Shiv Dayal vs Liberty Finance (P) Ltd. (In ... on 20 November, 1979
(9) Mr. Jain referred to the Official Liquidator Madras v. C. V. Raman and three others (1966(2) Co. Law Journal 124) in which public examination was directed with regard to the co-directors including the Managing Director. The court set aside the order with regard to three other directors but upheld the order in so far as the Managing Director was concerned. The reason why it set aside the order with regard to the three directors was that in the report of the Official Liquidator, it is mentioned that the conduct of the Managing Director was fraudulent and the report went on to say that even if it was assumed that the directors had not participated in the Managing Director's fraudulent acts they would be liable to reimburse to the company for the loss caused thereby. So in that case even on Official Liquidator's showing there was not even a suggestion of prima facie case against those directors. So while refusing to call them, the prayer of Official Liquidator to call the Managing Director was upheld. That case is clearly distinguishable. In the present case Managing Director has been called, and there is serious allegation suggesting fraud and about his conduct, he being the Managing Director.