TMI Blog1949 (5) TMI 12X X X X Extracts X X X X X X X X Extracts X X X X ..... in cotton and to carry on the business of ginning cotton, spinning yarn and manufacture of linen cloth and other goods. The managing agents of the company are M/s. Hemendra Nath Dutta Sons Limited, a private limited company. They were so appointed on 10th March, 1943, for a period of 20 years. Two of the directors of the managing agency company, viz., Hemendra Nath Dutta and Rabindra Nath Dutta, are also directors of the company. The business of the company is at present being carried on by a board of directors consisting of persons other than the said Hemendra Nath Dutta and Rabindra Nath Dutta. The present board of directors has suspended the said managing agents. On 29th November, 1948, an application was presented to me for sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pection by the creditors at least a week before the meeting. I also appointed Mr. S.N. Bose, as a Special Officer and ordered him to make an inventory of the books and assets of the applicant. Pursuant to the directions Mr. A.B. Gupta investigated the accounts and made a report. He reported that there was huge loss of liquid assets amounting to about Rs. 29,00,000. According to him the liabilities of the company were Rs. 44,00,000 and the available resources for meeting the liabilities was Rs. 27,00,000 and the scheme was likely to founder for want of finance. On 13th March, 1949, meetings of creditors and shareholders were held. Mr. S. Banerji, a member of the Bar, acted as Chairman of the meeting. The auditor's report as well as the opi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... well as in value whose claims were not disputed by the company. The seheme as amended is annexed to the report of the Chairman, and marked 'G'. At the meeting of the shareholders, the scheme as amended was accepted by the shareholders of the value of Rs. 4,84,080 and opposed by shareholders of the value of Rs. 27,830. It is submitted that the scheme as amended should be sanctioned by me because it has been passed by the requisite majority of creditors and shareholders. Mr. S.C. Bose, appearing on behalf of some creditors, whose claims are disputed by the company, submits that the scheme has not been passed by the requisite statutory majority. The disputed creditors may be classed into two categories. There are creditors whose names appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... do not appear in the books of the company should not be considered as creditors unless they can show prima facie on this application to the satisfaction of the court that they are creditors. I am, however, of opinion that Mr. Bagaria and Mr. Basu were not entitled to be present in the meeting as holders of proxy from creditors. It has been held in England that for the purposes of a meeting of any particular class, proxies can be given only to the members of that class. In other words, at a meeting of creditors, only creditors were entitled to be present. Persons who hold proxies from creditors but who were not themselves creditors could not attend the meeting. Sir George Jessel held that it was a well established rule that at a meetin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat rule has been followed in England except where there is any statutory provision empowering outsiders to be present at meetings of a class of persons. The case reported in In re General Mortgage Society ( Great Britain ) Ltd. [1942] 1 All ER 414 is a case of that class. There, Rule 150 of the Winding-up Rules clearly provided that the Official Receiver could be present at a meeting of the creditors. There would have been no necessity for such a rule unless it was well established that the meeting could not be attended by any person outside the class of persons who were holding the meeting. For these reasons, I think I should follow the decision of Sir George Jessel in preference to the criticism of the text book writers. I am, ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e claims are admitted, ( b ) votes of creditors whose claims may be disputed but whose names appear in the books of the company, ( c ) votes of creditors whose names do not appear in the books of the company. The disputed creditors whose names do not appear in the books of the company and whose debts are disputed by the company will file before the Special Officer, a statement of their claims with particulars on or before 15th June, 1949, and I will decide at the time of the hearing of this application whether they are to be treated as creditors or not for the purposes of this application. I also direct the Special Officer to make a report as to the financial position of the company and as to the workability of the scheme, the report to ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
