JUDGMENT

Jagdish Sahil, J. - This First Appeal from Order by Messrs. Basant Company (hereinafter referred to as the appellant) has been filed under section 202 of the Indian Companies Act, 1913 (hereinafter called the Act) against the Benares Cotton and Silk Mills, Ltd., (in liquidation) (hereinbelow described as the company) and is. directed against the order of the learned District Judge, Varanasi, dated 3rd March, 1960.

It would contribute to a clear understanding of the points raised in this appeal if the following facts were given.

2. By means of the resolution dated 17th March, 1954, the Company decided to. issue some debentures and on 2nd April, 1954, they did so. On 11th April, 1954, 125 debentures were allotted to one M. K. Jhunjhunwala but before that date on 4th April, 1954 Jhunjhunwala had already sold 50 debentures to the appellant C L i--28 and on 7th April, 1954 transfer deeds in respect of the same were executed. On 17th June, 1954, on the appellant's instructions the Allahabad Bank, Ltd., (hereinafter referred to as the Bank) requested the Company to pay them interest on those fifty debentures. On 6th July, 1954, the Company refused to make the payment on the object