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Issues Involved:
1. Applicability of the stay order under section 153 (5) of the Companies Act. 2. Whether the proceedings before the Chief Presidency Magistrate fall within the ambit of the stay order. 3. Determination of the complainant's status as a creditor of the bank. 4. Examination of the allegations in the petition of complaint to establish the nature of the alleged offence. 5. Legal implications of entrustment and the ownership of the shares. Issue-Wise Detailed Analysis: 1. Applicability of the stay order under section 153 (5) of the Companies Act: The petitioners argued that the proceedings before the learned Magistrate were covered by the stay order issued under section 153 (5) of the Companies Act. The stay order, issued on 20th May 1947, stated, "the commencement and/or continuation of all suits and proceedings against the said company, its directors and officers in the meantime be and the same are hereby stayed." The petitioners contended that this broad order should encompass the criminal proceedings initiated by the opposite party. 2. Whether the proceedings before the Chief Presidency Magistrate fall within the ambit of the stay order: The Court noted that section 153 (5) of the Companies Act pertains to proceedings against the company alone. However, Edgley, J.'s order included directors and officers, which was interpreted to mean directors and officers in their representative capacity, not in their personal capacity. The Court emphasized that the proceedings before the Magistrate could only be stayed if they related to matters adjustable under section 153, which involves issues between the company and its creditors or members. 3. Determination of the complainant's status as a creditor of the bank: The opposite party claimed that he was not a creditor but had merely kept shares in safe custody with the bank. The Court examined whether the opposite party could be considered a creditor based on the facts alleged. The Court concluded that a person holding specified chattels for safe custody does not qualify as a debtor, whether present, contingent, or prospective. The Court rejected the broad proposition that any pecuniary claim entitles one to be a creditor under section 153. 4. Examination of the allegations in the petition of complaint to establish the nature of the alleged offence: The petition of complaint alleged that the petitioners, as officers of the bank, induced the opposite party to open a current account and purchase shares through the bank, which were to be held in safe custody and delivered on demand. Despite repeated requests, the shares were not delivered, leading to allegations of fraudulent conversion and breach of trust. The Court analyzed whether the complaint alleged a criminal breach of trust in respect of specific shares or merely a fraudulent operation of the banking account. 5. Legal implications of entrustment and the ownership of the shares: The Court considered whether the shares became the opposite party's property upon purchase by the bank and whether there was a legal entrustment of these shares for safe custody. The Court noted that the complainant's allegations suggested that the shares were purchased and debited to his account, but there was no evidence of actual delivery or transfer of ownership. The Court concluded that further proceedings were necessary to determine whether the shares were specifically entrusted to the bank and whether the complainant was a creditor or merely a depositor of specific chattels. Conclusion: The Court decided to remit the case to the learned Chief Presidency Magistrate to proceed until it could be determined whether there was a legal entrustment of specific shares that had become the complainant's property. If such entrustment was established, the case would proceed further. If not, the proceedings would remain stayed. The Court clarified that this decision was limited to the application for stay and did not preclude the petitioners from challenging the validity of the proceedings on other grounds.
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