9911796707
TMI Blog1930 (1) TMI 14X X X X Extracts X X X X X X X X Extracts X X X X ..... limitation run? Taking up the first point, it is now clear that even in England in spite of occasional use of loose expressions to the contrary, it is now settled that directors of companies are not trustees. In In re Forest of Dean Coal Mining Company [1878] 10 Ch. D. 450; 40 LT 287; 27 WR 594 . Jessel, M.R., said at page 451: "Directors have sometimes been called trustees, or commercial trustees, and sometimes they have been called managing partners "and at page 453 : "They are no doubt trustees of assets which have come into their hands, or, which are under their control, but they are not trustees of a debt due to the company. "In Fliteroft's Case, Exchange Banking Company, In re [1882] 21 Ch. D. 519; 52 LJ Ch. 217; 48 LT 86; 31 WR 174 , Bacon, V. C., no doubt said: "That the relationship of trustees and cestui que trust subsists between the director of joint stock companies and the shareholders, I do not entertain the slightest doubt. "But this statement is inconsistent with the remarkes of Lords Justices in the Court of Appeal and with later special judicial opinions. On appeal in the same case, Jessel, M.R., said: "If directors who are quasi trustees for the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. 109; 23 LW 161 . I have nothing to say as to the actual decisions in these cases but I think that the statement of Schwabe, C.J., in the former of these cases, namely, wherever there is control over money there is an express trust, a statement probably based upon the observations of Lord Esher, M.R., in Soar v. Ashwell [1893] 2 QB 390; 4 RR 602; 69 LT 585; 42 WR 165, 773, must be understood in the light of the other judgments of the Court of Appeal, in that case, which show that "Control" (in Lord Esher's judgment ) must be regarded as synonymous with vesting. As to the decision in Pachaiyappa Chetti v. Sivakami Ammal 8 , the facts are very plain and there is an express trust. I do not think that the remarks in these decisions affect the decision in Kathiawar Trading Company v. Virchand Dipchand 18 B. 119, with which I entirely agree. It follows, therefore, that directors can plead limitation. Coming now to the second point, the question really turns upon whether entirely new rights with a new cause of action arise on the winding up of a company. That for certain purposes new rights may be conferred by the winding-up of a company, there can be no doubt. One such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hiruvenkatachariar appearing for one of the directors argued that it is not all misfeasance for which directors may be liable under section 235. This might be so: but it is unnecessary to consider this point in this appeal. The appeal fails and is dismissed with costs. The learned Judge has given leave to the Official Liquidator to appeal and has authorized him to incur the expenses of the appeals from the assets of the company and we need not pass any further order as we agree with the discretion exercised by him. There will be one set of costs to the respondents. Cornish, J. Section 10 of the Limitation Act is founded upon the equitable doctrine explained by Bowen, L.J., in Soar v. Ashwell [1893] 2 QB 390; 69 LT 585; 42 WR 165, that, "Time (by analogy to the Statute ) is no bar in the case of an express trust, but that it will be a bar in the case of a constructive trust." In my Judgment it is settled by Kathiawar Trading Company v. Virchand Dipchand 18 B. 119, and the English authorities there cited that a director of joint stock company is not, in the language of section 10, "a person in whom property has become vested in trust for any specific purpose." An ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndian Act stated: "A specific purpose, within the meaning of section 10, must be a purpose that is either actually and specifically defined in the terms of the will or the settlement itself or a purpose which, from the specified terms, can be certainly affirmed." It is clear upon these authorities that the directors in the matter before us cannot be regarded as express trustees and, if they are not express trustees, section 10 of the Limitation Act does not operate to deprive them of their right to rely on any available provision or Article in the Act as a bar to the liquidator's claim. The question then is, whether a bar is furnished either by Article 36 or Article 120 of the Act, these being the only Articles which are suggested as having any application to the case. Admittedly, if the starting point of limitation is the alleged acts of misfeasance or breach of trust by the directors, the remedy would be barred whichever Article governed it. But it has been contended by the learned Counsel for the liquidator that the winding-up order is the starting point of the liquidator's right of applying to the Court under section 235 (1 ) of the Indian Companies Act, VII of 1913. Rel ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
