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Issues Involved:
1. Locus standi of the plaintiff to impeach the resolution passed by the defendant forfeiting the shares held by the Alwaye company. 2. Validity of the forfeiture of the shares of the Alwaye company by the defendant. 3. Entitlement of the plaintiff to claim the sum of Rs. 45,000 paid by them. 4. Whether the suit is barred by limitation. Detailed Analysis: 1. Locus Standi of the Plaintiff: The claim of Rs. 90,000 as damages is based on the plaintiff's acquisition of title to the 900 shares held by the Alwaye company. The plaintiff relied on exhibits P-2 to P-6 to establish this title. However, the court found that exhibits P-5 and P-6, which included a blank transfer form and the share certificate, did not confer legal ownership to the plaintiff as the transfer was not registered in the company's books. The court stated, "a transferee of shares under blank transfer whose name is not registered in the books of the company is not the legal owner of the shares." Therefore, the plaintiff had no right to impeach the forfeiture of the shares without being registered as the owner. 2. Validity of the Forfeiture: The court examined the resolutions and notices issued by the defendant regarding the forfeiture. The relevant articles of association required specific procedures for forfeiture, including notice to the shareholder and a subsequent resolution if the payment was not made. The court found that the resolution in exhibit D-29(e) did not constitute a valid forfeiture resolution as it merely authorized the issuance of notices and did not itself effect forfeiture. The court stated, "exhibit D-29(e) is not a resolution forfeiting the shares but only authorizes the officers of the defendant to issue the notice in terms of article 43 of exhibit D-10." The defendant's subsequent actions and documents, including exhibit D-37, confirmed that they did not treat exhibit D-29(e) as a forfeiture resolution. 3. Entitlement to Claim Rs. 45,000: The plaintiff had paid Rs. 45,000 to the defendant under a contract to waive the forfeiture of the shares. The court found that the plaintiff defaulted on the conditions of the contract, but the defendant did not have the right to retain the money as it was not paid towards the discharge of the Alwaye company's liability. The court stated, "When the plaintiff committed default in the performance of the contract and when it was rescinded by the defendant, the latter is bound to return the sum of Rs. 45,000." The court held that the plaintiff was entitled to the return of the sum with interest at the rate of 5% per annum from the date of the suit. 4. Limitation: The court addressed the issue of limitation by noting that the cause of action for the return of the amount paid by the plaintiff arose only after the contract was rescinded by the sale of the shares to a third party. The suit was filed within three years of the sale, and therefore, it was not barred by limitation. The court stated, "The suit having been filed within three years thereof is not barred by limitation." Conclusion: The decree passed by the lower court was modified. The plaintiff was granted a decree for the recovery of Rs. 45,000 with interest at the rate of 5% per annum from the date of the suit until recovery. The appeal was allowed to this extent and dismissed otherwise, with each party bearing their own costs.
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