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Validity of share applications for Central India Press Ltd. Revocation of share proposal under section 6(2) of the Contract Act. Validity of Share Applications: The case involved applications for shares in the Central India Press Ltd., where the defendants failed to pay the amounts due after allotment. The main contention was whether the applications for shares were legal and constituted a valid offer. The Companies Act, 1913, specified that the amount payable on application for each share should be at least 5% of the nominal amount of the share. The court referred to Mutual Bank of India v. Sohan Singh, stating that any allotment made without the required payment is invalid. It was held that the statutory obligation to pay 5% of the nominal amount of the share is mandatory, and any allotment without compliance is against public policy. Therefore, the applications were deemed invalid, and the Company could not demand share money subsequently. Revocation of Share Proposal: The defendants argued that the proposal for shares was revoked due to the lapse of a reasonable time without communication of acceptance. Citing Ramsgale Hotel Co. v. Montefiore, the court discussed that if the proposer revokes the offer before acceptance, section 6(1) of the Contract Act applies. In this case, there was no allegation that intimation of enrollment was sent to the defendants before the demand for payment. The court held that section 6(2) applied, revoking the proposal, as there was no communication of acceptance before the specified date. The defendants' failure to protest until payment was demanded did not amount to waiver. Therefore, the proposal was deemed revoked in three of the revision applications, and no money could be recovered as there was no valid contract established. Conclusion: The court allowed the revision applications, dismissing the suits, and awarded costs to the defendants. The reasons given by the lower court for the delay in payment were deemed irrelevant, and it was emphasized that the applications were invalid due to non-compliance with statutory requirements. The court held that the Company could not benefit from its own wrongdoing by demanding share money after an invalid allotment. The judgment highlighted the importance of compliance with legal provisions in share allotments and the significance of timely communication in accepting proposals.
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