1946 (6) TMI 7 - HC - Companies Law

Summary

Issues:
1. Claim for remuneration of Rs. 1,800 by the plaintiff.
2. Claim of Rs. 1,750 as an advance made to the defendant company.

Analysis:

Claim for Remuneration (Rs. 1,800):
The plaintiff, a former shareholder and Managing Director of the defendant company, claimed remuneration for services rendered as an engineer. The plaintiff contended that he was promised Rs. 100 per month for his work. The Court found that the first reconstituted Board passed a resolution to pay the plaintiff Rs. 100 per month from December 1932 to May 1934. The Court decreed the amount as a preferential claim. The defendant argued that no reference was made by the second reconstituted Board for the remuneration claim, and no valid resolution authorized such payment. The lower Appellate Court concluded that there was no implied contract for remuneration, and the plaintiff was not entitled to any remuneration. The High Court affirmed this decision, dismissing the appeal in part.

Claim of Rs. 1,750 as an Advance:
The plaintiff claimed Rs. 1,750 as an advance made to the defendant company along with another director to meet liquidation expenses. The plaintiff contended that the amount should be treated as a preferential claim. The Court analyzed the provisions of the Indian Companies Act and the reconstruction schemes. It was found that the loan advanced by the plaintiff for liquidation expenses should have priority over other debts. The Court affirmed the decision of the lower Courts, treating the amount of Rs. 1,750 as a preferential claim. The Court rejected the appellant's argument that the arbitrator had no power to allow the claim as a preferential one. The decision was upheld, dismissing the appeal and cross-objection.

In conclusion, the High Court of Calcutta upheld the lower Courts' decisions regarding the claims of remuneration and the advance made by the plaintiff to the defendant company. The Court affirmed that the plaintiff was not entitled to the claimed remuneration of Rs. 1,800, and the amount of Rs. 1,750 was treated as a preferential claim due to the circumstances of the loan being advanced for liquidation expenses. The appeal and cross-objection were dismissed with costs.