SABYASACHI MUKHARJI J.

( 1 ) IN order to appreciate the controversy in this case it would be relevant to refer to certain facts. It appears that on 30th November, 1954, there was half-yearly closing of account by Lothian jute Mills Co. Ltd. and the accounts for the half-year ended on 30th November, 1954, were drawn up by the Lothian Jute Mills Co. Ltd, The said accounts disclosed a surplus profit of Rs. 2,38. 754-8-7. On the 9th February, 1955, the directors submitted their report to the shareholders in respect of the half-yearly account up to 30th November. 1954. The directors recommended distribution of dividend Out of the aforesaid profit of Rs. 2,38,754-8-7 as follows:" Preference shares at Rs. 3-8-0 per share amounting to Rs. 35,000 and ordinary shares at Rs. 15 per share amounting to Rs. 1,50,000. Distribution of dividend has left a balance of Rs. 53,754-8-7 which was carried forward. The Lothian Jute Mills Co. Ltd. on the 24th March, 1955, distributed to the shareholders the aforesaid dividends of Rs. 35,000 on preference shares and Rs. 1,50,000 on ordinary shares. "

( 2 ) IN August, 1955, proceedings were taken for amalgamation Of Lothian Jute Mills Co. Ltd. and Albion Jut

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