Satyanarayana Rao, J.-This is an appeal by the plaintiff against the decree and judgment of the Subordinate Judge of Tirunelveli in Original Suit No.80 of 1946 under which the suit for several reliefs was decreed only to a comparatively small extent. In the plaint, as amended, the plaintiff claimed restoration and re-transfer of buses with the routes and permits described in Schedule B, an account by the defendant of the profits made from 7th August, 1942, till the date of restoration of the buses by employing the buses mentioned in Schedules A or B on the routes allotted to them and a decree in plaintiff’s favour for an amount, which may be ascertained after taking accounts, or, in the alternative for the above reliefs, a decree directing the defendant-company to specifically perform the contract by allotting 410 shares to the plaintiff or directing the defendant to pay the value of 410 shares as on 15th July, 1946. The plaintiff and the defendant are both private limited companies, incorporated under the Indian Companies Act in November and June, 1938, respectively, for doing business as common carriers of passengers and goods for hire in motor vehicles. The registered office of the plaintiff-company is at Kallidaikurichi, Tirunelveli District, and that of the defendant is at Tirunelveli Junction. Before the incorporation of the plaintiff-company, one, Natesa Ayyar (P.W.1), was carrying on the business of transport, but that business was later transferred to the plaintiff-company after its incorporation. Among the objects of the defendant-company as set out in the memorandum of association, Exhibit B-16, besides the business of carriers of passengers and goods on the Tinnevelly-Nagercoil route and its branches, the defendant-company was also to acquire and take over all the buses that were running in the Tinnevelly-Nagercoil route and its branches. There were also other objects set out in the memorandum of association but it is not necessary to refer to them. The buses were acquired by allotting shares in the company instead of paying the value of the buses in cash. The object of the company seemed to be to acquire all the buses and bus routes with a view to put down unhealthy competition and consequent loss. The share capital of the company was Rs.1,00,000 divided into 1,000 ordinary shares of Rs.100 each. The object of the company seemed to be to acquire all the buses and bus routes with a view to put down unhealthy competition and consequent loss. The share capital of the company was Rs.1,00,000 divided into 1,000 ordinary shares of Rs.100 each. The whole of this was treated as issued capital and its paid up capital before 1942 was Rs.35,900 in respect of 359 shares. The authorized capital, therefore, of this company, the whole of it, was also the issued capital. Natesa Ayyar (P.W.1) acquired in 1938, thirty-six shares in the defendant-company in lieu of three buses, which he transferred to the defendant-company. Vide Exhibits B-8 and B-20. In 1942, the plaintiff-company was plying buses along three routes, viz., Kallidaikurichi-Kariyar route, Tinnevelly-Palamcottah route and Tinnevelly-Pattai route. But, for some reason or other, the business of the plaintiff-company was ending in loss and, therefore, at a meeting of the general body of the company held on 6th August, 1942, it was resolved to transfer fourteen buses along with three routes to the defendant-company and to take shares for Rs.41,000 as a member. This resolution must have been preceded by negotiations with the managing director of the defendant-company, one Velayudham Pillai, as is made clear by the fact that in the resolution of that meeting, it was also stated that the managing director of the defendant-company also promised to advance monies on the security of the shares to discharge the debts of the plaintiff-company to be recouped from the dividend in three years. The resolution authorized the managing director of the plaintiff-company (P.W.1) to send an application immediately to the Tinnevelly Motor Bus Service Co., and further empowered him to do all acts necessary to carry out the resolution. The agenda for the meeting of the general body is Exhibit A-2 and item 4 in it relates to this subject. Exhibit A-4 is a copy of the resolution which is No. 4. The routes and the numbers of the buses including the reserve bus, which was agreed to be transferred to the defendant, were all specified in the resolution. In pursuance of the authority conferred upon the managing director P.W.1 sent an application to the defendant-company, Exhibit A-3, with which he enclosed a copy of the resolution of the general body of the plaintiff-company, Exhibit A-4. In pursuance of the authority conferred upon the managing director P.W.1 sent an application to the defendant-company, Exhibit A-3, with which he enclosed a copy of the resolution of the general body of the plaintiff-company, Exhibit A-4. On 7th August, 1942, i.e., the same day on which the application was made, on the reverse side of Exhibit A-3, the following note was made in the hand-writing of one, Chellam Pillai, who was one of the directors and was signed by five of the seven directors of the defendant-company. The note Exhibit A-3( a ), reads thus: “The Kallidaikurichi Transport Company may be included as a member for 410 shares and the amount requested by the managing director for discharging their debts may be paid from our company and receipt obtained.” Of the other two directors, Velayudham Pillai, the managing director was one and probably it was thought unnecessary that he should also sign it. There is no explanation why the signature of the other director was not obtained and there is no evidence that he had ever objected. It may be mentioned here that there were only nine or ten members constituting the general body of the defendant company of whom seven were directors. On the same day, i.e., 7th August, 1942, Velayudham Pillai, paid to P.W.1 a sum of Rs.16,001 on account as per the receipt,. Exhibit A-10. Subsequently, on 27th September, 1942 and 3rd February, 1943, P.W.1 received from the defendant-company Rs.5,000 and Rs.20,000 respectively, vide Exhibits A-10(a) and A-10(b). In all, therefore, P.W.1 received as loan from the defendant-company the sum of Rs.41,001. The fourteen buses were handed over to the defendant-company on the night of 7th August, 1942, after P.W.1 received the amount of Rs.16,001 as loan. It is the plaintiff’s case, which is spoken to by P.W.1, that the acceptance by the directors, as evidenced by Exhibit A-3(a), was communicated to P.W.1 by Velayudham Pillai immediately before the sum of Rs.16,001 was paid on the night of 7th August, 1942 and the buses were transferred. This evidence remains uncontradicted as the defendant did not venture to put Velayudham Pillai into the witness box to deny it. A share certificate, Exhibit A-5, bearing date 7th August, 1942 and a duplicate, also bearing the same date, seem to have been issued by the managing director to the plaintiff. This evidence remains uncontradicted as the defendant did not venture to put Velayudham Pillai into the witness box to deny it. A share certificate, Exhibit A-5, bearing date 7th August, 1942 and a duplicate, also bearing the same date, seem to have been issued by the managing director to the plaintiff. A return of allotment of shares was made to the Assistant Registrar of Joint Stock Companies in August, 1942, as is evident from Exhibit A-12, dated 12th August, 1942, Exhibit A-12(a), dated 5th September, 1942, Exhibit A-12(b), dated 16th September, 1942 and also Exhibit A-8, dated 25th March, 1943. On 7th March, 1943, a joint application was made by Natesa Ayyar representing the plaintiff-company and Velayudham Pillai representing the defendant-company, to the Road Traffic Board for transfer of the permits in respect of the fourteen buses to the defendant-company and this was sanctioned on 27th March, 1943, as per the proceedings of the Road Traffic Board, Exhibit A-6 (a) and was confirmed on appeal by the Central Road Traffic Board at the instance of an objector: vide Exhibit A-6(b), dated 9th June, 1943. One of the buses was attached by the decree-holder in Original Suit No.31 of 1940 on the file of the Subordinate Judge’s Court, Tirunelveli and a claim petition was filed on behalf of the defendant-company by Velayudham Pillai in which it was definitely stated that, in consideration of 410 shares of the defendant-company allotted to the plaintiff, the fourteen buses were acquired by the defendant-company, and that the Transport Company, Limited, Kallidaikurichi, i.e., the plaintiff had no right to the bus and, therefore, it could not be attached: vide Exhibit A-15, dated 16th April, 1943. The attachment, however, of the bus was raised as the decree amount was deposited as appears from the endorsement on the petition,, dated 18th September, 1943. Under section 32 of the Indian Companies Act, a summary of the shares of the defendant-company was sent to the Registrar of Joint Stock Companies in which it was stated that the 410 shares were issued as fully paid up, otherwise than in cash: Vide Exhibit A-9. At the general body meeting of 23rd March, 1944, the balance-sheet and the profit and loss account for the year ending June, 1943, together with the audit report, came up for consideration and they were approved unanimously by the general body. At the general body meeting of 23rd March, 1944, the balance-sheet and the profit and loss account for the year ending June, 1943, together with the audit report, came up for consideration and they were approved unanimously by the general body. In the balance-sheet then under consideration, the amount advanced, i.e., the sum of Rs.41,001 was shown as amount due by Natesa Ayyar to the defendant-company and a sum of Rs.10,250 was shown in the profit and loss account relating to the Town Bus and Kariyar Bus Service account as depreciation on fourteen buses of the value of Rs.14,000 which implies that the fourteen buses of the value of Rs.41,000 were treated as buses owned and possessed by the defendant-company in respect of which they were entitled to claim a depreciation as a deduction to set off against the profits of the year and, what is more, the amount of Rs.41,001 advanced to the plaintiff was shown as a loan due from Natesa Ayyar. It is no doubt true that, in this balance sheet, the value of the buses was not shown on the assets side: Vide Exhibit A-14, and the auditor’s report, which was before the general body meeting, Exhibit A-34, dated 6th March, 1944,. states that shares were issued to the value of Rs.41,000 for the purchase of buses and the sum of Rs.41,001 is treated as loan to Natesa Ayyar. Regarding the purchase of buses from the Transport Company, it is stated therein that there is no valuation definitely mentioned anywhere in the account books but the auditor was made to understand that this amount of Rs.41,001 represented the value of fourteen buses taken over and the depreciation was justified. The loss in respect of the TownBus Service and Kariyar Bus Service of Rs.14,096-3-6 was sought to be explained on the basis of the aforesaid transaction. In the general body meeting, besides the five directors, who signed in Exhibit A-3(a), there was Velayudham Pillai, the managing director, who was aware of the transaction from the beginning and two or three others, who were outside the directorate. In June, 1944, Velayudham Pillai ceased to be the managing director and the present managing director, Sayyed Khasim Sahib, was elected in his place. For the year ending 30th June, 1942, the company declared a dividend of six per cent. In June, 1944, Velayudham Pillai ceased to be the managing director and the present managing director, Sayyed Khasim Sahib, was elected in his place. For the year ending 30th June, 1942, the company declared a dividend of six per cent. and, for the year ending 30th June, 1943, a dividend of seven per cent. was declared. Natesa Ayyar received dividend warrants for the thirty-six shares which were held in his name in the