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Issues Involved:
1. Validity of the forfeiture of shares by the appellant company. 2. Compliance with the Articles of Association and statutory requirements. 3. Jurisdiction of the company court to set aside the forfeiture. 4. Alleged delay and laches by the shareholders in seeking relief. 5. Bona fides of the shareholders' actions. Detailed Analysis: 1. Validity of the Forfeiture of Shares: The primary issue in these appeals is whether the appellant company complied strictly with the provisions of the Articles in forfeiting the shares of the respondents. The company issued a call notice on 3-1-1957, followed by a notice on 20-1-1957, demanding payment of the call amount with interest and expenses. The respondents argued that the notice was defective, vague, and did not comply with the strict requirements of the Act, specifically failing to specify the amount of interest payable and the expenses incurred. The court held that "the notice dated 20-1-1957 was not a proper notice and it was defective" and thus invalidated the forfeiture. 2. Compliance with the Articles of Association and Statutory Requirements: The court emphasized that "the power of forfeiting the shares is not inherent in a company" and must be exercised strictly in accordance with the Articles of Association and statutory requirements. The notice issued by the company lacked details regarding the interest claimed and expenses incurred, making it "vague and defective." The court cited several precedents, including Premila Devi v. Peoples Bank of Northern India, highlighting that "technicalities must be strictly observed" in forfeiture matters. The court concluded that the company failed to comply with the procedural requirements, rendering the forfeiture invalid. 3. Jurisdiction of the Company Court to Set Aside the Forfeiture: The appellant company contended that the company court lacked jurisdiction to set aside the forfeiture in a summary proceeding for rectification of the share register. However, the court held that under Section 155(1) of the Companies Act, the court has the jurisdiction to rectify the register if a shareholder's name is omitted without sufficient cause. The court referred to Palmer's Company Law and the Privy Council's decision in Premila Devi's case, affirming that the court can set aside an invalid forfeiture in rectification proceedings. 4. Alleged Delay and Laches by the Shareholders in Seeking Relief: The appellant argued that the shareholders delayed seeking relief, constituting laches. The court rejected this argument, noting that the shareholders were "always active and vigilant in protecting their shares," filing applications promptly after receiving the call notice. The court found no evidence of acquiescence, waiver, or estoppel on the part of the shareholders, emphasizing that "mere laches would not disentitle him to equitable relief." 5. Bona Fides of the Shareholders' Actions: The appellant company alleged that the shareholders' actions were not bona fide and were intended to cripple the company. While acknowledging the shareholders' potentially ulterior motives, the court stated that it was not called upon to consider the bona fides in the present proceedings. The court's focus was on the validity of the forfeiture, concluding that the shareholders were entitled to relief on technical grounds, despite their conduct not being above board. Conclusion: The court dismissed the appeals, holding that the forfeiture of shares was invalid due to non-compliance with procedural requirements. The shareholders were allowed to pay the call money with interest, and their names were to be restored in the share register. The court directed the respondents to pay costs to the appellant company.
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