Promoter status: mere subscription and share dealing do not establish promoter or officer status; Section 235 recovery denied.

Section 235 of the Indian Companies Act applies only to persons who took part in formation or promotion of the company or to past or present directors, managers, liquidators or officers; mere subscription to the memorandum and later sale of shares does not establish promotion absent evidence of originating the scheme, preparing constitutional documents or controlling management. A broker appointed simply to deal in the company's shares and not participating in management is not an "officer" for section 235 purposes. Consequently the official liquidator cannot recover sums from such brokers under section 235, and the claim is denied on the merits.

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Issues: Whether the official liquidator was entitled to recover sums paid to the brokers under Section 235 of the Indian Companies Act, 1913 by treating the brokers as promoters or officers of the company.

Analysis: Section 235 applies only to persons who have taken part in the formation or promotion of the company or to past or present directors, managers, liquidators or officers. Definitions and authorities on the meaning of "promoter" show that mere signing of the memorandum as a subscriber and taking shares is insufficient to establish promotion absent evidence of taking steps to originate, form or set the company going. The facts show the brokers merely subscribed and later sold shares; there is no evidence they originated the scheme, prepared constitutional documents or controlled selection of directors. Precedent and comparison with other professional service providers indicate that an appointed broker, whose duties are confined to dealing in the company's shares and who does not participate in management, is not an "officer" of the company within the meaning of section 235. Although limitation questions were argued below, the court did not need to decide them because section 235 could not be invoked against the respondents on the merits.

Conclusion: The official liquidator is not entitled to invoke Section 235 of the Indian Companies Act, 1913 against the respondents; the respondents are neither promoters nor officers for the purposes of Section 235. The claim under Section 235 is therefore denied (in favour of Respondent).

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