defendant-company, for the year ending 30th June, 1943, but he did not receive dividend warrants in respect of 410 shares of the plaintiff-company. On 27th December, 1944, he got issued a lawyer’s notice to the defendant, Exhibit A-18, calling upon the managing director of the defendant-company to issue dividend warrants in respect of the 410 shares immediately. On 10th January, 1945, the managing director, Sayyed Khasim Sahib, sent a reply, Exhibit A-18(a) to the effect that the matter would be placed for consideration before the general body meeting of the defendant-company and that after the decision of the general body, a reply would be sent. He however added that, as he could see from the available records in the office of the defendant-company, there was no allotment of 410 shares to the plaintiff nor was there any application by the plaintiff to the directors of the defendant-company. After this reply, a general body meeting was convened. Exhibit A-34(b) is the notice calling for a general body meeting on 31st January, 1945. The resolution, as it was passed at that general body meeting stated: “The Kallidaikurichi Transport Company, Limited, having applied for 410 shares according to rules to the Board of Directors, Tirunelveli Motor Bus Services Co., Limited, the Directors of this company convened a meeting of the Board in pursuance of the same and brought the said application for approval. As the Board of Directors of the Company did not make the allotment, it was resolved by all the directors except Sri R. Velayudham Pillai that the 410 shares said to have been obtained by the said Transport Company cannot be binding on Tirunelveli Motor Bus Service Company.” The objection in this resolution was that, though there was an application in the records of the company’s office for the allotment of 410 shares, no allotment was made by the directors and that, therefore, the right to the shares did not legally vest in the plaintiff. On 14th April, 1945, a letter was addressed on behalf of the defendant-company by its lawyer to the Advocate of Mr. Natesa Ayyar, the managing director of the plaintiff-company, intimating him that the alleged allotment of the said 410 shares was not legal and that it was not supported by consideration. In this letter, it was also alleged that there was no application for allotment of shares, contrary to what was contained in the resolution of the general body meeting. After some more correspondence, the plaintiff instituted on 20th April, 1945, Original Suit No.35 of 1945 on the file of the Sub-Court, Tirunelveli, against the defendant for a declaration of the plaintiff’s title to 410 fully paid-up shares in the defendant-company and for a decree against the defendant for a sum of Rs.3,054-8-0 being the dividend together with interest at six per cent. per annum. Exhibit B-2 is the plaint in that suit. The main defence of the defendant in that suit was that the buses were sold for a sum of Rs.41,000 and the amount received by Natesa Ayyar (as loan) was not really a loan but represented the sale price of the vehicles with the routes, that the certificates in respect of the additional 410 shares was a forgery and was fabricated by the managing director of the plaintiff company, Natesa Ayyar, and the managing director of the defendant-company without the knowledge and consent of the other directors of the company. There was no application for the allotment of shares to the board of directors and there was no allotment of shares. There was only one omnibus issue framed in the suit, apart from the formal issues, which did not bring out however the real question for decision between the parties. The issue was: “Is the plaintiff entitled to 446 shares or only to 36 shares ?” Though the learned Judge, who tried the suit, noticed that it was not happily-worded, he did not amend it but took it for granted that the matter in dispute between the parties, whatever it may be, was within that issue and under it, he discussed the various questions of law and fact. In conclusion, he found that no title vested in the plaintiff in respect of the 410 shares as there was no allotment of the shares by the directors but that there was allotment only by the managing director, which was insufficient in law to vest title to the shares and to make the allotment legal. He, however, also went into the question whether the case of the defendant that there was a sale of the buses for a sum of Rs.41,000 or whether there was an agreement to exchange the buses for the shares was true and whether the sum of Rs.41,000 was really a loan advanced to Natesa Ayyar. On this question, he found that the case of the defendant that there was a sale was not true, but that there was an agreement to accept for the shares the buses and that the sum of Rs.41,000 advanced to Natesa Ayyar was a loan and not the sale price of the buses. In the result, the suit was dismissed with costs on 15th July, 1946. There was no appeal against this decision by the plaintiff but on 12th October, 1946, a notice, Exhibit B-9, was issued by a Vakil on behalf of the plaintiff to the defendant-company in these terms: “Now that Original Suit No.35 of 1945 on the file of the Sub-Court, Tinnevelly, has been dismissed on the technical ground that there has been a legal defect in the proceedings relating to the allotment of the 410 shares, the subject-matter of the aforesaid suit, the following position arises and is created by the result of the above suit. The Transport Company, Limited, which entered into the transaction of parting with its fourteen buses to you in lieu of 410 shares in your company has all along been under the idea, belief and impression that the entire transaction, inclusive of the allotment of the 410 shares was in order in accordance with law, valid and binding on you. But, however, the Court accepting your plea of invalidity attached to the allotment of shares has dismissed the suit. But, however, the Court accepting your plea of invalidity attached to the allotment of shares has dismissed the