ZAMIR AHMED RAZ Vs. D R BANAJI

JUDGEMENT

(1.) AN interesting and important question relating to Company Law arises on this appeal, and the facts that have to ho considered are few and simple. The appellants were appointed on 30-6-1951 as additional Directors of the company in liquidation of which the respondent is the Official Liquidator. The appellants attended two meetings of the Board of Directors on 3-7-1951 and 24-8-1951. On 24-8-1951 a petition was presented for winding up of the company and ultimately an order for winding up was made. On 27-6-1932 the list of con tributaries was settled and a certificate to that effect was issued on 4-2-1953. On 6-7-1956 the Respondent Liquidator applied to the learned Judge for placing the appellants on the list of contributaries. The learned Judge acceded to that application and the appellants have come in appeal.

(2.) UNDER Article 100 of the company, the qualification of a Director is laid down and that qualification is the holding of ordinary shares of the nominal value of Rs. 10,000/-, and the article goes on to state:

(3.) NOW, having dealt with our first impression, let us turn to the authorities and see what they have to say about it. We will first turn to Palmer's Company Precedents, but before we deal with this learned author it is necessary to state that prior to the English Companies Act of 1900 there was no provision in the Act for a director who did not acquire the qualification shares to vacate his office. It was only in 1900 that the English Companies Act made this provision which corresponds to the provision in our Act. With tin's background we will see what Palmer has got to say on this question. At page 579 Palmer sets out a clause of model Articles of Association which is 84a and that clause is very significant: