TaxTMI 
TaxTMI 
1938 (5) TMI 8
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....n 27th May 1930 published under their signatures the prospectus, whereby they invited the public to purchase shares of the bank; and that the necessary certificate from the Registrar, Joint Stock Companies, Lucknow, was obtained on 6th August 1930 by fraud, although prior to that they had commenced working and had been selling and allotting shares. It was alleged that the prospectus contained false and misleading matter. Further, it was alleged that the defendants appointed Harbans Lal of Khushab as Superintendent of the Punjab branches of the bank and also appointed him as their agent to open a branch at Chakwal and that the plaintiff believed the fraudulent and misleading assertions of Harbans Lal and considered the prospectus to be a tru....
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.... in January 1935 at Chakwal. Accordingly the plaintiff brought the present suit. The plaintiff omitted to state in the plaint that he himself was a joint tortfeasor along with the defendants. Misfeasance proceedings were also taken against him in the Allahabad High Court where he compromised on payment of Rs. 10,000. His statement in the Allahabad High Court shows that he also committed fraud and misfeasance. He wrote applications and pronotes for his friend Sita Ram to whom payment was made without any security whereas the plaintiff knew that Sita Ram was practically insolvent. It may be mentioned here that the plaintiff was a local director of the Bank at Chakwal. Obviously the plaintiff was using the branch at Chakwal and Dudial for his....
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....e effect that directors were not trustees. Further, the plaintiff knew what was going on at the end of 1931 when he himself went to Allahabad in connexion with the liquidation proceedings. There was no question therefore of his coming to know about fraud and misfeasance early in 1935 after the Allahabad High Court's judgment in 1934. It was contended before us that a separate suit lay as well as proceedings under Section 235, Companies Act. The plaintiff has based his cause of action on Section 100, Companies Act and there is no question that any liability under that section has to be decided by the Court having jurisdiction under the Companies Act and it has been so decided. The law on this point is clearly stated at p. 216 of Palmer's Co....