Judgment - Chagla, C.J.

1. The Exchange Bank of India and Africa, Ltd., was incorporated on 30-4-1942. It suspended payment on 2-5-1949, and an order of winding up was made on 24-6-1949, and the Official Liquidator was appointed liquidator. On 12-9-1951, the Official Liquidator took out a misfeasance summons against eight directors and two auditors calling upon them to pay various sums of money as being due by them on account of misfeasance committed by them. This summons came on for hearing before Tendolkar J. on 3-11-1952. On 4-11-1952, a compromise was arrived at between six directors and the compromise was to the effect that these directors were prepared to pay a total sum of Rs. 20 lakhs to the Liquidator in such proportion or manner as Sir Jamshedji Kanga shall in his absolute discretion decide as a valuer and not as an arbitrator after giving each of the directors a summary hearing. When this compromise was reported to counsel for the Liquidator, he insisted on the liability of all the directors being joint and several. He was prepared to accept a sum of Rs. 20 lakhs, but he did not want the liability to be fixed by Sir Jamshedji Kanga to be several, and he wanted each of th

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