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TMI Blog1958 (1) TMI 22X X X X Extracts X X X X X X X X Extracts X X X X ..... in their own rights as shown from the books and papers of the company and he prayed that they should be made liable to contribute to the amount of call money due from them. So far as the appellants in Miscellaneous Appeal No. 24 are concerned they took the plea that the call money due had been already paid and that there was nothing due from them in respect of those shares. It was also urged that there was no valid allotment of the alleged discount shares to the appellant, Kamakhyalal, and that neither in fact nor in law he was liable for the payment of any contribution in respect of them. Therefore, the questions arising for consideration in this appeal may be formulated under the following heads: "1.Whether there was no valid or any allotment of 2,905 discount shares to the appellant, Kamakhyalal Goenka? and 2.Whether there was actually any payment made by the appellants in respect of the shares standing in their respective names as alleged by them?" It may be stated at the outset that the rejoinder to the application to the official liquidator was filed by Kamakhyalal Goenka alone, the other appellants being the members of his family. I will first take up the question o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned Advocate-General has raised another very important question, assailing the validity of these allotments which was not raised before the learned Judge. He contends that the allotment of these discount shares is void and inoperative under section 105A of the Indian Companies Act and, therefore, the official liquidator has no right to levy any contribution on the basis of such an allotment which the law did not recognise at all. According to the learned counsel, no rights or liabilities flowed from such a void allotment. Under the relevant provisions of the above section, it is lawful for a company to issue at a discount, shares in the company, of a class already issued, provided that the issues of the shares at a discount was authorised by a resolution passed in a general meeting of the company and sanctioned by the court. The two requirements of this provision therefore evidently are: (1) that the issue of the share in discount should be authorised by a resolution passed in the general meeting and (2) that it must be also sanctioned by the court; in the absence whereof the allotments will not be valid. It is pointed out that none of these requirements of the law have been fu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder section 31 of the Act every company is in duty bound to maintain in one or more books a register of its members, and enter therein the particulars in regard to their names and addresses, their occupation if any, along with a statement of the shares held by each member distinguishing each share by its number, and of the amount paid or agreed to be considered as paid on the shares of each member, the date on which each person was entered in the register as a member; and the date at which any person ceased to be a member. The failure to maintain a register as required by section 31 of the Act may entail penal consequences. Mr. Lahiri has, therefore, laid great stress upon the point that in order to be a member it is necessary that the name of the person should be borne on the register of members maintained by the company which should also show the particulars contemplated by section 31 of the Act; and he contends that in the present case in the register itself there is nothing to indicate that in serial No. 114 the appellant has been mentioned as a member of the company in respect of these 2,905 shares. There is no doubt that there is some discrepancy about the serial number ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act, yet it is useful to refer to a decision of the Privy Council in Hansraj Gupta v. N.P. Asthana [1932] 2 Comp. Cas. 548 . In that case a point was taken that it had been already decided between the parties in some previous litigation that the arrangements between them constituted one indivisible contract which was illegal and void, that the matter had thus become res judicata and that since the contract to take shares was void, the executors were under no liability in respect of the shares, but were entitled to have their names removed from the list of contributories and to have the application and allotment monies repaid. The argument challenging the allotments of shares as in pursuance of a void contract was not entertained by their Lordships, who held that even if they assumed in favour of the appellants that the contract contravened the provision of section 105 of the Companies Act the matter could be disposed of on a short but sufficient ground. They observed as follows: "Whatever may have been the rights and liabilities of the testator before the winding up intervened, the position was altered by the happening of that event. At the commencement of the winding u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... now be allowed to plead for the exclusion of his name from the list of contributories, even on the assumption that the allotment of shares was void. Such a plea has to be overruled on the doctrine of holding out. The above decision in Lakshmi Narasa Reddi v. Official Receiver, Sree Films [1951] 21 Comp. Cas. 201 , with which we entirely agree, is a case in point. **** In this context there is a further contention raised before us by the learned Advocate-General which was not raised at an earlier stage. The contention is that some of the contributories belonging to the appellant's family, in whose names the shares have been purchased, were minors some of them being minors even now. Therefore, the contract so far as these minors go is void. It is pointed out that the petition filed by the official liquidator asserts that all the persons included in the list of contributories were liable in their own right as such. Therefore, no contribution could be levied against the minors, they having no capacity to enter into the contract at all. Reliance has been also placed upon the recital in the cause title to the rejoinder petition filed by the appellant Kamakhyalal Goenka, where ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purchase of the shares in their names or that the consideration was paid out of their money. The point of their minority was never canvassed at any earlier stage and throughout Kamakhyalal Goenka appears to have been resisting the claim for contribution as if he was the person acting on the scheme and responsible for the contributions, if at all. Mr. Lahiri has relied upon a decision in Dalmia Jain Airways Ltd. v. Miss Saroj Rani AIR 1956 Punj. 41 in support of his contention that the contribution for these shares could not be enforced against minors. That case is clearly distinguishable. There an application was made under section 38 of the Companies Act for rectification of the register and substitution of the name of the father in place of his two minor daughters in whose names the shares had been purchased. The evidence showed that the money was paid by the father from out of the monies which belonged to the grand-mother of the minor children and which has been inherited by the minors. That being so, it is obvious that the father was not himself making the purchases in that case in the alias name of the daughters, but he was making purchases for the daughters in th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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