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TMI Blog2021 (6) TMI 587X X X X Extracts X X X X X X X X Extracts X X X X ..... 00/- on 11.03.1993 as security deposit. On 23.08.1993, they paid a further sum of Rs. 30,000/-. Even though the defendant continued to draw water from the plaintiff's well, no further amount was paid. The defendant owed to pay a total sum of Rs. 1,90,000/- by way of arrears. Since the said amount remained unpaid even after the repeated demands, the plaintiff instituted the aforesaid suit. 3.The defendant denied the plaint allegations. The defendant claimed that the amount of Rs. 35,000/- paid by the defendant in March 1993 represented advance amount for purchase of the land on which the well is situated. The defendant would further claim that the well was dug by the defendant only. The defendant denied that they had agreed to pay a sum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... decree of the lower Appellate Court dismissing the appellant's suit as barred by limitation are correct and sustainable, since the appellant's case is that the respondent owes to her the cost of the water lifter during the period from 11.03.1993 and 11.06.1999 minus Rs. 35,000/- already paid, and the suit was filed on 13.08.1999? 3.Whether the Judgment and decree of the lower appellate Court are correct and sustainable, since the suit claim is not for arrears of rent and hence, Article 52 of the Limitation Act is inapplicable to the case?" 5.Heard the learned counsel on either side. 6.The learned counsel appearing for the appellant submitted that the First Appellate Court erred in reversing the well considered decision of the t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment is enforceable against the defendant company in view of the provisions under Section 297 of Companies Act? (2) Whether the suit is barred by limitation? 9.The Appellate Court answered both the issues in favour of the defendant and non suited the plaintiff. The Appellate Court rendered a finding that there was a oral agreement between the parties as regards the lifting of water from the suit well. The only question that arises for determination is whether such an agreement can be enforced against the defendant. To answer the said question, it is necessary to have a look at Section 46 and Section 297 of the Companies Act, 1956. The said provisions read as under:- 46.Form of contract: (1) Contracts on behalf of a company may be made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s approval of the Central Government) (2) Nothing contained in clause(a) of sub-section (1) shall affect (a) the purchase of goods and materials from the company, or the sale of goods and materials to the company, by any director, relative, firm, partner, private company as aforesaid for cash at prevailing market prices; or (b) any contract or contracts between the company on one side and any such director, relative, firm, partner or private company on the other for sale, purchase or supply of any goods, materials and services in which either the company or the director, relative, firm, partner or private company, as the case may be, regularly trades or does business: (c) in the case of a banking or insurance company any transaction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies (Amendment) Act, 1960. 10.No statutory provision can be read or understood in isolation. Section 46 of the Act must be read along with Section 297 of the Companies Act. It has been established in evidence that the defendant company was having paid-up capital of not less than one crore. Therefore, the prior approval of the central government was required for entering into a contract, in which, the director of the company or his relative is having an interest. The suit well belongs to the appellant Subahani and her brother Mohammed Thasthakir was the managing director of the defendant company. Therefore, two conditions will have to be fulfilled. Firstly, the consent of the board of directors was required. Without such consent, the contr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and Ex.A2 acknowledgment card, the plaintiff sent legal notice dated 31.01.1996 calling upon the defendant company to pay a sum of Rs. 69,000/- towards the cost of water and Rs. 500/- being the cost of notice. The suit is filed in the year 1999 claiming the rent for lifting of water for the period from 11.03.1993 to 11.06.1999 for six years, three months after deducting Rs. 35,000/- given by the defendant company. So, it is clear that the suit is filed after the lapse of three years on which the rent for lifting of water become due from the defendant company. In the plaint, it has been stated that because of the suits filed by the defendant in O.S.No.39/96 for permanent injunction and O.S.No.115/97 for specific performance, the right of cla ..... X X X X Extracts X X X X X X X X Extracts X X X X
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