suit. Law and equity, therefore, enjoin you to restore to the Transport Company, Limited the buses delivered over to you or their substitutes and all additions to them together with all the route rights in the Palamcottah-Tinnevelly, Tinnevelly-Pattai, Ambasamudram-Saliyar routes original and subsequently obtained along with the net profits earned from 7th August, 1942, up to the date of re-delivery. You are hereby called upon to do so within three days from the date of receipt of this notice If you fail to do so on any account, you are hereby informed that a suit will be filed against you to obtain the reliefs aforesaid with costs.” There was no compliance with this demand made on behalf of the plaintiff by the defendant and the present suit was, therefore, instituted on 1st November, 1946. In the plaint, as originally framed, a claim for specific performance was not included. The plaintiff made an application on 19th March, 1947, under Order 6 rule 17, Civil Procedure Code, for amendment of the plaint (Interlocutory Application No.167 of 1947). Leave to amend was granted notwithstanding the opposition of the defendant by the Court by its order, dated 17th November, 1947 and the plaint was accordingly amended. This order granting leave to amend was affirmed by this Court in revision. The present suit, therefore, is one based upon a contract to allot shares, in exchange for fourteen buses, which still remained executory as the allotment in pursuance of it was declared to be invalid by the decree in Original Suit No.35 of 1945. In other words, the plaintiff wishes to fall back upon what he Claims to be the original executory contract concluded between the plaintiff and the defendant to exchange buses for 410 shares of the value of Rs.41,000. Though it is not very precisely stated in the pleadings, it has been so understood both in the Court below and also in the arguments before us. As a result of the existence of this contract, and its breach by the defendant, the plaintiff claims that he is entitled to enforce specific performance, or, in the alternative, to claim damages for its breach. As a result of the existence of this contract, and its breach by the defendant, the plaintiff claims that he is entitled to enforce specific performance, or, in the alternative, to claim damages for its breach. If the contract is treated as having been rescinded, he claims that he is entitled to restitution of the benefits which the defendant derived under the contract as it is a proved fact that the plaintiff, in pursuance of the arrangement, not only delivered the buses but also concurred in the transfer of the routes and the buses to the defendant by joining in an application which was made to the Road Traffic Board. The suit was resisted by the defendant on various grounds, which are covered by as many as fifteen issues in the case, some of which overlap. But the sum and substance of the defence at any rate as it emerged in the arguments before us is, (i) that there was no concluded contract of exchange between the plaintiff and the defendant; (ii) that the managing director, Velayudham Pillai, had no power or authority to enter into a contract of exchange so as to bind the company; (iii) that even if Exhibit A-3(a) had the concurrence of the directors, they had no authority to enter into a contract with a stranger to allot shares as it was opposed to the articles of the company; (iv) that under section 105-C of the Indian Companies Act, a contract agreeing to give shares in the first instance to the plaintiff, without following the provisions of that section, is void; (v) that if the contract is enforced by directing the allotment of 410 shares to the plaintiff, it would in effect and substance reduce the defendant-company to a subsidiary company thereby practically affecting and impairing its right to manage its own affairs without interference; (vi) that, in any event, the plaintiff is not entitled either to claim specific performance of the contract or damages for its breach, as under Exhibit B-9, he had definitely and irrevocably elected to treat the contract as having been rescinded and claimed restitution. In other words, under Exhibit B-9 and even in the plaint as originally filed, he never proceeded on the footing that he was standing by the contract and claimed relief on that footing but that the intention has always been, until the stage of amendment of the plaint, to claim restitution on the footing that the contract was rescinded by him; and (vii) that the suit was barred by limitation. There is also the question which was debated before us, viz., on what basis plaintiff should be granted either restitution if he is entitled to it, or damages for the breach of the contract if he is not entitled to specific performance, but is only entitled to damages for breach of the contract. It is rather difficult to determine from the judgment of the learned Judge whether he intended to find whether there was or was not a concluded contract between the parties. In paragraph 9 he found, to quote his words: “When the defendant has wholly failed to make out a case of conspiracy, fraud and collusion in the matter, when the evidence of P.W.1 is uncontradicted and is corroborated by the documents to which I have made reference supra, I have no option but to hold that the plaintiff’s case of the contract of exchange, viz., transfer of 14 buses in lieu of 410 shares has been proved.” In paragraph 13 of the judgment, he says that the finding in the previous suit was that there was no valid offer to purchase shares and no valid acceptance and therefore there was no valid contract and that finding is binding upon the plaintiff and is res judicata. He also states in that paragraph that there was election made by the plaintiff to treat the contract as having been rescinded by the notice, Exhibit B-9, and that, therefore, the plaintiff was not entitled to any relief on the footing that the contract was affirmed by him. He also found that the suit was not barred by limitation, that there was