Anantanarayanan, J.- Arising out of the Liquidation Proceedings relating to the Kaleeswarar Mills, Limited, two applications were filed before Venkatadri, J., namely, Company Application Nos. 393 of 1960 and 123 of 1961. The first was by the Official Liquidator, on behalf of the company in liquidation, for directing the Dr. Alagappa Chettiar Educational Trust, hereinafter referred to as the Trust (second respondent), to pay a liquidated sum of Rs. 4,40,000, out of the amounts in the hands of the Alagappa Textiles (Cochin), Limited, hereinafter referred to as the Textiles, and to retain the balance pending settlement of accounts between the company in liquidation and the aforesaid first respondent. Application 123 of 1961 was also by the Official Liquidator, for an injunction restraining the Alagappa Textiles (Cochin), Limited, hereinafter referred to as the Textiles, from paying to any party or otherwise disposing of a sum of Rs. 2,70,000 in their hands to the credit of Tirunavukkarasu Chettiar (first respondent) and directing them to pay the said sum instead to the applicant on behalf of Kaleeswarar Mills, Limited. The learned Judge (Venkatadri, J.) after setting forth the facts in considerable detail, held that the sole remedy available to the Official Liquidator, in the light of the history of these matters, was to take possession of all the shares purchased by Tirunavukkarasu (first respondent) from and out of the funds of Kaleeswarar Mills, Limited (in liquidation), while he was the Managing Administrator of that Company ; as 20,000 shares had been already sold, under orders of Court and moneys realised, the remedy still available to the Official Liquidator was only to proceed against Tirunavakkarasu for criminal breach of trust, and deliberate flouting of the Court’s orders concerning his utilisation of certain funds of the Kaleeswarar Mills, which were entrusted to him. Upon the doctrine of election, following certain observation? of Jessel, M.R. in In re Hallett’s Estate1, the learned Judge was of the view that the Official Liquidator had elected to pursue the property of the beneficiary, Kaleeswarar Mills, Limited, wrongfully converted to other uses by the fiduciary, Tirunavukkarasu Chettiar (first respondent), in the form of shares, to which we have just made reference. Having done this, the Official Liquidator could not pursue the moneys retained by the Trust, or the moneys standing to the credit of the first respondent with the Textiles. Having done this, the Official Liquidator could not pursue the moneys retained by the Trust, or the moneys standing to the credit of the first respondent with the Textiles. The Official Liquidator was also entitled to proceed against the remaining 13,500 shares, namely, out of the total of 33,500 shares, 20,000 shares sold under orders of Court and the balance of 13,500 shares delivered by Tirunavukkarasu Chettiar (first respondent) as pledges etc. to third parties, by taking appropriate proceedings against the holders of those shares. For the rest, the applications were dismissed. The present appeals, Original Side Appeals Nos. 45 and 46 of 1962, against the judgment of Venkatadri, J., are being pressed not by the Official Liquidator but pursuant to further developments in this matter, by the Board of Directors administering the Kaleeswarar Mills, Limited, as a going concern, under the scheme recognised and ordered by this Court. Original Side Appeal No. 71 of 1962 covers the same ground but the appellant, here, Somasundaram Mills (P.), Ltd., was the third respondent in Company Application No. 398 of 1960 before the learned Judge. The issues that arise for determination in these appeals may be tersely set forth in the following form: (i) Can the judgment of the learned Judge be upheld that the Board of Directors on behalf of the Kaleeswarar Mills, Limited, is powerless, either upon the doctrine of tracing or with reference to garnishee proceedings, to attempt to recover any further moneys from the trust or the Textiles, because of the application of the doctrine of election to the facts of the case ? (ii) Assuming that that doctrine does not apply to prevent the Board from pursuing further remedies, can it pursue further remedies against the Trust, in the light of the established facts on the record ? (iii) Similarly, can the Board pursue any further remedies against the Textiles,, with the Trust necessarily impleaded as a party to the proceedings, with regard to the moneys now with the Textiles, standing in their books, to this date, to the debit of Tirunavakkarasu Chettiar (first respondent) ? For the sake of brevity, we propose to condense a great deal of the previous history. We may commence with the intrusion of AL. SP. P.L. Tiranavukkarasu Chettiar (first respondent) in the Liquidation Proceedings, under orders of Court, as the Managing Administrator. For the sake of brevity, we propose to condense a great deal of the previous history. We may commence with the intrusion of AL. SP. P.L. Tiranavukkarasu Chettiar (first respondent) in the Liquidation Proceedings, under orders of Court, as the Managing Administrator. The learned Judge then seized of the matter (Ramachandra Ayyar, J., as he then was) passed an order, dated 28th August, 1959, approving of a scheme submitted to Court, and he appointed three persons as a Council of Administrators with Tirunavukkarasu Chettiar as the Managing Administrator. In pursuance of the scheme, Tirunavukkarasu Chettiar deposited into Court Rs. 3,00,000 on 17th September, 1959, and later submitted a list of unsecured creditors of the Kaleeswarar Mills, Limited. On 18th December, 1959, Ramaswami, J., passed an order directing the payment out of Rs. 3,00,000 to. Tirunavukkarasu Chettiar and also directing that, on such payment, Tirunavakkarasu Chettiar should keep the same under a separate current account for payment to the creditors specified in the Schedule of a Report filed on 18th December, 1959. Tirunavukkarasu Chettiar, despite these orders, encashed the cheque through his personal account in the Indian Bank, Limited, Coimbatore. Also, he did not pay the dividends to the unsecured creditors under the orders of Court. Subsequently, the affairs of the mills were investigated under section 237 (a) (ii) of the Companies Act, 1956, and, largely as a result of the discoveries made by this investigation, Tirunavukkarasu Chettiar was discharged from the office of Managing Administrator, his properties were attached, and the Official Liquidator placed in charge of the affairs of the company. In brief, Tirunavukkarasu Chettiar committed acts of misappropriation and diversion of the funds of the company (in liquidation) to private uses, in several ways. Out of the sum of Rs. 3,00,000 entrusted to him, he advanced Rs. 2,00,000 to one PS. AR. SL. Subramaniam Chettiar, associated as partner in his own family business, for personal uses. Again, he advanced large sums to the said Subramaniam Chettiar for supply of cotton, totals aggregating to about Rs. 7,00,000, against which cotton worth about Rs. 3,00,000 only was supplied. Thus, a sum of about Rs. 7,00,000 of the funds of the company (Mills), had been used or diverted by Tirunavakkarasu Chettiar for his personal benefit. Again, he advanced large sums to the said Subramaniam Chettiar for supply of cotton, totals aggregating to about Rs. 7,00,000, against which cotton worth about Rs. 3,00,000 only was supplied. Thus, a sum of about Rs. 7,00,000 of the funds of the company (Mills), had been used or diverted by Tirunavakkarasu Chettiar for his personal benefit. It is against this background that we have to appreciate certain events, which bring both the Trust and the Textiles into this picture of diversion by a fiduciary, of large sums of money belonging to the beneficiary, the mills. The evidence tends to show that Tirunavakkarasu Chettiar (first respondent) kept up a facade of prosperity, and that, until the exposure of the real state of affairs, he was taken to be a person of considerable business worth and credit in his own right. On 11th January, 1960, an agreement was executed between Tirunavakkarasu Chettiar and the Trust for sale of 1,22,057 ordinary shares of Rs. 10 each, and 865 preference shares of Rs. 100 each, held by the Trust in Textiles (Alagappa Textiles (Cochin), Limited).. As the terms of this agreement are of importance, and much turns upon the interpretation of the character of this agreement, we shall briefly set forth the relevant terms. Out of the total consideration of Rs. 29,35,001, (a) Rs. 50,000 constituted an advance; (b) Rs. 12,39,001 had to be paid within one month; to facilitate this, twelve bills or hundis were drawn on 16th January, 1960, by the Trust in favour of United Commercial Bank on Tirunavakkarasu Chettiar; (c) Rs. 6,00,000 to be paid within one year with interest secured on ordinary shares of the face value of Rs. 2,70,000 ; (d) Rs. 7,26,000 to be paid to Textiles for certain debts due by the Trust to the Textiles ; and (e) Rs. 3,20,000 to be paid to Textiles for moneys due by Ashoka Charitable Trust, a sister concern of the Trust. The payments actually made by Tiranavakkarasu