1933 (4) TMI 12

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... , are not registered shareholders. They claim to hold the shares of one Lala Debi Datt as security for loans advanced to him. As security for those loans they took the share certificates and blank transfers. These transactions took place some time before the company went into liquidation. The mortgagees of the shares never took any steps to notify the Company officially or to have their names registered as shareholders. They claim, however, that as Lala Debi Datt was the Managing Director of the company and as he himself personally pledged these shares to them, the company must therefore be said to have had notice of the pledging of the shares, and that thereafter the company had no lien upon the shares in question. The liquidator claims th .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... ector, and under Article 90 of the Articles of Association it was provided that "Lala Debi Datt shall be the permanent Managing Director of the company under these articles, until such time as the said Lala Debi Datt resigns the office of his own accord ; he shall have all powers exercisable by the Directors of the company, either in management of the affairs of the company or in raising or borrowing any sum or sums of money for the purpose of the company, and he shall not be subject to retirement either by rotation or otherwise." It will thus be seen that peculiar and extensive powers were given to Lala Debi Datt by the articles of association. He was by no means an ordinary Managing Director. Further there is no doubt that he had know .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... he shareholder who holds that particular charge upon the shares, provided the money owing to the company has not subsequently been paid by Lala Debi Datt. The mortgagees of these shares propose to apply to the Court to have their names registered as the shareholders of the shares that are charged to them in place of Lala Debi Datt's name. When that is done and the court has ordered accordingly, the liquidator will pay to these shareholders their pro rata share of the surplus. There is one further point to be noted. One of these applications that of Gulab Rai Govind Ram, must be dismissed. The pledging transaction was carried out by Lala Debi Datt after the company went into liquidation. Section 227 of the Companies Act, therefore, appli .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X