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Karnataka High Court
SUDHAKAR SYNDICATE P. LTD - Appellant
Versus
H. M. CHANDRASEKHARIAH -Respondent
Decided On : 03-20-81
The main legal point established is the liability of the respondents under Sec. 446(2)(b) of the Companies Act, 1956 for the repayment of the chit fund transaction amount.
Headnote:
Sec. 446(2)(b) - Recovery of Chit Fund Transaction - The court considered the application filed by the official Liquidator under Sec. 446(2)(b) of the Companies Act, 1956 to recover a sum of Rs. 1709 being the principal and interest due from respondents 1, 2 and 3 jointly and severally in respect of the chit fund transaction the 1st respondent had with the Company in liquidation while it was carrying on business.
Fact of the Case:
The official Liquidator filed an application to recover a sum of Rs. 1709 being the principal and interest due from respondents 1, 2 and 3 in respect of the chit fund transaction.
Finding of the Court:
The court analyzed the chit fund transaction and the execution of the promissory note, and concluded that the respondents were liable to repay the amount due to the Company in liquidation.
Issues: The issues involved the recovery of the chit fund transaction amount from the respondents and the liability of the sureties.
Ratio Decidendi: The court found that the official Liquidator's claim for recovery was valid under Sec. 446(2)(b) of the Companies Act, 1956, and the respondents were jointly and severally liable for the amount due.
Final Decision: The court decided in favor of the official Liquidator, ordering respondents 1, 2, and 3 to repay the principal and interest due from the chit fund transaction.
( 1 ) THIS is an application filed by the official Liquidator under Sec. 446 (2) (b) of the Companies Act, 1956 to recover a sum of Rs. 1709 being the principal and interest due from respondents 1, 2 and 3 jointly and severally in respect of the chit fund transaction the 1st respondent had with the Company in liquidation while it was carrying on business.
( 2 ) THE Chit value was Rs. 2,500. Respondent-1 was the highest bidder at the auction held for chit Group-DLN of the Company (in Liquidation ). The auction was held on 23-6-74. He received the prize amount on 22. 7. 74 and on the latter date, he executed a promissory note for Rs. 1,675-00 promising to repay the said amount together with interest at the rate of 18% per annum. Respondents 2 and 3 executed the pronote as sureties.
( 3 ) AFTER the Company came to be wound up, the Official Liquidator issued notice of demand to respondents for the payment of the balance due by the 1st respondent in respect of the aforementioned transaction he had with the Company without success.
( 4 ) THE Official Liquidator's claim is as follows:
