( 1 ) THIS is an appeal by M/s. Kuldip Oil Industries the defendant in the suit. The plaintiff Ch. Pratap Singh filed the suit claiming a sum of Rs. 12,500/- as principal plus Rs. 114/-as interest at the rate of 6 per cent, per annum from 8-1-1946 to 16-7-1947, in all Rs. 13,641/- with pendente lite and future interest and also the cost of the suit.

( 2 ) THE case of the plaintiff was that Kuldip Singh, one of the Directors of the defendant company approached the plaintiff early in January, 1946 for the purchase of shares of the defendant company on the distinct understanding, (a) that the plaintiff would be taken in as one of the promoter Director of the company. (b) that the prospectus of the company was very promising and it was being floated without any liability whatsoever; and (c) that it belonged primarily to members of the Ahluwalia Community, to which both the plaintiff and Kuldip Singh belonged and the directorate would invariably consist of the same; that on the basis of the above representation and assurances the plaintiff advanced Rs. 12,500/by cheque on the 8th January 1946 and left the choice of shares to the said Kuldip Singh, that a few days after the plaintiff sen

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