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TMI Blog1933 (3) TMI 18X X X X Extracts X X X X X X X X Extracts X X X X ..... hers, Ltd., In re ( No. 2 ) . Without repeating anything which my brother Eve or I have said in either of those cases, I will express the opinion that the words "defraud" and' "fraudulent purpose" where they appear in the section in question are words which connote actual dishonesty involving, according to current notions of fair trading among commercial men, real moral blame. No Judge, I think, has ever been willing to define "fraud," and I am attempting no definition. I am merely stating what, in my opinion, must be one of the elements of the word as used in this section. In my opinion, it is not used in the same sense as that in which the word "fraud" is used in section 265 of the Act. There, following the example set by section 44 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... whether he be the Official Receiver or the liquidator or a creditor or a contributory. I now turn to the facts. (His Lordship, having stated these, continued:) A question has been raised as to what "solvent" means in section 266 of the Companies Act, 1929. It is to be observed that the onus of proving the company's solvency lies upon the debenture holder who is endeavouring to support his floating charge. It is not necessary to say that "solvent" there is limited to one meaning; but, in my opinion, a company is not solvent within the meaning of section 266 unless it can pay its debts as they become due. It has been urged that "solvent" means "commercially solvent," and that if, upon balance sheet figures, a company's assets exceed its li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the Companies Act. The question which I have to determine is whether, within the meaning of section 275 of the Companies Act, 1929, and construing the reference therein to fraud as I construe it, the business of the company was carried on for a fraudulent purpose. In my opinion, on the whole, I am not justified in coming to such a conclusion. The business of the company, so far as it was carried on during the latter part of its career, was carried on in order to clear up the position by getting in debts and by effecting sales of stock, and not with a view to securing by purchases on credit assets available as security for debentures. I am not clear in my mind that the first respondent was deliberately intending to carry out any frau ..... X X X X Extracts X X X X X X X X Extracts X X X X
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