P. B. MUKHARJI, J.

( 1 ) THIS application under article 227 of the Constitution raises an important point of company law.

( 2 ) THE dispute arises on a loan of Rs. 1,000 granted by the plaintiff-petitioner to the defendant company on a bill of exchange being a hundi for Rs. 1,000. On November 22, 1958, the defendant limited company drew a hundi for Rs. 1,000 on the second defendant, Ram Chandra Nag, who is also an opposite party here, payable to the plaintiff 90 days after date without grace which was accepted by the second defendant. It is the plaintiff's case that the hundi was presented to the defendants for payment but the hundi was dishonoured. The plaintiff sent letters of demand, but the money due was not paid. There was a reply by the defendant company on August 3, 1959, denying the hundi and the loan. The plaintiff filed the present suit on December 3, 1959, before the Small Cause Court, Calcutta.

( 3 ) THE trial court decreed the suit of the plaintiff in full with costs. The only contestant was the first defendant, the limited company. The acceptor did not appear. It is on record before the trial court, on the evidence of P. W. 1, Kishan Rathi, the plaintiff himself, that Naresh Chandra Mondal, director and the manager of the defendant-company, purchased the stamp for the defendant company in respect of the hundi, that Naresh wrote the hundi in his presence and affixed the company's rubber stamp on the hundi in his presence. On behalf of the defendant company, its director, Sambhu Nath Mondal, gave evidence. His evidence was that the hundi was not signed on behalf of the defendant company, that the account books of the defendant company, cash books and the balance-sheet showed that this money on the hundi, the sum of Rs. 1,000, never entered the till of the company and even the rubber stamp was not of the defendant company. This Sambhu Nath Mondal is, however, a cousin of Naresh Chandra Mondal, the maker and drawer of the hundi. Naresh was in November, 1958, when the hundi was drawn, a director and manager of the company. According to Sambhu's evidence, Naresh resigned from the company some time in February, 1959, i. e. , a few months after the date of the execution of the hundi.

( 4 ) THE defendant company applied for a new trial under Section 38 of the Presidency Small Cause Courts Act against this decree. The Full Bench of the Small Cause Court allowed the application and set aside the decree against the first defendant. The Full Bench found as a fact that Naresh Chandra Mondal was both manager and director of the defendant company at the time when the hundi was executed and that he had since resigned. The reason why the Full Bench of the Small Cause Court set aside the decree of the trial judge can be stated briefly.

( 5 ) ACCORDING to the Full Bench, Section 9 of the Companies Act, 1956, makes a certain clause in the articles of association of this defendant company repugnant to the Companies Act and, therefore, void to the extent of its repugnancy. Section 9 of the Act provides as follows :" Save as otherwise expressly provided in the Act:-- (a) the provisions of this Act shall have effect notwithstanding anything to the contrary contained in the memorandum or articles of a company, or in any agreement executed by it, or in any resolution passed by the company in general meeting or by its board of directors, whether the same be registered, executed or passed, as the case may be, before or after the commencement of this Act; and (b) any provision contained in the memorandum, articles, agreement or resolution aforesaid shall, to the extent to which it is repugnant to the provisions of this Act, become or be void, as the case may be. "

( 6 ) THEN the Full Bench relies on Section 292 of the Companies Act which mentions " certain powers to be exercised by the board only at its meeting " and that such act can only be done by means of a resolution passed at the meeting of the Board and that included the power to

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