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Issues Involved:
1. Legality of commission drawn by the managing agent. 2. Payment to Messrs. Parry & Co. for technical assistance. 3. Profit earned by the managing agent from sugar transactions and the applicability of limitation laws. Detailed Analysis: 1. Legality of Commission Drawn by the Managing Agent: The appellant, India Sugar Refineries Ltd., claimed that the managing agent, Ramalingam, wrongfully drew commissions on sugar sales. The agreement between Ramalingam and the company specified that he would receive a salary and additional commissions for various roles. The company argued that under Section 87-C of the Indian Companies Act (inserted by the Amending Act of 1936), any additional remuneration required special resolution approval. However, since the agreement was executed before the Amending Act came into force, the court held that Section 87-C did not apply. The managing agent was entitled to the commission as per the pre-existing agreement. Consequently, the appeal on this ground was dismissed with costs. 2. Payment to Messrs. Parry & Co. for Technical Assistance: Ramalingam engaged Messrs. Parry & Co. for technical assistance, paying them Rs. 1,500 per month, which was later sanctioned by the company's board to be paid from the company's funds. The court found that the contract was between Ramalingam and Messrs. Parry & Co., not the company. Although it was deemed dishonest for Ramalingam to have the company bear this cost, the court ruled that there was no legal basis for the company to claim this amount from Ramalingam's estate. The board's unjustified payment could make them liable, but not Ramalingam or his estate. Thus, the claim was unsustainable and dismissed. 3. Profit Earned by the Managing Agent from Sugar Transactions: Ramalingam earned Rs. 8,510 by purchasing sugar at a controlled price and selling it at a higher controlled price, using the company's resources. The court found that this profit should be held for the company's benefit under Section 88 of the Trusts Act, as Ramalingam was in a fiduciary position. The trial court dismissed the claim as time-barred under Articles 36 and 90 of the Limitation Act. However, the High Court disagreed, stating that the appropriate article was Article 120, which allows six years for such claims. The suit was filed within this period, making the claim valid. The court decreed the amount of Rs. 8,510 in favor of the company, deducting Rs. 2,406-1-0 for godown rent, with interest at six percent per annum from the date of the suit. Conclusion: The appeals were decided with detailed consideration of the agreements, fiduciary duties, and applicable legal provisions. The court upheld the legality of the commission drawn by Ramalingam, dismissed the claim regarding payments to Messrs. Parry & Co., and allowed the claim for the profit earned from sugar transactions, applying the correct limitation period.
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