TMI Blog1949 (8) TMI 11X X X X Extracts X X X X X X X X Extracts X X X X ..... ct of the share brokerage, preliminary expenses and investments in unauthorised banks respectively...." The respondent having taken an assignment of the decree proceeded against the appellant in execution and applied to the Court for his arrest. The question arose whether under section 51 of the Civil Procedure Code the respondent was liable for arrest. He pleaded that he was a pauper and was quite unable to raise the money to discharge the decree. The Court however found that since he was a director and it was on account of his breach of duty that the loss had been sustained by the company, clause ( c ) of the proviso to section 51 applied, and "that the decree is for a sum for which the judgment-debtor was bound in fiduciary capacity to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e case in an attempt to prove to us that the appellant was in no way responsible for the loss that occurred; but we cannot, as the learned District Judge pertinently pointed out, go behind the decree itself. The judgment of this Court also shows that the appellant failed to do his duty. One of the earliest Indian cases that dealt with the duties of a Director towards the members of the company is New Fleming Spinning and Weaving Co., Ltd. v. Kessowji Naik [1885] ILR 9 Bom. 373, at p. 394 . The learned Judge said : "My conclusion is that, ( a ) although the directors are not trustees in every sense of the term, they stand in a fiduciary relation towards their shareholders with respect to the funds and the business placed in their c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a company is not that of trustee and cestui que trust. Although, as already stated, he is not an express trustee, yet he certainly occupies a fiduciary position with regard to the members of the company. It is next argued that even though a Director occupies a fiduciary position in relation to the members of a company, he is not liable to account to them. It seems to us that his liability to account flows from his fiduciary position, which requires him to hold the property of the company over which he has control for the benefit of the members of the company. If he holds the position of a trustee with regard to the members of the company, it means that the members of the company can call upon him to account for the property over which h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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