Chettiar (first respondent) under this agreement, are claimed to be the following by the Trust and the Textiles ; (a) Rs. 50,00,000 paid as advance ; (6) Rs. 4,00,000 paid to United Commercial Bank against four bills out of the twelve "bills referred to in item (b) above. Against this, 33,500 ordinary shares were received by Tirunavakkarasu Chettiar, with blank transfers, from United Commercial Bank (c) Rs. 2,71,159-42 nP. 50,00,000 paid as advance ; (6) Rs. 4,00,000 paid to United Commercial Bank against four bills out of the twelve "bills referred to in item (b) above. Against this, 33,500 ordinary shares were received by Tirunavakkarasu Chettiar, with blank transfers, from United Commercial Bank (c) Rs. 2,71,159-42 nP. paid to Textiles, or deposited with Textiles, by Tirunavakkarassu Chettiar (first respondent). There is acute controversy between the parties, whether this represented the independent moneys of Tirunavukkarasu Chettiar kept with Textiles, or was a payment made in pursuance of the agreement. According to the Trust and Textiles, the totals of payments by Chettiar thus aggregate to Rs. 7,21,159-42 nP. We are now in a position to understand the circumstances under which the Board of Directors, succeeding to the Official Liquidator, has attempted to pursue these moneys, respectively ,with the Trust and the Textiles, mainly upon the doctrine of the tracing of trust moneys by a beneficiary, though such moneys might have come into the hands of third parties, who received them from the erring fiduciary ; in other words, what has sometimes been termed, the rule of trust pursuit, (vide American Jurisprudence, Volume LIV, paragraph 248). We shall first give a condensed account of what really happened subsequent to the agreement. According to the agreement, the ordinary shares were valued at Rs. 23-34, per share, and the details are given in the counter-affidavit filed on behalf of the Trust in Civil Miscellaneous Petition Nos. 8275 and 8276 of 1963 before us. The Official Liquidator, upon coming to know of the developments subsequent to the agreement, began correspondence with the Trust, claiming that the Trust could not retain the moneys paid by Tirunavukkarasu Chettiar (first respondent). It must be here emphasised, that throughout the protracted and somewhat intricate history of the developments, one fact at least emerges crystal-clear. The first respondent had no moneys of his own, and the facade of worth and credit which he put up, was sham; throughout all these dealings, he was converting to his own use moneys of the beneficiary (the mills) of which he had come into possession as Managing Administrator. The Trust originally took up the position that the 33,500 shares, transferred through the United Commercial Bank, had not in law passed to Chettiar (first respondent) and hence that the Trust could retain the money in spite of the demands of the Official Liquidator. The Trust originally took up the position that the 33,500 shares, transferred through the United Commercial Bank, had not in law passed to Chettiar (first respondent) and hence that the Trust could retain the money in spite of the demands of the Official Liquidator. Later, the Trust advisedly, when it found that it could not lay claim both to the transferred’ scrip and to the moneys it had received, took up the position that it advanced no claim to the 20,000 shares attached under orders of Court. Out of 33,500 shares, as we have earlier pointed out, 13,500 shares had been placed in the hands of third parties as pledgees by Chettiar (first respondent), and the Official Liquidator could lay hold on 20,000 shares alone. On 3rd February, 1961, Ramakrishnan, J., passed an order allowing the third prayer in the petition before him, with regard to delivery of the shares, as the Trust had not pressed its claim. The liquidator applied for the sale of the 20,000 shares, and, pursuant to a later order of Kailasam, J., the shares were sold at Rs. 9 each in acceptance of an offer by a concern under the proprietorship of a third party, Mr. Karumuthu Thyagaraja Chettiar. It may be here convenient to refer to our orders in Civil Miscellaneous Petition Nos. 8275 and 8276 of 1963, by which we have allowed certain amendments, in the interests of justice. That order will really have to be read as part of this judgment since it may be cumbersome and superfluous to reproduce it here Therein, we have given our grounds for the view why we have permitted the Board of Directors, as representing the Mills, to enlarge the pleadings so that, in virtual effect the Board