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TMI Blog1948 (1) TMI 17X X X X Extracts X X X X X X X X Extracts X X X X ..... same day obtained a stay order from Edgley, J. That order was in the following terms "And it is further ordered that until the final determination of this application or until the further order of this Court the commencement and/or continuation of all suits and proceedings against the said company, its directors and officers in the meantime be and the same are hereby stayed." On 13th July, 1947, the opposite party filed a complaint before the learned Chief Presidency Magistrate, Calcutta, charging the petitioners and one B. Majumdar with offences under sections 403, 406 and 409/114 of the Penal Code. The substance of his complaint was that he had a current account with the bank and the petitioners, as officers of the bank, had purchased a number of shares for him and on his instructions with money drawn from his current account. In spite, however, of repeated requests they had not delivered the shares to him, although under the contract between the parties the shares were liable to be delivered on demand. On this application being made, warrants were issued against the accused persons under section 409 of the Penal Code, and a search warrant was also issued for the seizure of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... him, the opposite party had simply kept certain shares with the bank in safe custody and having failed to obtain delivery of those shares was proceeding against the accused persons for criminal breach of trust. The shares never became a part of the assets of the bank and there could be no question of the opposite party participating in the distribution of the assets of the company or in any composition scheme on the footing that he was a creditor of the company as the depositor of the said shares. Mr. Talukdar contended further that although expressions might have been used in the petition of complaint here and there, charging the accused persons as bankers and agents, what had really been alleged was personal misconduct as individuals. It will be noticed from the terms of Edgley, J.'s order which has already been recited that it purports .to stay all proceedings, not merely against the company but also against its directors and officers. Section 153 (5) of the Companies Act speaks of proceedings against the company alone. Edgley, J., could not have intended to go beyond the terms of the section when he added the words "directors and officers." It was agreed before me by both the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... them in any manner whatsoever or have any lien thereon. The complainant proceeds to allege that he was informed by a letter dated 23rd October, 1946, that the bank had purchased for him twelve sets of shares and he found that the price had been debited to his account with the bank. He however failed to obtain delivery of the scares and on 3rd March, 1947, served a lawyer's letter in which he alleged that the bank was holding the shares in safe custody for him. That letter elicited a reply in which it was proposed that ten of the twelve sets of shares would be delivered to the complainant in three instalments. The complainant thereupon grew suspicious and wrote another letter dated 21st March, 1947, to which no reply had been received. On the above allegations the opposite party stated that the accused had been guilty of fraudulent conversion in complete violation of the trust and responsibility imposed on them as bankers and agents and that they had committed the offences specified in the petition of complaint. The question is what is the basis on which the complainant is making his case before the criminal Court. Is he alleging that, acting under his instructions, the Bank ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... could be said to be debtors of the opposite party or how he could be said to be their creditor, contingent or prospective. On those allegations the clear position is that he had left certain specified goods in the custody of the Bank merely for the purposes of custody and they never became a part of the assets of the Bank. Mr. Basu drew my attention to the case, In re Midland Coal, Coke and Iron Company [1895] 1 Ch. 267 at p. 275 where it was held that under section 158 of the English Companies Act of 1862, even a claim sounding only in damages was admissible in proof against a company and a just estimate was to be made so far as was possible of the value of the claim. That decision, in my view, does not take Mr. Basu very far. For one thing it is a decision under a specified section of the English Act concerned. For another, it is a decision which speaks of damages arising out of a breach of contract. It is fairly well settled that a winding up order cannot be obtained by a person, claiming unliquidated damages, and his proper course is to change the claim for damages into a judgment and thus make himself a creditor (See Halsbury's Laws of England, Hailsham Edition, Vol. V, pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Basu that the petition of complaint must be severely scanned in order to see whether every constituent part of the operations between the parties has been specifically pleaded. The complainant was not bound to plead evidence in the petition of complaint. It is perfectly clear that his petition, in at least a part of it, proceeds on the footing that the shares were actually purchased and the contract had been entered into with the petitioners as officers of the Bank. Unless such were his case, there could be no meaning in his asking repeatedly for the delivery of his shares. At the same time, the fact remains that the complainant has never been shown any shares or any transfer slips. It has not yet been found whether any specific shares were actually allotted to the opposite party in the books of the company. It is not known whether the representation made to the opposite party that certain shares had been purchased was true or false. It is quite possible that although the Bank told the opposite party that certain shares had been purchased none had in fact been purchased at all. On the other hand, it may be that although the complainant cannot point to any specific shares which ha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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