no enforceable contract and if there was any contract the plaintiff was not entitled to claim the relief of the specific performance of the contract. He came to this view on various grounds, which are referred to in paragraph 15 of the judgment. He also found that the suit was not barred by limitation, that there was no enforceable contract and if there was any contract the plaintiff was not entitled to claim the relief of the specific performance of the contract. He came to this view on various grounds, which are referred to in paragraph 15 of the judgment. In paragraph 17, under issues 2, 2(b) and 3, he found that the plaintiff was not entitled to demand an account from the defendant of the profits earned by their buses from 7th August, 1942 and finally he found that the plaintiff was entitled to recover the value of the fourteen buses on the footing of failure of consideration and the value of the buses was fixed by him at Rs.41,000. The plaintiff, however, objects to the finding as regards the value in this appeal. As there was a loan due from the plaintiff to the defendant, he allowed the loan to be set off against the amount which the defendant is bound to pay as the price of the fourteen buses and directed the defendant to pay court-fee on a sum of Rs.41,001 treating it as a set off. In the result, after making the necessary adjustments, he found that the plaintiff was entitled to a decree for the balance, viz., Rs.3,480-8-4, with interest at six per cent. per annum. In the appeal by the plaintiff, the correctness of the findings of the learned Subordinate Judge, which were against the plaintiff, were canvassed and the position taken up by the defendant was contested. The first and foremost question which is the foundation for the suit is the existence of a concluded executory contract, which preceded the allotment. The legal possibility of a valid executory contract for allotment of shares is recognised, provided there was an offer to take up shares which was communicated to and was accepted by or on behalf of the company. An executory contract to take up shares may be brought into existence in the same manner and subject to the same principles as under the Contract Act. The communication of the acceptance need not be in writing. It may be verbal or may be inferred by conduct: see Bai Mangu v. Bharatkhand Cotton Mills, Co.1 and In re Universal Banking Corporation (Gunn’s case)2. The communication of the acceptance need not be in writing. It may be verbal or may be inferred by conduct: see Bai Mangu v. Bharatkhand Cotton Mills, Co.1 and In re Universal Banking Corporation (Gunn’s case)2. A Court has jurisdiction to decree specific performance of a contract either to take shares or to allot shares subject to the same principles which govern suits for specific performance, as laid down in the Specific Relief Act. It has, therefore, to be seen, whether the evidence in the case establishes an executory contract of exchange of shares for the buses, apart from allotment which was held to be void and ineffective to convey title to the plaintiff to 410 shares. In pursuance to the resolution of the plaintiff-company, Exhibit-A-4, dated 7th August, 1942, P.W.1 sent an application Exhibit A-3. In the earlier litigation, these two documents, Exhibits A-3 and A-4, were not available but, in the present case, the plaintiff got them produced by summons issued to one Sesha Ayyangar, the Vakil of Velayudham Pillai, to produce the documents. On the same day, 7th August, 1942, the matter was considered by the directors, as appears from the endorsement, Exhibit A-3(a), though there is no record of any meeting of the board of directors nor is there any evidence that the seventh director accepted or rejected it. The endorsement, Exhibit A-3 (a), which was signed by five of the directors and which must have had also the concurrence of the managing director, Velayudham Pillai, constitutes an acceptance of the offer of exchange made under Exhibit A-3 by a majority of the directors of the company and also constitutes an agreement to advance to the plaintiff the amount required to discharge his debts. It is no doubt true, as stated by Fry, L.J., in In re Portuguese Consolidated Copper Mines, Limited3, that the directors cannot think without a meeting, It is also established that a company is entitled to the benefit of the "combined wisdom" of the directors in a meeting, unless the articles provide for transacting the business by resolution in writing circulated to the directors without a meeting. In the case of this private limited company, there is no doubt no such article authorizing the directors to dispose of the business by circulation. In the case of this private limited company, there is no doubt no such article authorizing the directors to dispose of the business by circulation. Though the minutes book of the defendant-company does not record any meeting of the board of directors on 7th August 1942, there is no evidence that when all of them signed on the same day, they did not consult each other. They belong to different places near by and the directors could have given evidence in the matter to enlighten the/Court where and under what circumstances they signed the endorsement, Exhibit A-3(a), on the same day. No oral evidence was adduced on behalf of the defendant. The theory of combined wisdom", has not been rigidly applied and Bacon, V.C., in In re Bonnelli’s Telegraph Company (Collie’s Claim)4, considered the import of the expression "combined wisdom" and expressed the view that the directors must be of one mind but that it is not necessary that they should all meet in one place. The learned Vice-Chancellor says: “I can conceive a great many circumstances which I do not say happened in this case, but which may happen in any case where the actual presence of the three directors cannot be procured, but where their combination can be most effectually secured by correspondence, by transmission of messages, or by other means which may be resorted to. If you are satisfied that