9911796707
TMI Blog1966 (1) TMI 44X X X X Extracts X X X X X X X X Extracts X X X X ..... of the first defendant company in favour of the plaintiff in 1953. The simple facts of the action, as stated in the plaint, were that the properties of the plaint schedule belonged to the plaintiff and the second defendant, and that the plaintiff sold the land to the first defendant firm for the construction of a cinema theatre for an amount of Rs. 37,500. Out of this amount, an amount of Rs. 20,093-0-6 was due, and the eight directors of the first defendant firm jointly executed the suit negotiable instrument in favour of the plaintiff for that sum. The action could be viewed as a suit simpliciter upon a promissory note, and also as one to enforce the vendor's lien in respect of the unpaid purchase money, for the plaintiff specifically ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the consideration of Rs. 20,093-0-6 on the promissory note was not a figure arrived at, on a proper settlement of accounts between the parties, and that, unless such a settlement is made, the plaintiff cannot enforce the claim. There are also certain other technical defences, which we shall note a little later. The learned subordinate judge, after referring to the evidence at some length, has dismissed the suit with costs of the first defendant. His reasons are (1) that the managing agents (plaintiff and second defendant) had played a fraud upon the company, and that the suit promissory note was not enforceable for that reason. The proper remedy of the plaintiff was to file a suit for rendition of accounts. (2) The plaintiff cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Sri Desikan) is conscious that the reasoning of the learned judge on this aspect of the matter may not be sustainable. He has therefore sought to argue that the pleadings and the evidence ought to be interpreted in a different way, viz. , as affording a basis for bringing the defence within the third proviso to section 92 of the Indian Evidence Act. In other words, we must spell out some antecedent agreement between the parties, not directly repugnant to the terms of the sale deed or of the promissory note, to the effect that the claim for the unpaid purchase money, or the claim in the promissory note in which it is embodied, will not be enforceable until accounts are finally rendered between the parties. Unfortunately for the first de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 I.C. 890 . The technical arguments based upon certain sections of the Companies Act, VII of 1913, appear to be totally without foundation. Actually, the learned judge appears to have misconceived the scope of section 90 of that 1 Act, which has nothing to do with the execution of a promissory note by the directors of a company for any sum representing unpaid purchase money upon a transaction of sale in favour of the company. The relevant provision would be section 89 of the same Act, and it is indisputable that all the other directors except the plaintiff were parties to the document. The seal of the company was not required, and that does not invalidate the transaction. Again, section 91B has no application to the present facts. Even ..... X X X X Extracts X X X X X X X X Extracts X X X X
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