SHUNMUGAM SUNDARAM CHETTIAR Vs. AARANGA RAMA NAICKER

JUDGEMENT

(1.) The plaintiff is the appellant in the present appeal. Defendant 1 was the President of a Company called "The Dhandayudhapani Go, Ltd." and defendant 2 was its Managing Director. The plaintiff's case was that defendant 2 represented to him that the Company was working properly and that on the strength of this and of the prospectus Ex. A, he induced him to lake shares to the value of E Section 1,000. The share certificate, Ex. B has been Signed by the President. It was found afterwards that the Company was not working and that the representations with respect to it in Ex. A were false. The plaintiff sued for the return of his money.

(2.) Defendant 2 who is said to have become bankrupt, remained ex par to. The trial Court stated that the plaintiff was proceeding against defendant 1 on two grounds: (1) for his having along with defendant 2, received the money and for having made misrepresentations as to the affairs of the Company; find (2) for his liability on account of the misrepresentations contained in the prospectus issued by the Company. On the first point, the plaintiff examined himself and on other witness and defendant 1 examined himself on the other side. The trial Court remarked that the evidence of the plaintiff's witness was, not at all satisfactory and did not deal with the evidence of the plaintiff. It did not find it proved that defendant 1 was present when the amount was paid and that be along with defendant 2 made any representations to the plaintiff. On the second ground it was admitted that the representations in Ex. A that the Company had purchased the Star Mills for B Section 25 000 as also the wood saws in the Coimbatore Industrial School were false. The statement that the Company was now carrying on business was also false. As regards the issue of prospectus defendant 1 admitted that defendant 2 was appoint-ed the Managing Director, that he was to look after everything, that it was in his power, as Managing Agent, to issue the prospectus and that he himself took no steps to supervise him. On these admissions and findings the trial Court held that defendant 1 as a Director of the Company was liable under S, 100, Companies Act, 1913.

(3.) On appeal the learned Subordinate Judge dismissed the suit As regards the first ground, the learned Subordinate Judge set out the evidence of the plaintiff and his witness and of the defendant and without further comment said : I therefore agree with the lower Court that there is no sufficient evidence of misrepresentation or fraud of defendant 1.