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Probodh Chandra Chakravarty Vs. Jatindra Mohan Chakravarty and ors. - Court Judgment

LegalCrystal Citation
SubjectCompany
CourtKolkata
Decided On
Reported inAIR1940Cal177
AppellantProbodh Chandra Chakravarty
RespondentJatindra Mohan Chakravarty and ors.
Excerpt:
- .....defendant 1 and it arises out of a suit commenced by the plaintiffs for recovery of money due on a promissory note. the first two plaintiffs are the present proprietors of a timber company which was also joined as the third plaintiff in the suit. they had supplied timber and wood products to defendant 2, the labour house ltd. of which defendant 1 was the president. that company went into voluntary liquidation and defendant 1 was appointed the liquidator. the assets of this firm were taken over subsequently by another firm known as the steel construction co., who are made defendant 3 in the suit and defendant 1 was a director of that firm too. the plaintiffs' case is that they did not get the price of the timber, which they supplied to defendant 2 on requisition of defendant 1 and.....
Judgment:

B.K. Mukherjea, J.

1. This appeal is on behalf of defendant 1 and it arises out of a suit commenced by the plaintiffs for recovery of money due on a promissory note. The first two plaintiffs are the present proprietors of a timber company which was also joined as the third plaintiff in the suit. They had supplied timber and wood products to defendant 2, the Labour House Ltd. of which defendant 1 was the President. That company went into voluntary liquidation and defendant 1 was appointed the liquidator. The assets of this firm were taken over subsequently by another firm known as the Steel Construction Co., who are made defendant 3 in the suit and defendant 1 was a director of that firm too. The plaintiffs' case is that they did not get the price of the timber, which they supplied to defendant 2 on requisition of defendant 1 and threatened him with a suit. Eventually a promissory note was executed on 5th December 1932 by defendant 1 both in his personal capacity as well as a director of defendant 3 company, and he promised to pay the dues of the plaintiff's amounting to Rs. 1915-8-3. The plaintiffs in this suit have claimed to recover this sum of money together with interest.

2. A number of defences were taken by the three defendants all of whom contested the suit. So far as defendant 3 is concerned, it was admitted that it was being wound up compulsorily tinder orders of this Court, and the assets were taken possession of by the Official Liquidator appointed by this Court some time in December 1932. As no permission of this Court under Section 171, Companies Act, was obtained in respect of the claim against this company, it was held by both the Courts below that the suit would fail against defendant 3 on that ground. The suit was also dismissed against defendant 2 on the ground that it was not a party to the promissory note and that the original claim on the basis of the goods supplied was long barred by limitation. Both the lower Courts decreed the suit against defendant 1, alone, overruling all the defences taken by the latter, and he is the sole appellant in this appeal. Two of the contentions which were put forward on behalf of defendant 1 in the Courts below have been pressed for our consideration by Mr. Bose who appeared in support of this appeal. The first ground is that on the promissory note as it stands, there is no personal liability on the part of defendant 1 to pay the money; he undertook the liability only as representing defendant 3 company whose director he was. The second ground is that the plaintiff having already compromised the matter with defendant 3 and obtained satisfaction from the latter in respect of the identical debt, could not sue defendant 1 over again.

3. Now so far as the first point is concerned, Mr. Bose relies upon the signature which was made by the executant in the promissory note. Defendant 1 admittedly signed his own name in the extreme right corner of the document, where the stamps were placed, but just above his signature the following words were impressed by a rubber stamp. 'For and on behalf of the Steel Construction Co. Ltd,' and below his name was also the word 'Director' impressed by the same rubber stamp. Mr. Bose argues that whatever liability defendant 1 might have undertaken was undertaken by him. only as a representative or director of the Steel Construction Company, and he was not personally liable on the promissory note. The contention though plausible are first sight seems to me to be without any substance. The body of the note clearly shows that defendant 1 Probodh, promised to pay the amount, both in his own personal capacity, as well as a director. b defendant 3 company. Probodh was therefore the maker of the instrument in both? the capacities, and he did sign the note byway of authenticating it and giving effect to the contract contained therein.

4. True, the words 'for and on behalf, of the Steel Construction Co.' appeared at the top of his signature but having regard to the clear intention of the parties expressed in the body of the document, I think that these words must be ignored as unnecessary and unmeaning surplus age. The parties did intend that defendant 1 should be personally liable, and as defendant 1 did actually sign the note, the formal endorsement at the top could not alter the agreement and limit the liability of the executant in any way. The inference is strengthened by the fact found by the Courts below that defendant 3 company was already in liquidation at the date when the promissory note was executed, and there was no resolution passed by the company authorizing defendant 1 to execute the note on their behalf. The first contention of Mr. Bose is thus overruled. As regards the second point it appears that there was a proceeding under Section 153, Companies Act, in respect of the affairs of defendant 3 company started by its crediditors which included the plaintiffs, and a, scheme was sanctioned by this Court. The-plaintiff did obtain a fraction of their dues-under the scheme, though they did not get the debentures the issue of which was subsequently stopped.

5. In my opinion, as the liabilities of defendant 1 and defendant 3 were both joint and several, the plaintiffs are quite competent to institute this suit against defendant 1 though it is not disputed that they cannot recover from defendant 1 what they have already recovered from defendant 3. Mr. Roy who appears for the respondent has satisfied us that the plaintiffs have duly given credit for the sums they obtained from defendant 3 and has taken out execution for the balance only. The result is that both the contentions fail and the appeal is dismissed with costs. No order is necessary on the application.

Latifur Rahman, J.

6. I am of the same opinion and can add little to what my learned brother has said. The main point is whether or not defendant 1, the appellant before us, is personally liable on the promissory note executed by him. It appears that in the body of the promissory note defendant 1 promised to pay on behalf of himself and for and on behalf of the Steel Construction Company Limited, but at the bottom he only signed his name on the stamps, over which was impressed with a rubber stamp the words 'for and on behalf of the Steel Construction Company Ltd.' and below the word 'Director.' The question therefore is whether he has pledged his personal credit. Looking at the promissory note, and taking into consideration the particular circumstances under which it was executed, the intention of defendant 1 seems to be to make himself personally liable. I agree that this appeal should be dismissed with costs.


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