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TMI Blog2015 (5) TMI 325X X X X Extracts X X X X X X X X Extracts X X X X ..... ation. We do not accept the broad proposition that the events which had taken place three years before the presentation of application are barred by Article 137 of the Limitation Act”. We find Section 47 of the Code of Civil Procedure empowered the executing Court to interpret a decree and hold that it was a decree for payment of money. From the conduct of the ‘TML’ it creates a doubt in our mind that it was the intention of ‘TML’ not to transfer the unpaid dividend in favour of the ‘Hungerford’. Therefore, they prepared purported resolution dated 27th January, 1975 with the intention that in the balance sheet signed on 3rd November, 1975 with resolution dated 21st January, 1975, the Directors would not disclose the same in the balance sheet though in the auditor’s report for the said year did not reflect such resolution. Therefore, from the conduct of the ‘‘TML’’ we have no hesitation to hold that the purported resolution dated 27th January, 1975 was fraudulently fabricated to deprive the ‘Hungerford’ from its legitimate unpaid dividend. Non-payment of dividends was a continuous offence so long the payment is not made. Therefore, there is no question of limitation. Hence the th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r. D.N. Sharma, Advocate, Mr. Anumoy Basu, Advocate, Mr. Loknath Chatterjee For The Respondent : Mr. Nirmaljit Singh Hoon, (In person on behalf of Hunderford Investment Trust) JUDGMENT ASHIM KUMAR BANERJEE, J.: I have gone through the well versed painstaking judgment of My Lord Samapti Chatterjee, J.. I am in full agreement with His Lordship both on findings as well as the ultimate result in the appeal as well as the application for review. However, I wish to add a few words on the review application. When a Bench hears a matter and disposes it on merits, it becomes functus officio as soon as the judgment is delivered and order is passed. Application for review is entertained by the same Court on a limited scope that My Lord has referred to, while referring to Order XLVII of the Code of Civil Procedure. On a cursory glance and a combined reading, everyone would agree, the scope to reopen the issue by the same Bench would be little difficult. Keeping in such mind set, let us now try to understand what the petitioner would seek in the application for review. The appeal would relate to an order passed in C.P. 33 of 1988 whereby the learned Single Judge dismiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... COMPANY LIMITED (hereinafter referred to as TML ). John Geoffrey Turner and Nigel Frederic Turner, (both since deceased), were the owners of 100 per cent shares of Hungerford . The entire share capital of TML consisted of 4,500 fully paid up ordinary shares of ₹ 1,000/- each. An agreement was executed on October 3, 1956 by and between Hungerford , John Geoffrey Turner and Nigen Frederic Turner on the one hand and British India Corporation and Haridas Mundhra , (hereinafter referred to as Mundhra ), on the other hand whereby it was agreed that Mundhra would purchase 49 per cent of the shares in TML . The agreement also provided for an option to Mundhra to purchase from Hungerford , the balance 51 per cent share of TML within five years. 2. Pursuant to the agreement the 49 per cent of the shares in TML were sold and transferred to Mundhra and his nominee British Indian Corporation. Thereafter a suit for specific performance of contract being suit no.600 of 1961 was filed by Mundhra against Hungerford , TML and others in the Original Side of this Hon ble Court praying inter alia for specific performance of the agreement to sell the 51 per cent sha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d being suit no.2005 of 1965 in the Original Side of the Court claiming inter alia ₹ 79, 70,802/- as principal, and ₹ 47, 96,250.16 as interest in respect of payment made by TML to income tax authorities on behalf of the Hungerford . A further claim was also made in the suit for possession and sale of the 229.5 shares in the exercise of TML s lien on those shares under Article 22 of the Article of Association of the Company. On July 8, 1966, Mr. K.M. Bose was appointed a receiver in respect of said 229.5 shares. This court approved the appointment of the receiver and directed that the receiver would be at liberty to deliver the 51 per cent share to Mundhra on payment of ₹ 86, 60,000/- in performance of the obligation under the specific performance. It was also directed by the Court that after the shares were taken by Mundhra on payment of the price in terms of the direction of the Court of appeal the lien if any, as claimed by TML would shift on to money which the receiver may not recover from Mundhra . Against the said order TML preferred appeal and also made an application for stay of the order. Ultimately the stay was refused but the appeal was p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... istrar of the Court and the Registrar was directed to handover those to the Hungerford . Ultimately, lien suit no.2005 of 1965 initiated by TML was dismissed. An appeal was preferred by TML to the Division Bench of this Court but the said appeal was also dismissed and against that an appeal was filed by TML to the Supreme Court which was also dismissed. The TML filed six applications before the Learned Judge. First two applications were under Section 397 and 398 of the Companies Act and the 3rd, 4th and 6h applications related to the prayer of the TML for injunction and other was for addition of parties. 