AIR 1942 MADRAS 365

Madras High Court

Hon'ble Judge(s): Venkataramana Rao, Horwill , JJ

(A) Companies Act (7 of 1913) , S.238, S.103— Person signing prospectus as director but resigning before declaration u/S.103 cannot be made liable for pecuniary loss sustained by company by misfeasance of directors. A person who signed the prospectus of a company, tendered his resignation before the declaration under S. 103 was sent to the Registrar and before the company commenced business : Held that it could not be said that he was guilt of any misfeasance by reason of which any pecuniary loss was sustained by the company by virtue of payments made after his resignation.(Para 367C1) (B) Companies Act (7 of 1913) , S.235— Misfeasance. Becoming a Director by accepting a gift of shares without paying for them is a misfeasance.(Para 367C1) (C) Companies Act (7 of 1913) , S.235— Section does not exclude non-feasance - It applies to every act of commission or omission. Section 235 does not prima facie exclude non-feasance. It would apply to every act of a Director, whether of commission or omission which is a breach of duty to the company in consequence whereof loss results to the company : (1928) 1 ....