the persons whose concurrence is necessary to give validity to the act did so concur, with full knowledge of all that they were doing, in my opinion, the terms of law are fully satisfied, and it is not necessary that whatever is done by directors should be done under some roof, in some place, where they are all three assembled.” Under the articles of association of the defendant-company the quorum for the meeting of directors is three. The endorsement was written by one of the directors and was signed by five of them. In the absence of any clear explanation on behalf of the directors, it is rather difficult to accept the contention that the directors did not consider the propriety of accepting the offer made on behalf of the plaintiff and that they were not of one mind. In the absence of any clear explanation on behalf of the directors, it is rather difficult to accept the contention that the directors did not consider the propriety of accepting the offer made on behalf of the plaintiff and that they were not of one mind. It is difficult to reject the acceptance by them on the technical ground that there is no record of any meeting in the minutes book of the company on that day. One of the signatories to Exhibit A-3(a), is the present managing director and he, who is contesting the suit, did not venture to go into the witness box and throw light on the question. It is the evidence of P.W.1, which was not contradicted on the other side, that Velayudham Pillai, the then managing director, communicated this acceptance to P.W.1, whereupon on the night of 7th August, 1942, an amount of Rs.16,001 was paid (see Exhibit A-10) and the fourteen buses were delivered to the defendant. It must be remembered that at that time the policy of the company was to acquire as many routes and buses as possible to avoid unhealthy competition, particularly during the war period when they were making enormous profits in the business. Therefore there was an offer by the plaintiff-company and acceptance on behalf of the defendant, which was communicated to the plaintiff and was acted upon. In the balance sheet for the period ending 30th June, 1943, Exhibit A-14, the amount due by Natesa Ayyar, viz., Rs.41,001 was shown as a loan to him and in respect of fourteen buses depreciation of over Rs.10,000 was claimed. The auditor’s report drew pointed attention to the shares. The balance sheet and the auditor’s report were placed before the general body with the concurrence of the directors. The general body consisted of seven directors and two or three others and the amounts earned by these buses and the routes were shown in the balance sheet. We purposely refrain from making any reference to the intermediate steps taken by the managing director of making a return to the Registrar of Joint Stock Companies of the allotment of shares and the joint application for the transfer of routes made by P.W.1 and Velayudham Pillai, as it may be said that it was only an act of the managing director and not of the directors. But the same explanation cannot be availed of with reference to the balance sheet and the auditor’s report which were accepted by the general body including the directors. They should have, if they had any doubt, enquired of the managing director as to how it happened that there were fourteen more buses whose earnings were brought into the balance sheet and the depreciation in respect of which was claimed as a deduction. The loan to Natesa Ayyar of a large sum of Rs.41,000 should certainly have attracted the attention of the directors to call for an explanation from the managing director if really they were ignorant of it as is now claimed. Unfortunately, they did not go into the witness box to explain their conduct. The balance sheet and the auditor’s report were unanimously accepted by the meeting of the general body. It is therefore reasonable to presume that this contract of exchange was accepted by the directors and the shareholders. We are not now concerned with the legality of the allotment of shares and the irregular procedure adopted in making the allotment, which was the subject-matter of consideration in the earlier suit, which resulted in the declaration that the plaintiff was not entitled to the shares in question. We are only dealing with the existence of an executory contract which was accepted and communicated and acted upon, until the suit, Original Suit No.35 of 1945, which was preceded by the exchange of notices in which the allotment was repudiated. To support the case of the plaintiff, there is the evidence of P.W.1, Natesa Ayyar, and there is no evidence contra. We are, therefore, of opinion that apart from the invalid allotment, there was an antecedent executory contract of exchange between the parties which was acted upon. As the defendant refused to perform the contract and repudiated it, is the plaintiff entitled to specifically enforce the contract or claim damages for its breach or claim restitution on the ground that it became void ? It was open to the plaintiff, after the disposal of the suit, Original Suit No.35 of 1945, either to affirm the contract and treat it as subsisting and to claim specific performance or to treat the contract as having been broken by the defendant as it was denied in the earlier litigation and to claim damages. It was open to the plaintiff, after the disposal of the suit, Original Suit No.35 of 1945, either to affirm the contract and treat it as subsisting and to claim specific performance or to treat the contract as having been broken by the defendant as it was denied in the earlier litigation and to claim damages. Without affirming the contract, it is also open to him to rescind the contract, accepting the repudiation and claim restitution of the benefits received by the defendant under the contract. The interconnection between the rights and the corresponding obligations arising under sections 39, 64, 65 and 75 of the Contract Act were considered by Sir George Rankin in the decision of the Privy Council in Muralidhar Chatterji