9911796707
TMI Blog1934 (7) TMI 11X X X X Extracts X X X X X X X X Extracts X X X X ..... est on the security of land, houses, machinery and other property situated in India and to invest money not immediately required upon such securities and Bank Deposits as may be from time to time determined." The Board of Directors of this company consists of Lala Harkishen Lal, Chairman, Mr. Shiv Dyal, Lala Duni Chand and the plaintiff-respondent himself. Mr. Gauba alleges that a considerable portion of the assets of the company in the shape of the life insurance fund are invested in the business undertakings controlled by the Chairman. He complains that several of these investments have been made by the Directors without adequate security contrary to the provisions of Clause ( d ) of Article 3 of the memorandum of association, and h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lf is the best judge of its affairs and the Court should not interfere. But here the main point involved is the interpretation of a certain clause in the memorandum of association relating to the application of the assets of the company. Such a question is not a matter of mere internal management. It is alleged that certain Directors whose good faith has not been questioned have misunderstood the clause in question and are in consequence acting ultra vires in their application of the funds of the company. Under these circumstances I have no doubt that a single member of the company can maintain a suit for a declaration as to the true construction of the article in question. I would refer in this connection to the observations by Brice o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e defendants must appear personally or by representation all the parties concerned in objecting to the suit. Consequently, there must be joined in the first place, the corporation itself; secondly, the governing body, or at least those of them who are implicated in the objectionable proceedings," the reason assigned being that the later are the persons who would be affected by the decree in the first instance. In this case it is clear that the Directors as the governing body are the persons mainly affected by the injunction, if issued, and as the Directors have not been personally impleaded it is doubtful whether the injunction in the form granted by the lower Court can be maintained. In any case it is to be noted that the plaintiff has n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urring in the second portion of Clause ( d ) must be interpreted according to the ejusdem generis rule, to denote the same form of securities as are required for advancing money at interest under the first portion of the clause, viz., the security of "land, houses and other property situated in India." In appeal Mr. Gauba does not support the application of the ejusdem generis rule to the interpretation of the word "securities" in this connection. His contention is that the advancing of money at interest is a transaction essentially different from that of investing money. He concedes that the securities that may be required in connection with the investing of money may be of a different kind from the securities required for advancing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such securities as they think fit. I do not agree with Mr. Badri Das that the point of difference between these two clauses should be confined to the length of time for which the money is to be tied up, whether advanced on loans or otherwise invested. If that were the true construction of the clause there would be no reason for the distinction clearly drawn in the clause between advancing money at interest and investing money. As Mr. Badri Das concedes, a loan is not the same thing as an investment and I am not prepared to interpret the clause as though the two terms were interchangeable. The question must be determined by the real nature of the transaction into which the Directors propose to enter. If the intention of the Directors is to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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