could claim moneys retained by the Trust, upon the doctrine of tracing and the sum of Rs. 2,71,000 odd with Textiles, in the name of Chettiar (first respondent) also, upon the alternative grounds of garnishee proceedings and the trust pursuit rule. 2,71,000 odd with Textiles, in the name of Chettiar (first respondent) also, upon the alternative grounds of garnishee proceedings and the trust pursuit rule. It now remains for us to consider (1) whether the dismissal of the applications by the learned Judge (Venkatadri, J.), upon the doctrine of election could be upheld, and (ii) whether, on the contrary, the Board of Directors should now be permitted to pursue further remedies, either with regard to the moneys retained by the Trust; or moneys with the Textiles or both, and if so, to what extent. We shall quite briefly set forth why, in our view, the dismissal of the applications before the learned Judge, on the doctrine of election, except, as held by the learned Judge, to the extent of proceeding against Chettiar (first respondent) and the balance of 13,500 shares in the hands of third parties, cannot be sustained. In order to appreciate this, it is necessary to examine the actual implications of the doctrine of election, in regard to facts of this kind, and also to scrutinise how far the dicta in In re Hallett’s Estate1, are truly relevant to the present situation. As observed in Halsbury’s Laws of England (third edition) Volume XIV, paragraph 1104 (page 596): “Election is a question of fact, and must be ascertained as such. It may be express, or may be implied from the acts of the person bound to elect. As observed in Halsbury’s Laws of England (third edition) Volume XIV, paragraph 1104 (page 596): “Election is a question of fact, and must be ascertained as such. It may be express, or may be implied from the acts of the person bound to elect. To constitute an implied election, there must be clear proof that the person put to his election was aware of the nature and extent of his rights ; and that, having that knowledge, he intended to elect.” The principle, in In re Hallett’s Estate1, on this particular aspect, has been stated in Halsbury (Ibid) at page 630 in the following form: “If the proceeds have been invested, without the addition of further money, in the purchase of other property, the beneficial owner has the right to elect either to take the property purchased or to have a charge on it for the amount of the trust money.” Venkatadri, J., was of the view that both the doctrine of election and the principles expressed above in In re Halletts Estate1applied to the present situation, in the sense that the liquidator could either pursue the 33,500 shares, or the money received and retained respectively by the Trust and the Textiles, but not both ; having elected to pursue the shares,and realised moneys by sale of 20,000 shares, the remedies against those who had received moneys from the fiduciary (first respondent) under the agreement, were automatically extinguished. But the learned Judge has not referred to the history of these developments, as they appear in the correspondence, the petitions before Court, and the several orders of Court, as set forth in volume I of the typed papers. We have scrutinised these documents with care, and we have been taken through them in the course of protracted arguments by learned Counsel for the parties. We have no doubt, whatever about one major factor. Throughout, in corresponding with the Trust, and in attempting to trace the moneys of the beneficiary (Mills) with the Trust, or to sell the attached shares, the liquidator was acting under the consciousness that the Trust had received Rs. 4,40,000 and parted with the shares in favour of the first respondent. The true facts concerning the additional sum of Rs. Throughout, in corresponding with the Trust, and in attempting to trace the moneys of the beneficiary (Mills) with the Trust, or to sell the attached shares, the liquidator was acting under the consciousness that the Trust had received Rs. 4,40,000 and parted with the shares in favour of the first respondent. The true facts concerning the additional sum of Rs. 2,71,159-42 nP., also representing moneys of the beneficiary, kept by the erring fiduciary (first respondent) with the Textiles, came to light at a definitely later stage, and had nothing to do with any earlier election by the liquidator, express or implied. ‘Thus, if there was any implied election at all, the liquidator chose to pursue the available shares (20,000), instead of the equivalent the beneficiary’s moneys