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TMI Blog1951 (9) TMI 23X X X X Extracts X X X X X X X X Extracts X X X X ..... strict Judge, Ludhiana, who appointed Shri Krishan Kant Jain, an Advocate of Ludhiana, as the Official Liquidator. On 10th January, 1950, Amrit Rai Sood made an application to the Official Liquidator praying that his claim be admitted. In this application he alleged that he had advanced to the company a sum of rupees one lac fifty thousand, and under the agreement under which he had lent the money he was entitled to receive the uncalled capital of the company to the extent of Rs. 1,17,600. In his prayer clause he said that his claim was to the extent of rupees one lac according to clause No. 10 of the agreement which he asked to be admitted and payment made to him after realization of the call- money. Atma Ram Sahni filed his objection to this application on 20th February, 1950. In this he pleaded that the debt of Amrit Rai Sood had been discharged by his taking the film 'Aaj Aur Kal' and other assets of the company, and therefore he prayed that the claim of Amrit Rai Sood for one lac of rupees should be disallowed. The liquidator went into the evidence and made a report to the District Judge. Upon this the learned District Judge ordered that Amrit Rai Sood, the petitioner, had a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is partly completed and the production cannot be carried forward for want of finances for a day even beyond the scheduled programme above the amount of Rs. 1,50,000 the company shall immediately arrange for finances in order to complete the picture and if the company is unable to arrange for the said finances to complete the picture, the financier shall forfeit the picture to himself and shall complete the picture jointly with L. Daulat Ram of Pathankot. In that case the company shall have no lien whatsoever over the picture or its profits but the commitments already made by the company with Nishat Theatres Ltd. and with Shorey Pictures for studio hire shall be binding on and be honoured by the financier and no further commitments can be made without the written approval of the financier. 10. In case the company fails to fulfil any one of the conditions herein above given for any reason whatsoever the financier shall have the right to call the uncalled liability of one lac of the shares and forfeit the same to himself. This penalty shall in no way have any effect on the penalty provided in Clauses 7 and 8, supra. A list of shareholders has been furnished to the financier." On ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x gratia concession and in consideration of the company's investment he may be requested for further ex gratia concession he may be pleased to allow to the company." There is evidence to show that this resolution was unanimously carried on 12th April, 1947. Khushi Ram who had been appointed by the letter, which I have referred to above, by his son Amrit Rai Sood as his representative, gave a receipt in the following terms : "Received from Chitra Productions Ltd., through Mr. Lalchand the following : 1.Picture "Aaj Aur Kal" and raw material in the process of ompilation. 2.Assets of the company consisting of: (1)Ford Station Wagon (one). (2)Stationery with one duplicator machine. (3)Furniture and property concerning picture. (4)Office furniture consisting of one table and 3 chairs. In consideration of the ex gratia release of uncalled capital to the extent of about 50 (fifty) thousand. 3.Copies of the resolution of the company duly attested. Dated 12th April, 1947. for Amrit Rai Sood, Financier. Sd. Khushi Ram." On 21st April, 1947, Amrit Rai Sood wrote a letter to the company saying that as he had taken possession of the picture "Aaj Aur Kal", inti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ued, and Article 36 of Bowsteads's Law of Agency, in my opinion, correctly lays down the limits of this authority. This has received the approval of this court in Pritam Singh v. Intizamia Committee Gurdwara Harimandir Sahib. The law is expressed in the following terms in Bowstead at page 49: ''Powers of attorney must be strictly pursued, and are construed as giving only such authority as they confer expressly or by necessary implication. The following are the most important rules of construction. 1The operative part of the deed is controlled by the recitals. 2Where authority is given to do particular acts, followed by general words, the general words are restricted to what is necessary for the proper performance of the particular acts. 3General words do not confer general powers, but are limited to the purpose for which the authority is given, and are construed as enlarging the special powers only when necessary for that purpose. 4The deed must be construed so as to include all medium powers necessary for its effective execution." In Midland Bank Ltd. v. Reckilt, Sir Harold Reckitt had given a power of attorney in favour of Lord Terrington the head of a firm of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... privileges conferred by an indenture of partnership constituting the firm of B.W. Co. and generally to do, execute, and perform any other act, deed, matter, or thing whatsoever in or about my concerns, engagements and business of every nature and kind whatsoever." It was held that the former words restrained the generality of the latter words, and consequently A could not under this power execute a deed in principal's name dissolving the partnership of B.W. Co. and assigning over principal's share of the partnership property. In Mt. Jan v. Fajjan, a power of attorney was executed in favour of B entrusting him with the management of the principal's property. Power to mortgage and sell the property was also mentioned in the deed. The attorney sold the property although there was no necessity of the sale for the purpose of the management of the property, and it was held by Bhide J. that the attorney was authorised to sell the property when it was necessary for the purpose of the management of the property and that the sale could not be upheld as there was no necessity for the sale. Applying these principles to the facts of the present case, the agreement of the 8th Febru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Aur Kal". It would not ratify the other portions of the receipt by virtue of which the appellant claims that Amrit Rai Sood's agent had given up his claim on the uncalled capital of the company, even though an ex gratia satisfaction may in law be binding if given under proper authority. There is a further objection taken to this ex gratia satisfaction by counsel for the respondent who submits that in accordance with the agreement Amrit Rai Sood was entitled to uncalled capital amounting to about Rs. 1,00,000 and what was given up by this receipt was only a liability of Rs. 50,000. In my opinion the letter of Amrit Rai Sood dated the 21st April, 1947, does not amount to ratification. There is a further point which arises from the facts and that is that the company was brought into liquidation at the instance of Amrit Rai Sood who in his petition had definitely alleged that he was a creditor of the company to the extent of Rs. 1,50,000. If satisfaction had already been entered in regard to this claim the company should at that time have objected to the right of Amrit Rai Sood to bring this application. Under section 162 of the Indian Companies Act only a creditor to whom a su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n execution proceeding that where an order for sale is passed after notice to the judgment-debtor without any objection being raised by him as to the question of saleability the judgment-debtor is precluded from raising that question and impugning the sale on any ground which he might and ought to have taken before the sale. This supports the submission that as the appellants did not raise the question whether Amrit Rai Sood was or was not the creditor, he cannot now be allowed to raise that question. That the principle of res judicaia applies outside section 11 of the Civil Procedure Code was held both in Hook v. Administrator-General of Bengal, and in T.B. Ram Chandra Rao v. A.N.S. Ramachandra Rao, where the case was one under Land Acquisition Act and where it was held that in a dispute as to title to receive compensation which has been referred to the Court a decree thereon not appealed from renders the question of title res judicata in a suit between the parties to the dispute. At page 331, Lord Buck-master observed as follows : "It has been suggested that the decision was not in a former suit, but whether this were so or not makes no difference for it has been r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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