9911796707
TMI Blog1986 (11) TMI 327X X X X Extracts X X X X X X X X Extracts X X X X ..... s. 50,501.77 against the appellant and respondent No. 2, a limited company of which the appellant was the managing director, in October, 1974. When the decree was put to execution and the decree-holder proceeded against the personal properties of the appellant-managing director ; he filed an objection under section 47 of the Code of Civil Procedure challenging his liability in his personal capacity. The executing court upheld the objection, but, on appeal by the decree-holder, a learned single judge of this court rejected the objection of the appellant. The relevant facts may now be briefly stated. The appellant, as the managing director of the judgment debtor-company (defendant No. 1), placed orders with the decree-holder for supply ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the entire judgment as to whether the appellant, as the managing director of the company, was liable in his personal capacity as well. In the operative portion of the judgment, while passing the decree for Rs. 50,401.77, it is stated: "...Both the defendants are jointly and severally liable to pay the aforesaid amount to the plaintiff..." The suit by the appellant against the company and the decree-holder was, however, dismissed. The executing court, as already stated, allowed the objection of the appellant and held that the appellant, having been impleaded only in the capacity of the managing director, was not personally liable for satisfaction of the decretal dues and that his personal properties could not be attached in the e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r under section 47, Civil Procedure Code, to construe a decree in order to ascertain its precise meaning, acting, however, within its well-known limitations. As there is no general rule for construing decrees, each case must depend upon its own facts. A general direction making the defendants "jointly and severally" liable no doubt prima facie imposes a personal liability on all the defendants, but the above words are not conclusive of the question and empower the executing court to construe the decree and in case of doubt, benefit must be given to the judgment debtor in this regard. I have deliberately referred to the allegations made by the decree-holder against the appellant in the plaint as well as the findings in the judgment to find ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tors may be made personally liable by order of the court only if they are found guilty of fraudulent trading, i.e. , an act of misfeasance or the like. Directors are not liable for breach of contracts by the company and the other party to a contract cannot make them directly liable by suing them in tort even for their mismanagement of the company's affairs. The liability of the directors even in common law is confined only where they have been guilty of a tort towards the creditors as well as breach of duty owed to the company. Consequently, directors are personally liable to persons who lend money to the company only if they obtain the loan by fraudulent misrepresentations. It is, therefore, obvious that directors are generally immune fro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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