9911796707
TMI Blog1937 (9) TMI 5X X X X Extracts X X X X X X X X Extracts X X X X ..... 1927, with a nominal capital of Rs. 5,00,000 divided into 50,000 shares of Rs. 10 each, of which 40,500 were preferred and 9,500 ordinary shares. The certificate permitting the company to carry on the business was issued by the Registrar of Joint Stock Companies on the 1st August, 1927. The company was unsuccessful in its operations and went into voluntary liquidation on the nth December, 1930. The voluntary liquidation was turned into a compulsory liquidation by an order of this Court, dated 13th October, 1932. The official liquidator sought to make the respondents liable to repay a sum of Rs. 8,865-11-3, which they had received as shareholders of the company. The respondents are partners of a firm of provision dealers carrying on busines ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, however, concerned with the liability of the directors in this respect. The amount paid to the respondents was, as I have already indicated, the sum of Rs. 8,865-11-3 which the official liquidator desired to recover from them on the ground that the agreement was ultra vires. Accordingly he took out a summons under section 235 of the Indian Companies Act, 1913, and the matter in due course came before Stone J., who referred the question of what was due under the agreement to the Official Referee. After holding an enquiry the Official Referee reported that the respondents were not entitled to retain the Rs. 8,865-11-3. The Official Referee's report came before Gentle J., when it was contended on behalf of the respondents that all remed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her definitions have been given by learned judges from time to time, but it is impossible to define accurately what is meant by the word "promoter." The difficulty is discussed at length by the learned author of Palmer's Company Precedents at pages 103 to 109. After referring to a number of the more prominent cases the learned author observes at page 106: "It is obvious, therefore, that a person who originates the scheme for the formation of the company, has the memorandum and articles prepared, executed and registered and finds the first directors, settles the terms (if any), and makes arrangements for advertising and circulating the prospectus and placing the capital, is emphatically a promoter in the fullest sense. He controls the form ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that he had anything to do with the drawing up of the memorandum and articles of association. There is no suggestion that the first respondent had anything to do with the selection of the directors or the settlement of any contract, except the contract under which his firm was to act as brokers. After the Company had been formed and had started business, the first respondent's firm induced certain people to subscribe for shares, but it is not alleged that they did anything before the company was launched. The minimum subscription was fixed at 500 shares and the signatories to the memorandum of association themselves subscribed for 1,200 shares. In the memorandum of association the only persons referred to as promoters are V.K. Lakshmana M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmons against the first respondent on the ground that he was a promoter. Can the respondents be deemed to be officers of the company? section 2 of the Act defines the word "Officer" as including "any director, manager or secretary but, save in sections 235,236, and 237, does not include an auditor ". The definition is therefore not exhaustive. The inclusion of the auditor for the purposes of sections 235, 236 and 237 follows the course adopted in England and avoids the discussion which had taken place in the courts there with regard to the position of the auditor. But it does not follow because the auditor is an officer for the purposes of section 235 the company's share-broker is in the same position. In in re The Liberator Permanent ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
