9911796707
TMI Blog1958 (12) TMI 25X X X X Extracts X X X X X X X X Extracts X X X X ..... self to be a holder of fully paid up shares. The second petitioner is Hardev Singh who had acquired 100 shares of the company of the value of Rs. 100 each and had paid the entire amount of Rs. 10,000 on these shares. The grievance of the two petitioners is that their respective shares were illegally forfeited by the company and they were transferred to respondents Nos. 2 to 4 and their names have been scored out from the register of members of the company. They have prayed that this court should pass an order directing the respondent company to enter the names of the petitioners in the register of members and to remove the names of respondents Nos. 2 to 4. On behalf of the company it is denied that the first petitioner Bhagat Singh was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... member fails to pay any call or instalment of a call on the day appointed by the board for payment thereof, the directors shall send a notice fixing a day for payment and if the requirements of any such notice are not complied with, any share in respect of which the notice has been given may any time thereafter, before the payment required by the notice, be forfeited by a resolution of the directors to that effect. ( a )The company shall have a lien on every share (on fully paid shares as well) for all moneys (whether presently payable or not) called or payable at a fixed time in respect of that share and the company shall also have lien on all shares (on fully paid shares as well) standing registered in the name of single person for all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment. My predecessor framed the following issues : 1.Whether the company was entitled to confiscate the shares of Bhagat Singh petitioner. 2.Whether the company was entitled to confiscate the shares of Hardev Singh petitioner. On behalf of the company R.W. 1, Ishar Singh Majhel, chairman of the company, has stated that according to the books of the company Rs. 23,994-10-9 was due from Hardev Singh and Rs. 3,615-4-3 from Bhagat Singh. Both the petitioners were served with notices calling upon them to pay the amounts due from them by 20th of September, 1953, failing which their shares would be forfeited. A registered notice with acknowledgment due was sent to Hardev Singh and also to Bhagat Singh. The letter sent to Hardev Singh was rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd stated that he owned 41 shares. 24 shares were allotted at one time and 17 shares were also allotted to him in lieu of transfer of a bus. He did not deny that a sum of Rs. 3,615-4-3 was shown as due from him according to the books of the company but stated that the entries did not bear his signatures. Hardev Singh, petitioner, as P.W. 3 denied ever having made any entries in the books of the company or ever having handled cash. According to him entries were made by R.W. 2, Som Nath, who alone used to handle cash and no money was entrusted to the petitioner. He did not deny that in the balance sheet, Exhibit R. 9, there was an entry that he was indebted to the company as cashier to the extent of Rs. 23,000. Mr. Hans Raj Sodhi, learned c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icate upon the conflicting contentions of the parties in proceedings under section 38 of the Indian Companies Act, 1913, which are essentially of a summary character. The object of enacting section 38 of the Indian Companies Act of 1913, which is analogous to section 155 of the Companies Act of 1956, was to provide a summary remedy in non-controversial matters or in matters where a quick decision was necessary in order to obviate an irreparable injury to a party. This provision was not intended for settling controversies under several heads necessitating a regular investigation. When serious disputes are involved as in this case the proper forum for their adjudication is a civil court. It no longer admits of controversy that the jurisdict ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sussex Brick Company [1904] L.R. 1 Ch 598. As stated in Halsbury's Laws of England, Third Edition, Volume 6, at page 218 : "It (the application) may be by motion or summons or by action commenced by writ. If the court thinks that the case, by reason of its complexity or on the ground that there are matters requiring investigation or otherwise, could more satisfactorily be dealt with by an action, the court will decline to make an order on a motion, without prejudice to the right of the applicant to institute an action for rectification. An action may, without any direction by the court, be instituted for rectification of the register, a course which should be followed where there is much complexity, or where other relief is required. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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