Outstanding forward contracts remain enforceable unless a prohibitory notification clearly voids them; corporate resolutions and winding up claims also failed.

A prohibitory notification will not nullify outstanding forward contracts unless it expressly or by necessary implication does so; existing futures in gur therefore remained enforceable. Corporate resolutions authorising and later settling the transactions were upheld because later-discovered director disqualification did not invalidate acts protected by the articles and incorporated Table A, and the interested-director objection was not established on the facts. Frustration was not made out because settlement of the contracts remained legally possible, and the company's substratum had not disappeared merely because one line of business was restricted. No basis for just and equitable winding up was shown.

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Issues: (i) Whether the Government notification and amended prohibition order rendered outstanding forward contracts in gur void or unenforceable; (ii) whether the resolution authorising forward transactions and the later settlement resolution were invalid because of director disqualification, lack of quorum, or breach of the statutory restrictions on interested directors; (iii) whether the contracts were frustrated or the company's substratum had disappeared so as to justify winding up.

Issue (i): Whether the Government notification and amended prohibition order rendered outstanding forward contracts in gur void or unenforceable.

Analysis: The prohibition operated prospectively against fresh transactions in futures and against margins connected with such future transactions. The order expressly invalidated outstanding options, but it did not contain a corresponding provision voiding outstanding futures. The language of the order and the contrast between futures and options showed that existing futures were not struck down, and settlement of outstanding contracts was not prohibited.

Conclusion: The outstanding forward contracts did not become void or unenforceable.

Issue (ii): Whether the resolution authorising forward transactions and the later settlement resolution were invalid because of director disqualification, lack of quorum, or breach of the statutory restrictions on interested directors.

Analysis: The articles of association and the incorporated Table A regulation protected acts done by directors even if some of them were later found disqualified. The general resolution authorising the business was therefore not invalidated by subsequent discovery of disqualification. The interested-director prohibition was not attracted in the manner suggested, and the later settlement resolution was passed as a business measure to protect the company and its members after the Government restrictions made the ordinary mode of dealing ineffective. The resolution fixed a settlement rate; it did not amount to repudiation of the contracts or an abuse of power.

Conclusion: The resolutions were valid and no illegal or fraudulent conduct by the directors was established.

Issue (iii): Whether the contracts were frustrated or the company's substratum had disappeared so as to justify winding up.

Analysis: Frustration was not made out because the outstanding contracts remained capable of settlement, either by payment of differences or by delivery, and the Government measures did not make performance legally impossible within the meaning of the Contract Act. The company was formed to carry on business in several commodities, possessed assets, and was not shown to be unable to pay its debts. The statutory test of just and equitable winding up was not satisfied merely because one line of business had been curtailed or the business had temporarily come to a standstill.

Conclusion: There was no frustration and no ground for winding up on disappearance of substratum.

Final Conclusion: The appeals failed because the impugned contracts remained valid, the directors' resolutions stood, and no case for winding up the company was established.

Ratio Decidendi: A prohibitory notification will not be construed to nullify outstanding contracts unless it expressly or by necessary implication does so; corporate acts done under an incorporated validating regulation are not invalidated merely because some directors were later found disqualified; and winding up on the just and equitable ground requires proof that the company's substratum has truly failed or that performance has become legally impossible.

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