TaxTMI 
TaxTMI 
1960 (8) TMI 42
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....at the company should go into voluntary liquidation and appointed the first respondent, the liquidator. He was empowered to exercise the powers mentioned in clauses (i) to (iv) of subsection (2) of section 457 and section 546(1) of the Companies Act. By another resolution, an advisory committee consisting of five members to be elected by the shareholders was constituted. On July 25, 1958, the liquidator issued a public notice fixing August 25, 1958, for the sale of "all the assets and liabilities of the company as going concern" in public auction. Simultaneously, he issued a notice to all the shareholders of the company requesting them to be present at the sale. On the notified date, public auction was conducted in the presence of an extraordinary general body meeting of the shareholders of the company. As required by the liquidator, the shareholders passed a resolution enabling the liquidator to accept the highest bid at the public auction. In the auction held on the 25th there was a keen competition between the first appellant, represented by Sri S. R. Kimtee, and the second respondent. The bid of Rs. 7,55,000 offered by the second respondent being the highest, the liquidator pl....
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.... the liquidator and the balance remaining unpaid by the second respondent was about Rs. 4,25,000. It is to pay this sum that the second respondent prayed for extension of time, the reason adduced for the request being that he was unable to fulfil the terms of the contract on account of cyclone that had occurred a few days before. The liquidator, taking into consideration the fact that the second respondent assented readily to the sale of the G. P. notes and the circumstances mentioned in the application for extension of time, extended the time up to May 11, 1959, with the concurrence of the advisory committee. Before the expiry of this time, two of the shareholders filed the application out of which this appeal arises for the reliefs already mentioned. Between February 25, 1959, and the filing of the application, some more amounts aggregating Rs. 87,000 were realised. During the pendency of the application the auction purchaser paid the balance of the third instalment. In support of the application, it was urged before our learned brother that the liquidator had no jurisdiction to extend the time for payment of the balance of the sale price and that he could not appropriate the ....
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....ed that the appellants did not participate in the meeting and oppose the resolution. Thereupon, the convenor filed his report on December 11, 1959, and it was accepted on January 8, 1960. Statement was made at the bar that the learned Advocate-General appearing for the appellants stated that he would not raise any objection to this report. Thereafter, the application came on for final disposal before our learned brother and he dismissed it in the view that it was competent for the liquidator to extend the time by reason of the provisions of section 546 of the Companies Act and the powers conferred on him by the resolution of the general body meeting of the shareholders at the time of the appointment of the liquidator, especially having regard to the fact that his action was approved by the majority of the shareholders as recited above. It is this conclusion of the learned judge that is impugned before us in this appeal. In support of this appeal, Sri Ayyappa Sastry made three submissions: ( i) that the learned judge had no jurisdiction to direct the convening of the meeting of the shareholders of the company by the official liquidator to ascertain their wishes; (ii) that the offi....
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.... the alleged irregularity as to sufficiency of notice, the argument is equally unsubstantial. A reference to the notice will clearly indicate that the official liquidator had given twenty-three clear days' notice. In regard to the lodging of proxies, we do not think that there is any error or irregularity committed by the liquidator. It is true that under the present provisions of the Companies Act, 1956, more than forty-eight hours need not be given for the lodging of proxies. But that is not the same thing as saying that if more than forty-eight hours is given for the lodging of proxies it renders the meeting irregular. Be that as it may, it is not open to the appellants to raise this objection now having regard to the fact that the learned Advocate-General appearing for them had categorically stated that he was not going to make any objection to the official liquidator's report and also to the fact that at the final hearing of the application before our learned brother no such contention was advanced. Nor was that point even taken in the memorandum of the grounds of appeal against the order of the learned judge. For these reasons, this contention is repelled. The third point to....
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....pted by the liquidator. But the argument pressed upon us is that while it was permissible for the liquidator to seek the permission of the general body of shareholders before he actually extended the time, he could not do so after he had actually granted further time in that regard. We do no think that this makes any difference. All that matters is the approval of the action of the first respondent. If what was done by this respondent was in any way detrimental to the interest of the shareholders, it would not have met with this assent. It is not suggested that the general body had derived any advantage by ratifying the action of the liquidator. In such a situation, it is not open to two of the shareholders holding only 205 shares out of a total of 50,000 shares to question the validity of the resolution in this regard. Moreover, the official, liquidator could not disregard the attitude of the second respondent in regard to the realisation of the Government promissory notes and other assets earlier in considering the latter's request for extension of time. In this context, it is to be remembered that the second appellant intimated to the first respondent that he had no objection to....