ALBERT JUDAH JUDAH Vs. RAMPADA GUPTA

JUDGEMENT

(1.) This is a suit in which the plaintiff seeks to establish his title to a bunch of 26752 ordinary shares in the defendant company. The Company and one Ramapada Gupta in whose name the shares are registered in the books of the company have been impleaded as defendants.

(2.) The plaintiff who was born in Iraq came over to India some years prior to 1938 and started business in medicine first under the name and style of Albert David Bros, and then of Albert David and Co. In 1938 the plaintiff promoted a private company which in 1948 was converted into a public company. To this company in 1938 the plaintiffs business of Albert David and Co. was made over. The company was given the same name. Till September 1954, the plaintiff and his wife owned more than 90 per cent. of the ordinary shares. The plaintiff was also the largest holder of preference shares. Under the Articles, only the ordinary shares had voting rights. To become a director, one need not hold any share at all. The plaintiff was the Managing Director for life under the Articles and under an agreement entered into between the company and the plaintiff pursuant to the Articles.

(3.) At the beginning the company used to deal with imported medicines. In 1939 the plaintiff conceived the idea of manufacturing medicine and with that object the plaintiff appointed Dr. Mukherjee a very able chemist and put him in charge of the manufacturing side. Dr. Mukherjee was given full scope and every facility to manufacture medicine. Dr. Mukherjee in his turn proved his worth. Dr. Mukherjee's services to the company were recognised and he was made a director of the company in July 1940. In a formal resolution passed in a meeting of the Board of Directors held on May 4, 1943 the plaintiff as Managing Director recorded that the success achieved by the company was chiefly due to the quality products prepared by Dr. Mukherjee. The phenomenal success of the company will appear from the sale of its products which rose to over Rs. 50 Lacs from 1952 onward. Dr. Mukherjee's position in the company steadily improved and while the plaintiff was the No. 1 in the company. Dr. Mukherjee became the No. 2. Dr. Mukherjee's remuneration was increased with the passage of time and when the dispute started Dr. Mukherjee was getting as his remuneration 1 per cent. of the total sale i.e. more than Rs. 55,000/- per annum. This was much more than what the plaintiff was getting as Managing Director. In 1948, Dr. Neogy was appointed as a propaganda officer on a salary of Rs. 500/- per month. Shortly thereafter Dr. Neogy was made a director.