Judgement

SHAH, J.: The respondent is a Private Limited Company; it carried on business in hides and skins, minerals, tobacco and other commodities and also acted as managing agents for the Nellor Power and Light Company Ltd. and for two other Companies. T. M. Ayyadurai, T. M. Rangachari and P. C. Chakrabarti were directors of the Company. Each director was paid a fixed remuneration of Rs.4,800 per annum for attending to the business of the Company. On June 21, 1951 the respondent was appointed by the Central Government as its agent for buying, checking weighing, leaf drying, storing, transporting, retaining and reselling tobacco under and in accordance with the directions issued from time to time. The Central Government agreed to pay to the respondent price of the tobacco purchased, charge at the rate of one anna per lb. for tobacco not redried, and at the rate of two annas per lb. for tobacco redried, and commission on all purchases. On June 22, 1951 the respondent passed a resolution placing T. M. Ayyadurai in "special charge" for arranging purchases of tobacco on credit, inspecting tobacco at Guntur and at Madras Port, and for supervising shipment of tobacco, and agreed to pay h