VADILAL RAGHAVJI Vs. MANEKLAL MANSUKHBHAI

JUDGEMENT

(1.) This is a first appeal from the judgment of Mr. K. J. Desai, First Class Subordinate Judge at Ahmedabad, dismissing the plaintiff's suit on the preliminary issues Nos. 1, 2, 4, 6, 7 and 8. In effect these preliminary issues are in the nature of what would have been in old days a demurrer to the plaintiff's case as pleaded in his plaint.

(2.) The suit is one brought by the plaintiff on behalf of himself and all other shareholders in the defendant company except the first defendant and his nominees and those under his control. The first defendant is the manager and agent of the defendant company, or as the phrase runs in India, one of its Secretaries, Treasurers and Agents, and his firm was so appointed in the Memorandum of Association itself as is unfortunately often done in this Presidency.

(3.) The charges brought against defendant No. 1 are based on fraud. Para 5 of the plaint alleges that the first defendant's firm as agents of the company have been guilty of frauds as thereinafter mentioned and they decline to allow the plaintiff to inspect the account books of the company as they are afraid that such inspection will assist the plaintiff in exposing the frauds aforesaid. Para 6 alleges that:- The first defendant's firm have taken advantage o- the fiduciary position they occupy towards the company and have obtained pecuniary advantage for themselves (1) by on divers occasions wrongfully diverting the goods of the company or to which the company were entitled to their own use and advantage : (2) by appropriating to their own use large profits made in transactions entered into in the name of the company in cotton, all of which transactions have been concealed from the company and not entered in the account books of the company. Certain particulars are then given in the plaint and it is alleged that in addition to the particulars given there are other instances of fraud which would only be brought to light on a proper discovery. Then the prayer asks for an account of all profits and pecuniary advantages obtained by the first defendant by reason of his wrongful acts and for payment of the same, and an account of the profits he has made by the use of the company's money and for the payment of the same.