received by the Trust ; even here, he does not appear to have intended to proceed against the remaining 13,500 shares in the hands of others, and indeed, he could not pursue those shares. In the context of those incontrovertible facts, it is impossible to hold that the doctrine of election estops the Board from further progress under the trust pursuit rule. That doctrine, as we have seen, implies a knowledge of alternatives, and a choice of one of two alternatives. That is not the case here. Even in a minimal view for the Board of Directors, that would not apply to moneys with the Textiles, and may not apply even with regard to the moneys with the Trust, over and above the actually realised value of the shares sold under orders of Court. The point here is that the principle in In re Hallett’s Estate1, relates to a clear and sharp conversion of trust moneys into other forms of property, the pursuing beneficiary having knowledge of the conversion, and a choice of alternatives. That cannot be the case where, for instance, there has been a partial conversion, to a limited extent and the beneficiary seizes the property so made available under the trust pursuit rule; that does not imply that his claim to the balance of funds, not embodied in some other form of property, is also lost. For these reasons, it seems clear that the disposal of the proceedings by the learned Judge (Venkatadri, J.), cannot be sustained. For these reasons, it seems clear that the disposal of the proceedings by the learned Judge (Venkatadri, J.), cannot be sustained. The more difficult question which has required anxious consideration at our hands is, whether the Board of Directors can now be permitted to pursue remedies against the Trust, and if so, to what extent. Next comes the question, whether the Board can similarly pursue remedies against the Textiles with regard to the sum of Rs. 2,71,159-42 nP. retained with the Textiles, allegedly under the agreement, to the account of Chettiar (first respondent). If this is to be permitted, the further question arises what investigation of this aspect is now called for, (i) treating the relief claimed by the Board of Directors as in the nature of garnishee proceedings, and (ii) under the trust pursuit rule ? As far as the Trust is concerned, we are thoroughly satisfied upon a very careful investigation of this aspect, that it will not be equitable, or justified upon the facts and the principles, to permit the Board of Directors to pursue moneys in the hands of the Trust any further, under the trust pursuit rule. Mr. Govind Swaminathan, for the Board has disputed the proposition that the Trust acted bona fide, without notice of the beneficiary’s title to the moneys. He has offered certain reasons why the trust should have suspected that the Chettiar (first respondent) was not likely to have made these payments, from his own resources. But we are totally unable to impute this knowledge to the Trust, in the light of the documents of record. We are thoroughly satisfied that the Trust acted bona fide, accepting the facade of credit and worth presented by Chettiar (first respondent), and genuinely believed that the agreement would be implemented by him. Actually, the records show that even prior to establishing contact with Chettiar (first respondent) the Board of Trustees in Administration of the Trust, consisting of persons of eminence in public life and worth, had met and agreed that the sale of the holdings of the Trust in Alagappa Textiles (Cochin) Ltd., should be resorted to as a measure of prudence. It was in implementation of this pre-determined policy that the agreement with Chettiar (first respondent) was finally entered into. The arguments of Mr. V. Thyagarajan, for the Trust, could be expressed in the following form. It was in implementation of this pre-determined policy that the agreement with Chettiar (first respondent) was finally entered into. The arguments of Mr. V. Thyagarajan, for the Trust, could be expressed in the following form. Viewing the matter purely as a contract between the Trust and Chettiar (first respondent), title in the shares had passed to the first respondent by virtue of the established facts. The shares are goods within the meaning of the Indian Sale of Goods Act, 1930: vide section 2 (7). The delivery of share certificates with blank transfers signed by the transferor, amounts to conveyance of good title in the shares to the purchaser, and registry of shares is not necessary for vesting title: Maneckji Pestonji Bharucha v. Wadilal Sarabhai & Company1, also Arjun Prasad v. Central