1944 (8) TMI 11

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....JUDGMENT Leach, CJ. - The question in this appeal is whether Article 36 of the Limitation Act applies in the case of an action against the directors of a company for compensation for loss suffered as the result of a misleading prospectus. On 13th September, 1936, a prospectus was published in a local newspaper calling for subscriptions in respect of an issue of shares by a company called the Co....

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....for compensation. One of the directors entered into a compromise with the appellant but the others contested the suit. It was contended by the contesting defendants that the claim had been preferred out of time as the article which governed the claim against them was Article 36. The appellant persuaded the Principal Judge of the City Civil Court, who tried the suit, that the appropriate article w....

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....ially provided for." There is no article in the Limitation Act which specially provides for actions against a promoter or director of a company in respect of a false statement made in a prospectus. A person who is responsible for the issue of a false prospectus commits a tort and by reason of the provisions of section 100 of the Indian Companies Act is under a statutory liability to provide compen....