C SUNDARARAJA PILLAI Vs. SAKTHI TALKIES DINDIGUL LTD

JUDGEMENT

(1.) THE appellant is the plaintiff in a suit for recovery of an amount of Rs. 24,865,59 from the first defendant, Sakthi Talkies Ltd. Dindigul, alleged to be due on a promissory note executed by the eight directors of the first defendant company in favour of the plaintiff in 1953. The simple facts of the action, as stated in the plaint, were that the properties of the plaint schedule belonged to the plaintiff and the second defendant, and that the plaintiff sold the land to the first defendant firm for the construction of a cinema theatre, for an amount of Rs. 37,500. Out of this amount, an amount of Rs. 20,093-0-6 was due, and the eight directors of the first defendant firm jointly executed the suit negotiable instrument in favour of the plaintiff for that sum.

(2.) THE action could be viewed as a suit simpliciter upon a promissory note, and also as one to enforce the vendor's lien in respect of the unpaid purchase money; for the plaintiff specifically prayed for a charge on the property, and for the sale of the site in realisation of the claim, under Section 55 (4) of the Transfer of Property act. The second defendant was impleaded as a party entitled, along with the plaintiff, to a moiety of the amount.

(3.) WE are now concerned with the defences on which this claim was resisted by the first defendant firm, particularly in the additional written statement of that firm. These defences could be tersely set forth as follows. The plaintiff and second defendant were partners of a firm of managing agents of the first defendant company and the plaintiff was also one of the directors of the firm. There was mismanagement by the Managing Agents, and the plaintiff was in the advantageous position of the possession of the account books, without a proper audit having been accomplished. It is conceded that the directors were anxious to purchase the site, for the construction of the theatre, and there are resolutions both of the General Body and the Board of directors, approving that proposal. It was then found that, according to the plaintiff, he had taken a sum of Rs. 17406-15-6 from the funds; it is alleged that several directors felt that much larger sums might have been taken by the plaintiff, and might be due from him. But this sum of Rs. 17406 odd was tentatively accepted, as the amount due from the plaintiff, and the promissory note for the balance was executed as alleged in the plaint, in the wake of the sale deed. The defence is that the consideration of rs. 20,093-0-6 on the promissory note was not a figure arrived at, on a proper settlement of accounts between the parties, and that, unless such a settlement is made, the plaintiff cannot enforce the claim. There are also certain other technical defences, which we shall note a little later.