Bank of India2. Where there is a breach of contract, as has undoubtedly occurred here, by the action of the first respondent in failing to implement the agreement, unless restitution in intergrum is possible, the party who stands to lose will be entitled only to compensation. Further, the purchaser should pay, to the extent to which he has taken delivery of goods: Govindram Seksaria v. Edward Radbone3, per contra , on this aspects, Mr. Govind Swaminathan contends, on the authority of Muralidhar Chatterjee v. International Film Co., Ltd.4, that if the contract is broken by the purchaser before the completion of the contract, the amounts paid by him can only be treated as advance, or benefit received by the vendor, which the vendor is bound to return, section 64 of the Contract Act being applicable. It is also contended by Mr. Govind Swaminathan, on behalf of the Board, that the company (mills) can step into the shoes of the Chettiar (first respondent) to a limited extent, and that there is no need to affirm the contract in its entirety. Integral restitution by bringing back the shares sold, or making available the value of the shares, according to the contract or agreement rate, is not essential. But Mr. Thyagarajan relies upon section 37(1) of the Sale of Goods Act, for the position that the buyer, having accepted the goods (shares), and dealt with them as owner by pledge, or sale, he or his successor-in-interest, or even any beneficiary claiming in respect of his rights, is bound to pay at the contract rate for the goods. But Mr. Thyagarajan relies upon section 37(1) of the Sale of Goods Act, for the position that the buyer, having accepted the goods (shares), and dealt with them as owner by pledge, or sale, he or his successor-in-interest, or even any beneficiary claiming in respect of his rights, is bound to pay at the contract rate for the goods. On this aspect, we do not propose to give a conclusive finding on the mutual rights of parties, for it seems clear to us, that the Board is estopped from further pursuit of moneys, as against the Trust, upon far more sufficing and adequate grounds. Even on this restricted aspect, there is much to be said for the view that an integral restitution would have to be performed by the Board, before it could seek to recover moneys which have come into the hands of the Trust, under the agreement, and to the extent to which parties had implemented it. There can be no doubt that property in the shares had passed to Chettiar (first respondent), and that if the Board now claims to affirm the agreement, as successor-in-interest of the first respondent, in one sense, the Board may also have to assume all the obligations which the first respondent failed to fulfil. But the far more important ground is that the Trust is undoubtedly a transferee for valuable consideration, without notice of the claims of the beneficiary, as far as the moneys received by it from Chettiar (first respondent) are concerned. The authorities are abundantly clear that, with reference to such funds, the beneficiary must stop short of further pursuit. The beneficiary cannot recover moneys, whether obtained by fraud or misuse by a fiduciary, which are in the hands of persons who are alienees for valuable consideration, without notice of the fraud or the trust. The following authorities are adequate to show this, (i) 38 Halsbury (Simonds edition) page 859, paragraph 1447, (ii) 14 Halsbury, page 628, paragraph 1163. The beneficiary cannot recover moneys, whether obtained by fraud or misuse by a fiduciary, which are in the hands of persons who are alienees for valuable consideration, without notice of the fraud or the trust. The following authorities are adequate to show this, (i) 38 Halsbury (Simonds edition) page 859, paragraph 1447, (ii) 14 Halsbury, page 628, paragraph 1163. (iii) Lewin on Trusts, fifteenth edition, page 733, (iv) Diplock’s case1where it was held that if claimant’s moneys are handed by way of transfer to a person who takes for value without notice of the claimant’s equity, the claim (like all equitable claims in like circumstances) is extinguished, (v) Observations of Lord Denning in Nelson v. Larholt2, that money taken from the true owner can be traced or recovered from the person to whom it is paid, until it reaches one who receives it in good faith, and for value, without notice of the want of authority, (vi) Equity will follow the trust money only to the extent to which it can be identified ; if there is a mingling which makes identification impossible, tracing cannot be further pursued. James