In Re: The Calicut Bank, Limited

Alfred Henry Lionel Leach, C.J.—The appellant is a company registered under the Indian Companies Act, 1913. It carried on business as a banking concern in Colombo and Madras. By reason of a rush by depositors to withdraw their monies with the company it was compelled to suspend its business at Colombo on the 15th August last, and at Madras the next day. On the day it suspended business at Colombo the directors presented to this Court a petition u/s 153 of the Indian Companies Act asking the Court to refer a scheme which they had prepared, to the shareholders and creditors for their consideration. The scheme had for its object the continuation of the company''s business. At the same time an application for staying all other proceedings was filed. The case came up before Venkataramana Rao, J., on the 17th August, but was adjourned until the 19th of that month. On that day a petition was filed by certain creditors asking for an order directing the compulsory winding up of the company. When the matter came up before Venkataramana Rao, J., on that day he granted an interim stay which he continued on the 22nd until the 26th. The matter came before the Court on the 26th but the hearing was adjourned until the 30th August when the winding up petition also came before Gentle, J. The learned Judge ordered notice to issue on the application by the directors u/s 153 of the Act but removed the stay order. He then passed an order appointing Messrs. Fraser & Ross provisional liquidators. This order was, of course, passed on the application for winding up. The appeal which is now before us is an appeal against the order of Gentle, J., removing the stay. The directors maintain that the winding up petition should not be heard until the scheme has been placed before the shareholders and the creditors. We can see no substance whatever in this argument. There is no reason why the application for winding up should not be considered by the Court. In fact it should be considered at the earliest possible moment. Even if an order for winding up is passed it will not interfere with any proper scheme being considered. The appeal is dismissed with costs, one set.