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TMI Blog1975 (4) TMI 75X X X X Extracts X X X X X X X X Extracts X X X X ..... any under winding up. He prayed that his earlier application moved on 11th May, 1972, be treated as one under section 467 of the Companies Act. The petitioner's case is that he held a decree in Suit No. 4 of 1959 dated 14th December, 1959, for Rs. 10,901.35 against one, Damodar Das Agarwal. He was the younger brother of Sri Shyam Sundar Agarwal, the managing director of the company. The decree was put into execution (Case No. 12 of 1960). Three hundred and forty-two shares held by the judgment-debtor, namely, Damodar Das Agarwal, were put up for auction on 18th July, 1963. They were purchased by the petitioner-decree-holder with the permission of the court for Rs. 4,000 in the partial satisfaction of the decree. The sale was confirmed by the execution court on 30th January, 1965, and became final. On 9th February, 1965, the execution court intimated the company of the transmission of the aforesaid 342 shares to the petitioner. The execution court issued a sale certificate to the petitioner on 31st July, 1965, certifying that he was the owner of the aforesaid shares, and directing the name of the petitioner to be substituted in place of Damodar Das Agarwal. But, in spjte of it, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he alleged 342 shares in question to Sri Purshottam Das Agarwal on 15th July, 1960, and the said scrips are in the possession of Sri Purshottam Das Agarwal. He also stated that Damodar Das Agarwal was owner and benamidar of these shares of Hanuman Mills Ltd. and he was entitled to pledge the shares. He claimed that the petition is time-barred. On the pleadings the court framed the following issues in the case: (1)Whether the petition is not maintainable as alleged in paragraphs 5 and 23 of the counter-affidavit ? (2)Whether the petition is barred by limitation? (3)Whether the petitioner is not entitled for registration of his name in the register of members of the company for the reasons alleged in para graphs 3, 4, 19, 24 and 25 of the counter-affidavit? (4)Whether the petitioner Is the owner of 342 shares and is entitled to get his name substituted in the register of members of the company as alleged in paragraphs 1, 5, 19 and 20 of the petition? (5)To what relief, if any, is the petitioner entitled ? By the order dated 11th September, 1972, on which date the issues were framed, the court fixed 30th October, 1972, for final hearing and gave liberty to the parties to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... This application, having been moved within two months of the date of the winding-up order, cannot be said to be barred by limitation. Under section 467 the court has to settle the list of contributories, and in that connection has the power to rectify the register of members. In Shankara v. Haridhan Singh [1966] 36 Comp. Cas. 209 (Punj.) it has been held that an application for rectification of register was not "an application made" within meaning of section 3 of the Limitation Act, and so does not attract article 181 of the Limitation Act, which is only applicable to applications under the Code of Civil Procedure. The Punjab High Court followed the 'decision of the Supreme Court in Sha Mulchand Co. v. Jawahar Mills Ltd. [1953] 23 Comp. Cas. 1 (SC). Article 137 of the Limitation Act, 1963, is equivalent to article 181 of the Limitation Act, 1908. This authority will, therefore, equally apply to article 137. Learned counsel for the managing director had placed reliance on article 137 of the Limitation Act in support of this issue. In my opinion the decision of the Punjab High Court is applicable, and it cannot hence be said that the application was barred by time becau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chaser of the 342 shares, which were the property of Damodar Das Agarwal, the judgment-debtor. Learned counsel for the managing director relied upon Order 21, rules 79 and 80 of the Code of Civil Procedure, and urged that since the share scrips were not in the possession of the court and since the court had not endorsed them in favour of the petitioner, the petitioner did not become the owner thereof. In reply, learned counsel for the petitioner invited my attention to Philipose v. Vanchinad Rubber Produce Co, Ltd. [1953] 23 Comp. Cas. 536 (Trav-Coch). In this case it was held that non-compliance with the procedure prescribed by rules 79 and 80 of Order 21, Civil Procedure Code, did not make the suit based on sale certificate unsustainable. There is nothing in these rules to indicate that the title of the auction purchaser to the shares purchased by him will be perfected only after delivery is made by the issue of the prohibitory order as prescribed by clause (3) of rule 79. On the other hand, the conditions necessary for perfecting the auction purchaser's title are prescribed by clause (2) of rule 77 of Order 21. So far as the sale evidenced by the sale certificate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Companies Act the Central Government was entitled to sell the shares to an existing member on payment of appropriate compensation. By bypassing the provisions of sections 108 to 111 the petitioner has deprived the existing shareholders of their right to acquire the shares in dispute. It has already been held that the procedure prescribed by sections 108 to 111 is not a condition precedent to the maintainability of an application for rectification under section 155 of the Companies Act. The provisions of sections 108 to 111 have not been incorporated or made applicable to the power of the court to settle the list of contributories under section 467 of the Companies Act. Assuming, however, that that procedure was by some stretch of reasoning available in the present proceedings, none of the shareholders has come forward to purchase the 342 shares in question. So the question of applying the proviso aforesaid does not at all arise. My finding is that the petitioner is the owner of 342 shares and is entitled to get his name substituted in the register of members of the company. Issue No. 4 is accordingly decided in the affirmative, in favour of the petitioner and against th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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