Roscow (Bolton) Limited v. Winder3. Also Diplock’s case1. The principles, so stated, are not disputed by learned Counsel for the Board, Mr. Govind Swaminathan. He relies on Nelson v. Larholt2, and section 63 of the Trusts Act for the proposition that moneys belonging to the beneficiary could be traced in the hands not merely of one person ,but of any number of persons. But he would concede that a bona fide transferee for value, without notice of the trust, is indisputably protected: see section 64 of the Trusts Act. His contention is that the original contract between the Trust and Chettiar (first respondent), which was indivisible, had been converted into one for payment in instalments, and delivery of shares in instalments. The Trust did not put an end to the contract at any time before 20th June, 1960. In such a case, according to law, the payments can be considered as advances paid by Chettiar (first respondent), and, if he commits default, as the buyer, he can recover the payments subject to any cross-claims by the Trust for damages for breach of contract: Chitty on Contracts, volume I, paragraph 1400. In such a case, according to law, the payments can be considered as advances paid by Chettiar (first respondent), and, if he commits default, as the buyer, he can recover the payments subject to any cross-claims by the Trust for damages for breach of contract: Chitty on Contracts, volume I, paragraph 1400. But, here again, we must emphasise that, apart from the trust pursuit rule, we are quite unable to see how the Board of Directors could now claim moneys from the Trust, without making intergal restitution, and without accepting liability for all the mutual rights and obligations "between the parties under the original agreement. That the Board is, admittedly, in no position to do. Upon the trust pursuit principle, we have no doubt whatever the Trust is protected as a bona fide transferee for value, without notice of the beneficiary’s rights in respect of the moneys which have come into the hands of the Trust, as paid by the erring fiduciary (first respondent). This makes it clear that all that we have got to consider is the rival cases of the parties, with regard to the moneys retained by the Textiles. The point here is, how far should the Board of Directors be now permitted to further pursue this matter, and what investigation is required before the remedy, if any, can be ascertained and worked out. Certain powerful arguments have been marshalled both by learned Counsel for the Trust and learned Counsel for the Textiles, in support of the proposition that the amount of Rs. 2,71,159-42 nP. with the Textiles is only part of Rs. 7,21,159-42 nP. paid by the first respondent under the agreement. As we have seen, one term of the agreement was that Rs. 7,26,000 should be paid by Chettiar (first respondent) to Textiles, for debts due by the Trust to the Textiles. The following prices of evidence are relied upon, in support of the contention that the amount of Rs. 2,71,15942 nP. can be traced only to a payment under agreement, and to no other source, (i) The letter of the lawyer of the Trust to Chettiar, dated 6th April, 1960, making an averment with regard to Rs. 7,21,159-42 nP. which necessarily includes Rs. 2,71,159-42 nP. (ii) Similar letter of the lawyer of the Trust to the Official Liquidator, dated 4th August, 1960. 7,21,159-42 nP. which necessarily includes Rs. 2,71,159-42 nP. (ii) Similar letter of the lawyer of the Trust to the Official Liquidator, dated 4th August, 1960. (iii) Letter of the Official Liquidator, dated 25th August, 1960, reiterating the averment with regard to Rs. 7,21,159-42 nP. and claiming that the Trust was not entitled to retain those moneys, (iv) The letter of the lawyer of the Trust to the Official Liquidator, dated 3rd September, 1960. (v) Report of the Official Liquidator dated 16th September, 1960, again making reference to the amount of Rs. 7,21,159-42 nP. (vi) Statement of the learned Judge (Venkatadri, J.) himself to the effect that Rs. 2,71,159-42 nP. was paid by Chettiar (first respondent) in pursuance of the agreement in the course of the judgment. Other documents, emphasising the same circumstances, are applications by the Trust to be impleaded as a party in Company Application No. 123 of 1961, the counter-affidavit of the Trust in Company Application No. 123 of 1961, and absence of any contention on behalf of the Liquidator that Rs.2,71,159-42 nP. was not paid in pursuance of the agreement. Per contra, Mr. Govind Swaminathan for the Board places considerable reliance on two