TaxTMI 
TaxTMI 
1946 (4) TMI 12
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....curity for its repayment, executed a premissory note. Digendra Nath Mukherji died in 1921, and two years later, the bank obtained a decree against his widow Jyoti Bala Devi and his two brothers. Successive attempts were made to realise the amount due under the decree, but these attempts proved infructuous. Eventually, the bank attached 48 fully paid-up shares which Digendra Nath Mukherji had held in it, and, at the ensuing sale, purchased them itself. This was on August 3, 1935. The name of Digendra Nath Mukherji continued, however, to be shown in the register of shareholders, the bank apparently realising soon after the sale that it had not been open to it to purchase them. On December 31, 1935, the secretary of the bank caused 43 out of t....
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....ned took place. The provisions of law which are applicable are section 55(1) of the Indian Companies Act, 1913 (Act VII of 1913), and regulation 8 of Table A in the first schedule to that Act. It is important to notice that article 1 of the articles of association of the bank states that:- "The regulations in Table A, in the first schedule of Act VII of 1913, in so far as they are not excluded or modified by these articles, shall also apply to the company in the same manner and to the same extent as if they were contained in these presents." Now, regulation 8 states:- "No part of the funds of the company shall be employed in the purchase of or in loans upon the security of the company's shares." It is thus quite clear that if the amount....
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....ercise of its right under article 30, as it omitted to issue notice on the legal representatives of Digendra Nath Mukherji and also as no resolution on the matter had been adopted at a meeting of the directors. It was not, however, essential that this matter should have been considered by the directors at a meeting. As to notice, it was, I think, obligatory on the company to give notice in writing to the legal representatives of Digendra Nath Mukherji in the manner required by regulation 10. Assuming, however, that this was not done, the sale would nevertheless be a valid sale. The concluding words in regulation 11 are:- "The purchaser shall be registered as the holder of the shares, and he shall not be bound to see to the application of t....