9911796707
TMI Blog1938 (12) TMI 13X X X X Extracts X X X X X X X X Extracts X X X X ..... he made an application to the company for allotment by the Company to him of 4,000 shares, that instead of allotment, the managing director has caused his name to be entered in the register as a transferee and that by reason of those facts he is entitled to have his name removed from the list of contributories. Some time in the early part of the year 1934, it would seem that there were negotiations between the objector and the Company for him to become the Company's district agent for Nellore, Guntur and Cuddapah, the company proposing to carry on the business of distributing and selling petroleum, motor oil and things of that nature and were contemplating doing this through agents. Negotiations appear to have taken place between the objector and a man named D. Bashiam Naidu. So far as this man is concerned, it was suggested that he was an agent for the objector D. Balarama Reddi. I am however quite satisfied that he was an agent for the Company or for one R.S. Mudaliar who was then its managing director and the guiding authority of the managing agents of the company. The agreement between the company and the objector is dated 27-6-1934 under which he is appointed district agent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect of the loans he had made both to S. Rathnasaphapathi Pillai and Ranganatha Mudaliar. Out of these moneys, a sum of Rs. 1,500 was paid to D. Bashiam Naidu as commission of the transaction. Ex. A-4 is the receipt dated 3-6-1934 acknowledging receipt of that sum. The receipt states : "Received from C. R. Govind", who was the agent of R.S. Mudaliar. It seems very strange that such a large sum of Rs. 1,500 should be paid as commission in respect of a transaction involving Rs. 8,000-amounting to about 20 per cent. In my view, what was happening no doubt was, the objector was applying to the company for shares and sent cash or its equivalent, as the first payment in respect of 4,000 shares. Mr. R.S. Mudaliar seeing an opportunity to recoup himself, did so by devoting the proceeds to himself and instead of there being any allotment by the company-in which event of course the company would have received the Rs. 8,000 and not R.S. Mudaliar-he effected the transfers I mentioned. In regard to the 3,500 shares there is a transfer form, Ex. A-5. The body of it is in the handwriting of Swaminathan and purports to bear date 1-4-1935 and it is signed by S. Ratnasabhapathy Pillai alone, no witne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... each receipt. Ex. A-2(3) of a like sum from Mr. M. Gopalakrishnamoorthy and Ex. A-2(4) of the same amount from Mr. D. Subbarama Reddi. There is written on each of the four counterfoils that the sums of Rs. 200 were deposits of Rs. 2 per ordinary share. On the back of each counterfoil in pencil in Swaminathan's handwriting are the words "Paid to Mr. Balarama Reddi". The two witnesses said that the objector informed them that he had arranged to transfer some of his 4,000 shares which he had obtained as transferee to the persons named in the receipts. The amounts in these counterfoils were not entered in any book of the company, and so far as the company is concerned, they are obviously fictitious documents, assuming the explanation is correct which R.S. Mudaliar and Swaminathan gave. The total amounts to Rs. 800, Rs. 400 from J. Sreeramulu and Rs. 200 each from the other two. The objector denied there was any such interview or that he made the requests as stated by the other two witnesses. He said he did not take away these receipts or share transfer forms as stated by the two witnesses. In answer to some questions I put he admitted he was negotiating with those three persons for th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deposit in respect of a number of shares. I think that at this period the objector was trying to pass on some of his shares in order to recoup himself part of the monies he had paid. Secondly, the next facts relied upon are that throughout the period following the traasaction, from June 1934 to April 1938 when the winding up order of this company was made, admittedly the objector never once either wrote or orally made a complaint that he had not been given shares for which he had made an application dot did he ask for the return of the Rs. 8,000 which he had paid. His explanation is that several times he saw R.S. Mudaliar at the company's offices and spoke to him of the commencement of the company's business and the provision of oil and petrol and other articles and was always put off by being told that shortly supplies would commence. He never made a single complaint in regard to his Rs. 8,0.00 being retained and his shares not having been .allotted. In evidence, he said, as be expected supplies of oil he thought his Rs. 8,000 would be treated as a deposit against supplies. In considering whether one can accept that explanation, one has to bear in mind that before the winding up ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are that his name appeared in the company's register as a shareholder. It is quite clear that a day or two following 1-9-1937, he must certainly have been aware that his name was included as a member of the company in the share-register. In his affidavit in support of his application to rectify the register, he does not say that he was unaware that his name was in the register. What he does emphasise is, he was unaware that he was in the register as a transferee and not as an allottee of shares. The objector took no proceedings or steps at all for the removal of his name from the list of members of the company. Learned counsel on behalf of the objector has said that the company was in a very bad way from the middle of 1937 onwards and the registered office was difficult to find and for that reason his client took no steps, though he must have known by 1-9-1937, or shortly after that his name was in the register. If he wished to take proceedings, he could have done so and obtained an order for substituted service of proceedings to rectify the register. He did nothing. The winding up order was made in April, 1938, and in the ordinary course, the Official Liquidator made an applicatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as a shareholder for twenty three shares. If he had any doubt as to the manner in which the authority had been pursued, it was for him to have enquired whether he could have asserted any right against either Mr. Sichel or Mr. Hankey, or the company, arising out of the mode in which the authority had been pursued. Whether he could have disclaimed the ownership of these twenty three shares may be doubtful, but I assume in his favour that he might have had a case of that kind. It appears to me that not having done so, and being aware that he was held out to the public as the holder of twenty three shares, it is too late for him months or years after wards to enter into that question." In Lawrence's case, Lord Cairns, L.J., at page 423, said: "It thus appears that on the 16th May Mr. Lawrence and his legal adviser had in their hands the whole of the documents the variance between which is the ground of the motion to remove the name of Mr. Lawrence from the register. If he had at that time a right to repudiate his shares, it was aright which, in my opinion, might be waived; and if asserted, could not be asserted with effect unless asserted promptly and distinctly. No attempt at repud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot giving her what she asked for. But the matter does not rest there, and this is just the point of the case. After her name was placed on the register and after she knew that her name was on the register, she did certain acts which were only consistent with an intention on her part to be treated as a member of the company, and to treat herself as a member of the company, in respect of these particular shares which had been so appropriated to her. If that is not evidence of an agreement to be a member, I really do not know what is. I order goods of one description from a merchant; he cannot compel me to take goods of a different description, and he does not complete his contract by giving me goods of a different description; but if he sends me goods which are not according to the contract and which are not within the description of the contract, and I nevertheless elect to take them, my act with regard to them is evidence of a new contract, which the law will imply, to pay for that which I have kept. It is not that I promise in so many words to pay; it is that I do acts from which the law will imply in favour of the opposite party a promise. Here it is not that she kept all these n ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
