9911796707
TMI Blog1938 (5) TMI 8X X X X Extracts X X X X X X X X Extracts X X X X ..... emorandum and articles of association and on 27th May 1930 published under their signatures the prospectus, whereby they invited the public to purchase shares of the bank; and that the necessary certificate from the Registrar, Joint Stock Companies, Lucknow, was obtained on 6th August 1930 by fraud, although prior to that they had commenced working and had been selling and allotting shares. It was alleged that the prospectus contained false and misleading matter. Further, it was alleged that the defendants appointed Harbans Lal of Khushab as Superintendent of the Punjab branches of the bank and also appointed him as their agent to open a branch at Chakwal and that the plaintiff believed the fraudulent and misleading assertions of Harbans La ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 28th October 1930, 24th November 1930 and in January 1935 at Chakwal. Accordingly the plaintiff brought the present suit. The plaintiff omitted to state in the plaint that he himself was a joint tortfeasor along with the defendants. Misfeasance proceedings were also taken against him in the Allahabad High Court where he compromised on payment of Rs. 10,000. His statement in the Allahabad High Court shows that he also committed fraud and misfeasance. He wrote applications and pronotes for his friend Sita Ram to whom payment was made without any security whereas the plaintiff knew that Sita Ram was practically insolvent. It may be mentioned here that the plaintiff was a local director of the Bank at Chakwal. Obviously the plaintiff was us ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mitation as there were numerous authorities to the effect that directors were not trustees. Further, the plaintiff knew what was going on at the end of 1931 when he himself went to Allahabad in connexion with the liquidation proceedings. There was no question therefore of his coming to know about fraud and misfeasance early in 1935 after the Allahabad High Court's judgment in 1934. It was contended before us that a separate suit lay as well as proceedings under Section 235, Companies Act. The plaintiff has based his cause of action on Section 100, Companies Act and there is no question that any liability under that section has to be decided by the Court having jurisdiction under the Companies Act and it has been so decided. The law on thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s motive for joining the company not being the false representation of the directors but his own greed to acquire money dishonestly. The suit is also barred by limitation which under Article 36 is two years from the date of malfeasance, misfeasance or non-feasance. If there was any malfeasance, etc., it took place in 1930. Section 18, Limitation Act cannot help the plaintiff as he was not by means of fraud kept from the knowledge of his right or the title on which it was founded. His action may be based on fraud but it is not established that the knowledge of his right was kept from him by means of fraud. He himself was as fraudulent as anyone else. The suit is thus long time-barred. It may here be mentioned that defendant 2, Nawab Jamshed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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