9911796707
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Issues:
Recovery of dividends on shares with interest, fiduciary duty of managing director in share sale, contractual terms regarding dividends, admissibility of oral evidence to prove contract terms, entitlement to dividends post share sale. Analysis: The judgment pertains to an appeal by the defendants challenging the decree of the lower courts in a suit for the recovery of dividends on shares with interest. The plaintiff, a firm, authorized the defendant company to sell its shares but not the dividends accrued. The managing director of the defendant company, who was involved in the negotiation, was deemed to have a fiduciary duty due to the company's limited liability status. The court emphasized the need for utmost good faith in such transactions. The defendant company, after purchasing the shares in the name of the managing director's minor sons, attempted to appropriate the dividends, contrary to the terms agreed upon with the plaintiff. The court found that the defendant's actions, including ignoring correspondence and passing resolutions post-sale, were not valid to deprive the plaintiff of the dividends rightfully due. Regarding the admissibility of oral evidence to prove contract terms, the court held that when a written document does not encompass the entire agreement, oral evidence to establish additional terms consistent with the written instrument is admissible. The trial court's decision to admit such evidence was deemed justified and in line with the Evidence Act. The judgment also delved into the legal principles concerning the sale of shares and entitlement to dividends. While dividends are typically considered part of shares sold, a special agreement can exclude dividends from the sale. The court cited a precedent where a purchaser was entitled to dividends declared post-sale due to the lack of contractual stipulation otherwise. Ultimately, the court ruled in favor of the plaintiff, asserting that the defendant company had no right to withhold or pay the dividends to the purchaser post-share sale. The appeal was dismissed, with costs awarded to the plaintiff. The judgment reinforced the importance of upholding contractual terms, fiduciary duties, and legal principles governing share sales and dividend entitlement post-sale.
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