v. International Film Company, Ltd.1. In explaining the significance of “void” and “voidable”, Sir George Rankin quoted with approval, the passage from Pollack and Mulla in their Commentaries on the Indian Contract Act (Sixth edition), at page 365: “Whenever one party to a contract has the option of annulling it, the contract is voidable; and when he makes use of that option the agreement becomes void.” After pointing out that under section 64, “....... a liability to make restitution attaches to a party putting an end to a contract under section 39”, their Lordships observed: “the right to damages (i.e., under section 75) presents no insuperable objection to the application of section 64 to cases of decision under section 39”. Under section 64, the obligation to restore the benefit is cast on the party rescinding a voidable contract and not on the other party, even though it was the other party’s default that led to the recision. That left untouched the rights of the rescinding party under sections 65 and 75. In the present action, the plaintiff-company carried out in full their part of the contract with the defendant-company and no further obligation under that contract rested on the plaintiff. When the defendant-company repudiated the contract itself the plaintiff was entitled to treat the contract as void within the meaning of section 65. It became void when the plaintiff exercised his right to rescind it under section 39. The defendant’s liability, then, was to restore to the plaintiff any advantage the defendant had received under that contract or to make compensation for it. That was independent of the statutory right accrued to the plaintiff under section 75. It became void when the plaintiff exercised his right to rescind it under section 39. The defendant’s liability, then, was to restore to the plaintiff any advantage the defendant had received under that contract or to make compensation for it. That was independent of the statutory right accrued to the plaintiff under section 75. The rights were not necessarily alternative; they could be cumulative. The advantage which the defendant received under the contract within the meaning of section 65 included in the circumstances of this case not only the value of the fourteen buses with the route rights but also the profits the defendants earned directly by the use of those buses and the route rights. After the suit was disposed of, on behalf of the plaintiff, a lawyer’s notice, Exhibit B-9, was issued to the defendant. All that was claimed in that notice was restitution of the benefit, viz., the return of the buses together with the substitutes and additions and the route rights together with the net profits from 7th August, 1942, up to the date of re-delivery. In the notice, it was alleged that the plaintiff was under the impression till the disposal of the suit, that the entire transaction inclusive of the allotment of 410 shares was in order, in accordance with law, valid and binding but that the Court, accepting the plea of the defendant based on the invalidity attaching to the allotment of shares, dismissed the suit. It is, therefore, claimed that, in law and equity, the plaintiff was entitled to restoration of all the benefits which the defendant had obtained under the contract, which became void by the decision of the Court in Original Suit No.35 of 1945. In our opinion, the plaintiff by the notice, Exhibit B-9, far from affirming the contract, and claiming specific performance as if it continued to exist or even claiming damages as if it was broken by the defendant, acted as if the contract was wiped out and claimed that the parties should be restored back to the position in which they would have been, had not the contract been entered into. After this definite election, with full knowledge of the facts and after consulting a lawyer, it is difficult to hold, notwithstanding the finding that there was an executory contract of exchange, that the plaintiff is entitled to either specific performance or to damages. After this definite election, with full knowledge of the facts and after consulting a lawyer, it is difficult to hold, notwithstanding the finding that there was an executory contract of exchange, that the plaintiff is entitled to either specific performance or to damages. What is more, even in the present suit as originally filed, no claim for specific performance was in the first instance made. It was only the other reliefs that were insisted upon in the suit. Later by an amendment, the plaintiff included in the suit a prayer for specific performance but, in the body of the plaint, no specific allegations were made justifying a decree for specific performance. We think, therefore, that by reason of Exhibit B-9, and the plaint as originally filed, P.W.1 has put himself out of his power to revive or resuscitate the contract, which by his own act of election, was rescinded. In our opinion, it is too late for him to go behind his own election and get rid of its effect. In this view, the only relief which the plaintiff will be entitled to, is the restoration of the benefits received by the defendant under the contract and no more. This is the relief, which the lower Court thought, in justice, the plaintiff was entitled to, though we are not in entire agreement with the extent of the relief granted by the lower Court. In the above view, it may not be necessary to consider the other objections raised on behalf of the defendant regarding the validity and the enforceability of the contract except the question of limitation. On this point however, we see no reason to differ from the conclusion of the trial Court that the suit was not barred by limitation. By reason of the decision in the earlier suit, the contract became void and it is from that date that the plaintiff’s cause of action arose. Till then he was in the position of a party who accepted performance of the contract by the defendant by alloting the shares but the allotment was declared to be ineffective and invalid by the decree in Original Suit