Judgment

SHAH, J.:

One M. C. Javeri was appointed Secretary of the Associated Banking Corporation of India Ltd., and under a power of attorney dated August 14, 1943 he was entrusted with powers, amongst others, to supervise, manage and conduct the business, to lend and make at such rate or rates of interest as he thought fit with or without security to any person, and to receive and give good discharge for repayment of any moneys so lent or advanced and all interest thereon and to borrow moneyupon the security or any securities, assets of property of the Bank and upon such terms as he thought fit for the benefit of the bank. On March 5, 1945 Javeri was appointed a Director of the Bank. On April 21, 1947 by order of the High Court of Bombay the Bank was ordered to be compulsorily wound up and an Official Liquidator was appointed to liquidate the business of the Bank. On August 23, 1949 the liquidator submitted a return for the assessment year 1948-49 disclosing for the previous year ending June 30, 1947 business loss computed at Rs. 9,71,664, after debiting against the gross profits in the profit and loss account an amount exceeding Rs. 12,00,000 as debts which became irrecoverable. O