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TMI Blog1949 (8) TMI 25X X X X Extracts X X X X X X X X Extracts X X X X ..... time to time. The money so lent was placed by the company in a current account and later transferred to a fixed deposit account. These deposits were cashed in or renewed from time to time. The latest, on which the suit is based, was for the sum set out above and was made on 15-1-1940. It is evidenced by a fixed deposit receipt Ex. P-1. 4. We find this difficult to follow. If the Plaintiff was the company's banker then either the Plaintiff would lend money to the company as and when desired or, he would keep the company's money with him in his bank for the convenience of the company. If it was a case of the company keeping its money with the Plaintiff then the deposit would be by the company and not the Plaintiff, and the person entitled to sue for its return would be the company. If the deposit was made with money borrowed by the company from the Plaintiff then the Plaintiff's right would be to recover his loan. On the other hand, if the Plaintiff were depositing money with the company normally the company would be in the position of banker and not the Plaintiff. It is not easy to see how the Plaintiff was placing money with the company in fixed deposit in his capaci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e certain advances to the company but it says that these have 'all been repaid. But that apart, the Defendant contends that the borrowing was ultra vires. To determine this it will be necessary to look to the Memorandum and Articles of Association. 9. The objects of the company are there set out to be to gin and press cotton. In Order to achieve these objects the company is given power either to purchase ginned or unginned cotton (Clause 3(e)) or: to give money for the purchase of goods...or other articles required for all or any of the above works of the company or to give money as advance for the said goods. (Clause 3(1)). And in order to be able to give the money for this purpose the company is authorized: to borrow money...receipts passed for or by opening a current account in the creditors' shop...or in any other way. (Clause 3(h)). 10. We hold on this that the company was authorised to borrow money for the purpose of advancing it to traders. 11. The next question is whether it could borrow from one of its own directors. It is admitted that the Plaintiff was the managing director at the date of the deposit in suit. The law as to this is set out in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... demand, are not governed by this article. Article 115 may apply to such deposits where on expiry of the term the amount would become payable as money lent. We hold, therefore, that the limitation was three years commencing from 31-7-1940. As the suit was filed on 16-6-1944 it is prima facie barred by time. 15. The plaint relies on the following matters for saving limitation: (1) an acknowledgment contained in Ex. P-42, a resolution of the Board of Directors dated 20-5-1941; (2) the Company's balance sheets for 1940/41 and 1941/42 and 1942/43; (3) an application by the Plaintiff for liquidation made under Section 162, Companies Act. The Plaintiff contends that Section 14, Limitation Act is called into play and saves limitation. The fourth ground set out in the plaint was abandoned before us. 16. Considering Ex. P-42 first. That does not save limitation for two reasons. The first is that it is not an acknowledgment of liability. One Pandurang Hadole informed the Board of Directors that a sum of ₹ 67,939 was due to the Plaintiff in July 1936 and that the directors had offered to settle the debt for ₹ 65,000. The Plaintiff was again told to make a choice so tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le. It was argued that this falls under Clause (e) when the original is a public document within the moaning of Section 74 because Section 74 states that the following are public documents, namely, (2) public records kept in British India of private documents . The argument is not well founded. Section 65 applies Section 74 only when the original is a public document. It would, for example be absurd to contend that a private sale-deed or mortgage can be proved by the production of a certified copy obtained from the Sub-Registrar's office and nothing more. 22. We suspect these copies were produced at a late stage of the case on purpose and consider that the objection to the admissibility of these copies is not a mere technicality. 23. It will be recollected that a directors' meeting was called for 27-4-1941 (Ex. D-88) and that all that was done on that day was to accept the Plaintiff's resignation as Chairman and appoint another in his place. Thereupon, a second meeting was called for 17-5-1941 (Ex. 89) and had to be adjourned for want of a quorum. The adjourned meeting was held on 20-5-1941 (EX. P. 42) but no balance sheet was passed. Thereupon a general meetin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... estion of limitation we omitted by a slip to give a decision on the arguments advanced regarding Section 14, Limitation Act. The contention was that the Plaintiff made an application to the Court under the Indian Companies Act for liquidation on 16-6-1941. This was dismissed on 16-6-1844. He contends that that proceeding was founded upon the same cause of action. With that we do not agree. 27. In the first place the liquidation proceedings have not been filed. We have before us. All we have is an admission of the Defendant when called upon to admit facts that an application for liquidation was made on 16-6-1944 and that the Defendants in the liquidation proceedings as well as here are the same. There is no admission that the cause of action is the same. They were called upon to admit that fact but did not do so. It was, therefore, incumbent on the Plaintiff to prove it if he wished to rely on that for bringing his claim within limitation. 28. The grounds on which a company can be wound up are set out in Section 162, Companies Act. There are a number of them. Even if it be assumed that the application was under Section 162(v), namely, that the company was unable to pay its deb ..... X X X X Extracts X X X X X X X X Extracts X X X X
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