No.35 of 1945. Till then he was in the position of a party who accepted performance of the contract by the defendant by alloting the shares but the allotment was declared to be ineffective and invalid by the decree in Original Suit No.35 of 1945. Even to enforce the contract, the suit is in time, as no definite period was fixed under the contract for specific performance and it was only when there was demand and refusal after the disposal of Original Suit No.35 of 1945, that the cause of action for enforcing the contract arose. The objection, therefore, that the suit was barred by limitation must be over-ruled. As the other objections were also argued before us, we may briefly refer to them. In view of the finding that the contract had the approval of the directors and even of the general body, the objections that the managing director had no power to enter into the contract and that there was no power to allot shares to strangers, lose their force. Section 105-C of the Companies Act also does not stand in the way as, in the present case, the whole of the capital is issued capital. Whatever may be the interpretation that may be placed on section 105-C, the restriction in that section does not apply to issued capital. The Supreme Court, in Nanalal Zaver and another v. Bombay Life Assurance Company and others1, did not finally decide the proper construction of this section though there was the opinion of Das and Mukherje, JJ., that section 50 of the Indian Companies Act applies to the increase of the share capital above the authorised capital and section 105-C applies to the issue of further shares within the authorised limit, i.e., within the authorised capital. In that case, as appears from the facts, the directors decided to issue further shares within the authorised capital but, as in the present case all the shares were already issued, the allotment of such shares would not contravene the provisions of section 105-C. It now remains to consider the extent of the relief by way of restoration of the benefit which the plaintiff would be entitled to. The learned Judge in the Court below thought that the plaintiff was entitled only to the value of the shares as on the date of the contract, viz., 7th August, 1942, which was fixed by him at Rs.41,000, the nominal value of the shares agreed to be allotted to the plaintiff. He refused to grant to the plaintiff the substituted buses and did not direct the transfer of the routes nor did he direct an account of the profits, which the defendant-company earned by the use of the buses of the plaintiff. The plaintiff contends and, in our opinion, rightly that the nominal value of the shares should not have been taken as the basis for valuing the fourteen buses. * * * * * * (The learned Judges then held that the market value of the buses on 7th August, 1942, was Rs.75,000.) The other relief regarding the substituted buses cannot be granted as no legal basis has been shown to us to justify the grant of such relief. It must be rejected. But there is no reason to reject the claim of the plaintiff that he was entitled, not only to the value of the buses as on that date but also to an account of the profits, which were earned by the defendant-company by the use of the buses. The buses were purchased for the specific purpose of plying them along the three routes, which were also transferred by the plaintiff to the defendant. It is, therefore, reasonable to direct the defendant to restore to the plaintiff not only the value of the buses but also the profits earned by those buses, which have to be ascertained by the lower Court by taking an account of the profits. The plaintiff at present has no buses. The claim, therefore, of the plaintiff that the defendant should also be directed to retransfer the routes or at any rate, must concur in an application to transfer the routes cannot be considered. If however, the plaintiff purchases buses and an application is made to the Road Traffic Board for giving him back the three routes which, with his concurrence, were transferred to the defendant-company, the Road Traffic Board may consider the circumstances under which the plaintiff parted with his rights and the defendant unjustly retained the benefit and the user of those routes. The appeal, therefore, will be allowed in part to the extent indicated above. The defendant will be entitled to the set-off which was claimed and was allowed by the Court below on his payment of the court-fee. There will be a decree, therefore, in favour of the plaintiff for the balance after deducting a sum of Rs.41,000 from the sum of Rs.75,000. The difference between the two amounts with subsequent interest will be substituted for the sum of Rs.3,480-8-4 decreed by the lower Court. The plaintiff will also be entitled to the profits earned by the defendant by the use of the buses from 8th August, 1942, which will be determined by the lower Court after taking accounts. The liability to account is on the defendant. The mode of taking account and the items that should be considered will be decided by the lower Court in the first instance. The refusal to direct delivery of the substituted buses may not preclude the plaintiff from showing, if he can, that the profits earned by them should also enter into the computation. The lower Court will pass a final decree for the amount after it is ascertained. There is no substance in the memorandum of cross-objections. The ground is that interest on Rs.41,000 should have been allowed but that ground was not taken in the grounds of the memorandum of objections, the defendants’s only grievance being that the plaintiff should not have been allowed interest from the date of the plaint which, of course, is an untenable contention. The memorandum of cross-objections is, therefore, dismissed with costs. The appellant and respondent will pay and receive proportionate costs throughout in the appeal and the suit. Interest on Rs.75,000 will be allowed at six per cent. per annum from the date of the plaint. R.M. ----- Appeal allowed in part.