Directors are generally immune from liability to creditors of their company unless they obtain a loan by fraudulent misrepresentations.

H. L. AGRAWAL, C. J.

( 1 ) IN this appeal against the judgement of a learned single Judge arising out of an execution proceeding, the question for consideration is as to whether the executing court can construe the decree.

( 2 ) A joint and several decree was passed in favour of respondent 1 by the trial court for Rs. 50,401. 77 against the appellant and respondent 2, a limited company of which the appellant was the Managing Director, in Oct. , 1974.

( 3 ) WHEN the decree was put to execution and the decree-holder proceeded against the personal properties of the appellant-Managing Director, he filed an objection u/s. 47 of the Civil P. C. challenging his liability in his personal capacity. The executing court upheld the objection, but on appeal by the decree-holder, a learned single Judge of this Court, rejected the objection of the appellant.

( 4 ) THE relevant facts may now be briefly stated. The appellant as the Managing Director of the Judgement-debtor-company (defendant 1) placed orders with the decree-holder for supply of some building materials. Payments were made from time to time, but ultimately a sum of Rs. 1,56,000/- is said to remain due to the plaintiff from the defendants and accordingly he instituted the suit. The allegations regarding the liability of the appellant (defendant 2) were made in para 16 of the plaint as follows :-THAT as the orders were placed by defendant 2 the defendant 2 is also personally liable for the same". In this connection, the allegations made in para 7 may also be usefully noticed :-"that besides the construction work defendant 2 in the year 1967 on behalf of defendant 1 ordered for arranging carriage for carrying Asbestos sheets and machineries to the site of the defendant 1 at Khapuria. . " in the next para, the plaintiff stated that he accepted the order and "completed the same and submitted bills in the office of defendant 1".

( 5 ) A joint written statement was filed by the defendants denying the liability to the plaintiff. The personal liability of defendant 2 was also denied and their case was that the plaintiff was overpaid by the company and thus was to refund the excess amount paid to him. The defendants accordingly instituted a separate money suit against the decree holder on that ground.

( 6 ) BOTH the suits were tried together, and on a perusal of the judgement, I find that no issue was framed regarding the personal liability of the appellant, nor do I find any discussion on this aspect of the matter in the entire judgement as to whether the appellant as the Managing Director of the Company was liable in his personal capacity as well. In the operative portion of the judgement, while passing the decree for Rs. 50,401. 77 paise, it is stated :-". . . . . . . . . . . . . . . . . . . . BOTH the defendants are jointly and severally liable to pay the aforesaid amount to the plaintiff. . . . . . . . . "the suit by the appellant against the company and the decree-holder was, however, dismissed.

( 7 ) THE executing court, as already stated, allowed the objection of the appellant and held that the appellant, having been impleaded only in the capacity of the Managing Director was not personally liable for satisfaction of the decretal dues and that his personal properties could not be attached in the execution case. But the said order was set aside by the learned Judge in this Court.

( 8 ) THE learned Judge has made the following observation in para 2 of his judgement :-". . . . . . . . . . . . . . . . . . The allegations in the plaint further reveal that the plaintiff had clearly stated at some place therein that respondent 1 on account of his actions was personally liable. A reference to the judgement in the original money suit also shows that the trial court consciously passed the decree under execution holding both the respondents jointly and severally liable for the decretal dues. . . . . . . . . . . . "

( 9 ) ON the basis of the above observation, the learned Judge repell