Suit filed against representatives of the deceased managing director.

This appeal is from the judgment and decree in Original Suit No. 216 of 1958 on the file of the Sub-Court, Coimbatore. The decree has been passed against the appellants, defendants in the suit, for payment of a sum of Rs. 19,585-23 nP. to the plaintiff-respondent, which is a company under voluntary liquidation. The correctness of this decree is called in question by the appellants, mainly on the ground that the suit is not maintainable.

The facts are these. The Utilities (India), Limited, a company registered under the Indian Companies Act, which will be referred to in this judgment as the Company was managed by a certain Venkatesalu Naidu. The defendants are his sons: The Company did not function properly, and consequently the members (share-holders) passed a special resolution in the General Body meeting held on 24th August, 1955, that the company be wound up voluntarily. One of the directors, R. T. Naidu, was appointed as the liquidator. The Managing Director, Venkatesalu Naidu had in his hands a sum of Rs. 25,585-23 nP. belonging to the company, and was also in possession of the company’s account books. In spite of the request of the liquidator he failed to hand over the cash or the account books. He, however, remitted into the bank to the credit of the company various amounts between 21st October, 1955 and 18th April, 1957 aggregating to Rs. 6,000. Venkatesalu Naidu died in or about July, 1957. In this suit the Liquidator claims, after giving credit to the sum of Rs. 6,000 paid by Venkatesalu, the balance of Rs.19,585-23 nP. left with him. It is alleged in the plaint that the defendants are his undivided sons, and that the amount claimed belong to the company, but was improperly utilised by Venkatesalu, for the purpose of his family business and for improving his family lands. It is stated further that the defendants were benefited by reason of the utilisation of the company’s funds, and that therefore they are liable to repay the amount to the company from and out of the assets of their joint family.

The defendants no doubt resisted the suit but they did not deny that Venkatesalu, their father, had with him the amount claimed in the suit, belonging to the company. They contended that Venkatesalu was not the only Managing Director, that the management of the company was with a firm of managing agents called Mitra & Co., consisting of two partners, Venkatesalu Naidu and the present liquidator, R. T. Naidu. They pleaded that the Liquidator was as much a person liable to make good the payment to the company as Venkatesalu himself and that, therefore, the suit against the legal representatives of Venkatesalu would not be maintainable. They also stated that no amount of the company remained with them. They alleged that a sum of Rs.15,000 was used by Venkatesalu himself, for the purpose of acquisition of the shares belonging to the other members of the company and that another sum of Rs. 12,000 had been paid by Venkatesalu on various occasions. In effect therefore, their plea was twofold (1) discharge and (2) non-maintainability of the suit. At the time of the trial of the suit, it appears that the defendants further pleaded that the suit itself was barred by reason of section 543 of Indian Companies Act. These ontentions on the part of the defendants were over-ruled by the learned Subordinate Judge, who, as stated already, granted a decree in favour of the plaintiff as prayed for.

Learned counsel for the appellants frankly conceded that the finding of the Court below, as regards the plea of alleged discharge, cannot be successfully challenged, in view of the state of evidence in the case. It is, therefore, clear that Venkatesalu was liable to pay the sum of Rs. 19,000 and odd, and his legal representative, the present defendants having got or being in possession of the joint family assets, are equally liable for the payment of the amount. Learned Counsel, however, strenuously contends that section 543 of the Indian