9911796707
TMI Blog1941 (8) TMI 16X X X X Extracts X X X X X X X X Extracts X X X X ..... the eleven years the company was operating, it never made a profit. Each year, in fact, showed a loss and long before the winding up order was passed, the company was in a precarious position. The appellant was a director of the company and was also its managing agent. The managing agents were stated to be K.C. Pandalai and Company, but it is common ground that the appellant is the sole proprietor of that firm. In 1936 the company owed the appellant a sum of Rs. 16,000. The appellant held 120 preference and 220 ordinary shares of Rs. 50 each in respect of which only Rs. 15 per share had been paid up. The appellants brother, Mr. K.S. Pandalai, was also a director of the company. He held some 200 shares and these also were only paid up to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellant purported to set off Rs. 11,900, out of the amount due to him from the company against what he owed in respect of the shares and consequently called upon the Registrar of Joint Stock Companies to record that his shares had been fully paid up. When the company went into liquidation the validity of this transaction was questioned by the Official Liquidator and he decided that the appellant should be placed on the list of contributories in respect of Rs. 11,900. The appellant objected and asked the Court to strike out his name from the list, but this Gentle, J., refused to do. The appellant as a director and the managing agent of the company was in a fiduciary position and in the circumstances the learned Judge held that he was not in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he best obtainable for the interest of the cestuis que trust, upon which subject no enquiry is permitted." When the case was before Gentle, J., it appears to have been accepted that the resolution of the 15th December, 1936, was validly passed. The only point taken by the Official Liquidator was that the appellant could not act upon the resolution in respect of his own shares. It is, however, manifest that the validity of the resolution is open to question. section 91-B (1) of the Indian Companies Act, as it stood at the time, read as follows: "No director shall, as a director, vote on any contract or arrangement in which he is either directly or indirectly concerned or interested; and if he does so vote, his vote shall not be counted ..... X X X X Extracts X X X X X X X X Extracts X X X X
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