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TMI Blog1938 (1) TMI 18X X X X Extracts X X X X X X X X Extracts X X X X ..... challenged that shortly after the execution of the power David left India for England, or that he visited India and spent some months in Calcutta every succeeding cold season up to and including that of 1934-1935. According to the plaintiff, David left India for the last time in March, 1935, and has never returned. The defendants however do not admit this. Admittedly David has a strong motive for not returning. In March 1936, proceedings were instituted against him and various other persons in the Criminal Courts at Alipore, wherein he was charged with offences punishable under the Penal Code and Excise Act. In the course of the criminal proceedings, David has been proclaimed an absconder under Section 87, Criminal Procedure Code, and under Section 88 his property, including the 16,800 shares in the defendant company, has been attached. The Official Receiver of this Court is now in possession of the share certificates, as receiver appointed by the Criminal Court under Section 88 (3) ( b ) by an order dated 17th June, 1936. When the share certificates were seized they were in the custody of Messrs. Lyall Marshall Co. the Managing Agents of the defendants, in the following circum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xpiration of such time or as to the shares of any particular member on the receipt of an intimation from such member that he declines to accept the shares offered, the Directors may dispose of the same in such manner as they think proper but in default of any such determination or so far as the same shall not extend the new shares may be dealt with as if they formed part of the shares in the original ordinary capital. 40. Except so far as otherwise provided by the conditions of issue or by these presents any capital raised by the creation of new shares shall be considered part of the original ordinary capital and shall be subject to the provisions herein contained with reference to the payment of the calls and instalments, transfer and transmission, forfeiture, lien, surrender and otherwise." On 17th August, 1936, the Managing Agents convened an extraordinary general meeting of the Company by a notice in the following form: P. D. 4. Carew Company Ltd. Notice convening Extraordinary General Meeting. Notice is hereby given that an Extraordinary general meeting of Carew Co. Ltd. will be held at the registered office of the company at 4, Fairlie Place, in the town of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed. Accordingly letters in the approved form were despatched to the members of the company, the letter to David being dated 15th September, 1936. It is not necessary to set out the letter in extenso, but the following paragraphs are of importance: 'Should you desire to renounce your rights to all or any of the shares to which you are entitled in favour of a nominee, will you be good enough to fill up the enclosed form "B" provided for that purpose instead of or in addition to the form already referred to. The letter of renunciation should be counter-signed by the nominee. The Directors reserve the right to reject any nominee. Should the said shares not be applied for by yourself or by the nominee within the time named the Directors of the company will assume that you are not prepared to take them up and will dispose of them elsewhere.' The time referred to expired on 9th November, 1936. This letter was opened by Solomon as the attorney of David and shown to the plaintiff. The plaintiff's position was that though he considered himself the legal owner of the 16,800 shares, he realized that as he had not been able to effect registration either of his own name or the names of the B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e present suit was instituted. It was in form a suit for specific performance of a contract to allot and issue 4,200 shares, or alternatively, for damages. An application to restrain the company from disposing of the shares elsewhere was unsuccessful, and thereafter the company sold the shares in the market. An amendment was thereupon made which converted the suit into one for damages for breach of contract, the damages claimed being the difference between the market price on the date of breach and Rs. 58,800, or in the alternative the difference between Rs. 58,800 and the highest market price since the date of breach. It is not now contested that if the plaintiff is entitled to damages, such damages should be assessed as on 27th November, 1936, or that on that date the market rate for the shares was Rs. 19-8-0. On this basis if the plaintiff obtains a decree it will be for Rs. 23,100. The defences with which I now propose to deal were raised by issues which for all practical purposes were agreed upon with one exception. Mr. Clough, as I have already indicated, pressed me to permit a defence to be raised based on the contention that that ownership of the 16,800 shares has passed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tiff are attached would have to be vacated. It is next suggested that on David's return to India in the cold whether of 1929-1930 the agency was automatically terminated. This defence is founded upon a recital in the power of attorney that the donor is about to proceed to England, and is therefore desirous of appointing the donee as his constituted attorney for purposes thereinafter expressed. The submission is that this recital indicates an intention to limit the duration of the power, a matter as to which the rest of the document is silent to the period of David's absence from India. Mr. Clough relies on Danby v. Coutts Co. In that case the relevant recital was as follows: 'And whereas I am about to return to South Australia and am desirous of appointing an attorney or attorneys to act for me during my absence from England, etc' It was held that the recital controlled the generality of the operative part of the instrument and limited the exercise of the powers of the attorneys to the period of the donor's absence from England. I have been referred to a passage in Halsbury's Law of England, Edn. 2, Vol. 1, p. 314, where it is stated on the authority in Danby v. Cout ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... minal proceedings, David has been deliberately absconding, and that the last place which he is likely to visit is India. When Mr. Nicolson, Chairman of the defendant company, was in the witness-box he gave the following answers. (Question 147). Ques. You are content to let that statement pass, that to the best of your knowledge he was not in India? Ans. Yes. At Question 85: Ques. You had very little doubt in your mind, I imagine, that Mr. David Ezekiel was not in India? Ans. We had very little doubt. In these circumstances I hold as a fact that David Ezekiel was absent from India on 6th October, 1937. The next question to be considered concerns the scope of the power, that is to say "did the power give the attorney authority to sign the letter of renunciation, and thereby relinquish David's claim to the new shares, and nominate the plaintiff in his place"? There is no serious divergence as to the principles which are to be applied to the construction of powers of attorney. It is admitted that they must be construed strictly, and that general words must be interpreted in the light of the special powers, although they include incidental powers necessary for carr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... transfer. Indeed it is not surprising if those are contingencies not covered by the power. The power was not executed in 1929 to meet a situation where the agent was not in a position to communicate with the principal ; indeed I take leave to doubt whether such a situation has even now arisen. The power appears to me to have been designed primarily to enable the agent to act for the principal in routine matters. Anything exceptional could be passed on to the principal, who could then either deal with the matter direct or give the agent special authority. In these circumstances, it seems improper to strain the language of the power for the purpose of giving it as comprehensive a scope as possible. I hold accordingly that the renunciation and the nomination of the plaintiff were unauthorized, and inasmuch as they have never been ratified the defendants are not bound by them. It remains to consider two questions relating to the letter of 15th September 1936. The defendants argue that inasmuch as the letter was addressed to David, there was no offer to the plaintiff and that it follows that the plaintiff's purported acceptance on 6th November did not conclude a contract between the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ify the terms of the offer. The renunciation refers to "your ( i.e. ., the Directors') notice of 17th August, 1936" and the acceptance is in the form: "I hereby accept the above-mentioned shares upon the terms of the said notice and authorize my nominee to be put on the register in respect of them." This point now raised is the basis of the amendment of the concluding portion of para. 3 of the plaint. This originally ran: "By such letter ( i.e., the letter of 15th September 1936) the defendant company offered upon the terms of such letter to issue to the said David Ezekiel or to his nominee the said 4,200 shares." This was subsequently amended to read: "By such letter the defendant company offered upon the terms of the said notice dated 17th August, 1936, and in accordance with the said resolution (2) set out in para. 1 of the plaint to issue, etc." Paragraph 5 states that the plaintiff accepted the shares in terms of the notice. It is in evidence that the letter of 15th September as also the accompanying's forms were settled by the company's solicitors and approved without more than a formal examination by the Directors. It is not suggested that the reservation was ..... X X X X Extracts X X X X X X X X Extracts X X X X
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