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TMI Blog1968 (3) TMI 57X X X X Extracts X X X X X X X X Extracts X X X X ..... n the net profits of the defendant to be computed in the manner laid down under sections 348 and 350 of the Companies Act, 1956, subject to a minimum remuneration of Rs. 50,000. The plaintiff states that according to computations in the manner laid down in the said provisions of the Companies Act, the profit of the defendant for the year ending on March 31, 1966 was Rs. 7,48,362. The defendant, according to the plaintiff, in terms of the managing agency agreement is liable to pay to the plaintiff a remuneration for the said year amounting to Rs. 65,551 The defendant paid to the plaintiff the sum of Rs. 50,000 only being the minimum remuneration and did not pay the balance of Rs. 15,551. In this suit the plaintiff claims a decree for the sai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly stood ran thus : "349. (4) In making the computations aforesaid, the following sums shall be deducted : (1) the loss (not including any loss of a capital nature) incurred in any year which begins at or after the commencement of this Act, in so far as it has not been taken into account in arriving at the net profits of that year or any subsequent year preceding the year in respect of which the net profits have to be ascertained". After the Amendment Act of 1960 these provisions run thus: "In making the computation aforesaid, the following sums shall be deducted : (1) the excess of expenditure over income, which had arisen in computing the net profits in accordance with this section in any year which begins at or after the comm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... loss but a deduction of the excess of expenditure over income ; this excess is also related to the current year's working and accounts and a preceding year's accounts may be taken into consideration only in so far as the excess has not been deducted in any subsequent year. In other words, if there is an unadjusted excess of a previous year, section 349(4)(1) is attracted to it. But when there is no such unadjusted excess this clause has no application. And in this event, it is common case that in the relevant year there was no unadjusted "excess". My construction of section 349(4)(1) can be supported from another point of view : in this clause it is expressly provided that deduction is permissible only of the excess which has not been ded ..... X X X X Extracts X X X X X X X X Extracts X X X X
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