Judgment

GAJENDRAGADKAR, J. : The appellant Raja Narayanlal Bansilal of Bombay is the Managing Agent of a Limited Company named the Harinagar Sugar Mills Limited. By virtue of the power conferred on him by S. 137 of the Indian Companies Act, 1913 (VII of 1913) the Registrar wrote to the mills on November 15, 1954, that it had been represented to him under S. 137 (6) that the business of the company was carried on in fraud, and so he called upon the company to furnish the information which he required as set out in a part of his letter (Ex. A). On April 15, 1955, the Registrar made a report (Ex. AA) to the Central Government under S. 137 (5) of the said Act. This report showed that according to the Registrar the affairs of the company were carried on in fraud of contributories and they disclosed an unsatisfactory state of affairs. 31 The report pointed out that the appellant was the Managing Agent of the company as well as its promoter, and that it was suspected that under a fictious name of Bansilal Unchant Account the company was advancing money to the several firms owned by the appellant which were ostensibly purchased from the company s funds. The report further stated that betwe