Sir Jamshedji's argument is this that the statutory jurisdiction of the court can only be invoked after the official liquidator has made a report under section 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 177B. When we turn to the English Companies Act, which is in force to-day, we find that section 182 corresponds to section 177B and section 216 corresponds to section 196, and section 216 provides that "where an order has been made in England for winding up a company by the court and the official receiver has made a further report under this Act . . ." and that report under the Act is obviously the report referred to in section 182. Again, no similar words are to be found in section 196 of our Companies Act, and therefore, in my opinion, it would be open to the court to make an order under section 196 if the official liquidator applies under section 196, and in his application he states that in his opinion a fraud has been committed by any person whom he wants to get examined under that section. There is no doubt that in this case when the official liquidator applied by the chamber summons for an order under section 196 he has clearly and categorically stated that in his opinion Sir Fazal was guilty of a fraud and that he should be publicly examined. Therefore I see no force in Sir Jamshedji's contention that the order made by the learned Judge was an order without jurisdiction. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whether on the materials before us it can be said that in the opinion of the liquidator a prima facie case has been made out against the appellant of fraud. Now, to say the least, this particular Bank that was set up was run in a most extraordinary and curious manner. It seemed more to be a domestic family affair than a public corporation looking after the interests of the shareholders and the depositors. The majority of the shareholders were all relations. At the head of the tree stood Cassumally Munjee with his sons, his son-in-law, the father-in-law of his son. Sir Fazal Rahimtoola, and the liquidator in his report clearly states that the affairs of the Bank rested exclusively with Cassumally Munjee, his said two sons, his son-in-law Mahomedaly Javeri, and Sir Fazal Rahimtoola. Then the liquidator goes on to point out various gross cases of fraud which came to light after the company went into liquidation. He points out that the Munjees and their allied concerns are indebted to the Bank in the sum of Rs. 13,00,000 and there is also a prospective liability for calls of about Rs. 6 lacs, and he adds that the Munjees have dominated the Bank and they have literally played ducks ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts out that Sir Fazal Rahimtoola is closely related to the Munjees. In my opinion, the inference is irresistible, and the inference is that a man who is a director of the Bank and who takes an active part in the management of the Bank cannot but know of what was going on in the Bank, and therefore what the liquidator in effect does is this he suggests that Sir Fazal is privy to thes frauds practised which he has enumerated in his report. Sir Fazal made an affidavit in reply to the affidavit made by the official liquidator in support of the chamber summons, and it is pertinent to note that in this affidavit there is no denial of the statement in the report that he along with a few other directors was in exclusive charge, control and management of the affairs of the Bank, nor is there any statement with regard to the various frauds set out by the official liquidator, nor does he say that he was not aware of all that was going on in the Bank. It is a contentious affidavit which merely takes up a technical defence and does not place any materials before the court which would lead the court to the opinion that the opinion of the liquidator was not justified. Then to this affidavit the o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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