indisputable features. The first is that in the accounts of Textiles, the amount of Rs. 2,71,159-42 nP. had never been appropriated to the credit of the Textiles, as a debt due by the Trust and paid by Chettiar (first respondent) under the agreement. On the contrary, to this date, the amount is shown as moneys standing to the credit of the first respondent Chettiar. The second is the equally incontrovertible fact that the amount itself was arrived at as a balance struck, after debits succeeding the payment through credit from the Bank of Mysore of Rs. 2,52,677-05 nP. on 13th February (Page 115 of volume I of the typed papers). The entire ledger entries, according to the learned Counsel, are quite incompatible with the interpretation that this could be money paid, by Chettiar (first respondent) under the agreement, on behalf of the Trust, as a debt due from the Trust to the Textiles. We do not propose to go into this matter at any further length, for an important reason. The entire ledger entries, according to the learned Counsel, are quite incompatible with the interpretation that this could be money paid, by Chettiar (first respondent) under the agreement, on behalf of the Trust, as a debt due from the Trust to the Textiles. We do not propose to go into this matter at any further length, for an important reason. It seems clear to us, that, since we are unable to uphold the disposal of the applications by the learned Judge on the doctrine of election, at least as far as this matter of tracing of moneys kept by the Textiles is concerned, further investigation and even recording of evidence have become essential. The first respondent is a party to these proceedings. We are reliably informed that he has instituted a suit in a Court in Kerala State for recovery of Rs. 2,71,000 odd, claiming the moneys to be a deposit of his private funds. The Textiles have been restrained by means of an interim injunction from payment of these moneys or appropriation of them in any manner, pending final adjudication. Upon the claim of the Board on the footing of garnishee, the Textiles have raised the plea that the Court had no jurisdiction, since Textiles had their business headquarters outside the limits of Madras State, with specified reference to sections 634 and 635 of the Companies Act and Order 40, rule 1 of the Original Side Rules. Also, see Begg Dunlop &38; Co. v. Jagannath Marwari1. They further claim a lien on the 20,000 shares under Article 27 of the Articles of their concern. They point out that the order for the sale of the shares was without prejudice to the rights of the Textiles, and that the lien will also attach to the remaining 13,500 shares. Venkatadri, J., did not go into the question of alleged want of jurisdiction of this Court treating the matter as a garnishee proceeding. We have held, in our order in Civil Miscellaneous Petition Nos. 8275 and 8276 of 1963, that we are unable to agree that “the company Court will not have jurisdiction under section 446(2) to call upon the third party creditor to stay his hands.” But that was for the restricted purpose of allowing the amendments prayed for, and the matter may have to be further gone into. Mr. 8275 and 8276 of 1963, that we are unable to agree that “the company Court will not have jurisdiction under section 446(2) to call upon the third party creditor to stay his hands.” But that was for the restricted purpose of allowing the amendments prayed for, and the matter may have to be further gone into. Mr. Govind Swaminathan for the Board contends that the lien on the shares of the Textiles was lost, because of the pledge by the Trust with the United Commercial Bank. All these matters will have to be examined, with reference to the fundamental basis, whether the sum of Rs. 2,71,159 odd represents moneys paid by Chettiar (first respondent) to Textiles under the agreement, or is an independent deposit of some kind. Chettiar (first respondent) may himself have to be examined, and other evidence recorded. Since these matters were not at all gone into, by this Court, in exercise of its Original Jurisdiction, we refrain from further comment. Accordingly, we allow the appeals, and remit the entire proceedings for further enquiry and disposal upon those aspects which we have not concluded by our explicit findings above. The enquiry should, therefore, be restricted to the claim by the Board of Directors for Rs. 2,71,000 held by the Textiles to the credit of Chettiar (first respondent). Parties to bear their own costs. ------------ Appeals allowed. Proceedings remitted for further enquiry.