7. On the main application under Sections 397 and 398 of the Companies Act the Learned Judge framed as many as 15 issues. Out of those 15 issues most of the issues were infractuous in efflux of time and only issue no.1, 2, 3 and 4 which are as follows were dealt with by the Appeal Court. 1. Is the petitioner entitled to maintain this application or claim any of the relief ? 2. Is the application maintainable in the absence of the subsidiary companies and their directors and share holders ? 3. Whether in the facts and circumstances alleged in paragraphs 7 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... both the execution application and amended application was concluded. The said execution application as well as the amendment were disposed of by the Learned Single Bench on February 22, 1993 with following order :- Therefore, it is ordered that the respondent company will pay ₹ 12,16, 350.00 to the applicant within eight weeks from date. In default of such payment there will be an order in terms of prayer (a) of col.10 of the Tabular Statement ad Mr. Subhasis Biswas, Advocate is appointed Receiver on a remuneration of 50 Gms. p.m. for that purpose. Receiver will collect rent and pay to the applicant deducting his remuneration and other charges if any, till the claim of the applicant as ordered above is fully satisfied. There will be no order as to costs. The execution application and the amendment application are disposed of accordingly. 10. Feeling aggrieved by the said order the TML preferred the instant appeal being APO No.289 of 1994. Thereafter by the order dated 13th April, 1993 the Division Bench passed an order in terms of prayer A of the petition and directed the TML to furnish a bank guarantee for the entire amount of ₹ 12,16,350/- with any n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on Act 1963 provided for a period of 12 years which expired in respect of the said application. Mr. Bose explained that the execution application was made on June 9, 1993 when the order was passed by the Hon'ble Court to issue notice making it returnable on June 21, 1993 i.e. more than 12 years as the Division Bench order was passed on May 21, 1981. 18. Mr. Bose further urged that it is evident from the tabular statement C.7 that claim on account of the dividend for financial year 31st December, 1963 to 31st December, 1966 amounting to ₹ 12,60,350/- is time barred and not supported by any cogent reason. He also pointed out that limitation period for payment of dividend is three years under Article 113 of the Limitation Act. 19. Mr. Bose further contended that balance sheet for TML for the financial year ending at 31st December, 1971 contained the signature of N.S. Hoon Chairman of Hungerford and there is similar acknowledgement in the balance-sheet for the year 31st December, 1983 containing the signature of Mr. Hoon, where it is mentioned that there is no liabilities on account of the unpaid dividend. Therefore, in conclusion Mr. Bose submitted that the impugne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th C.P No.33 of 1988, thus, directing payment of arrear dividend upto February 3, 1977 and payment to be made subject to the permission of RBI. 28. Mr. Hoon also contended that by order dated 22nd February, 1989 The Hon ble Justice S.B. Mitra (as His Lordship Then was) directed stay of sale of Hungerford s shares and recovery of arrear tax. 29. Mr. Hoon further urged that the judgment of the Division Bench is a decree within the meaning of Section 2 of the Code of Civil Procedure. 30. Therefore, the order of the Division Bench dated 21st May, 1981 is executable even as a decree although was made under Companies Act, 1956. 31. Therefore it is contended by Mr. Hoon that the application for execution of the said order of Division Bench is enforceable in the same manner as a decree by the Court in a suit. Furthermore, the period of limitation for enforcement of a decree is 12 years and if the execution application has been made within a period of 12 years it would be within the time and the executing Court can interpret a decree for payment of money as has been laid down under Section 47 of the Code of Civil Procedure. 32. Mr Hoon further vehemently urged that the non- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the said Division Bench order where it is stated . In our view, if the same state of affairs of the Company continuous or in other words if any wrong committed before three years of the presentation of the application continuous to be in operation, there will be no question of limitation. We do not accept the broad proposition that the events which had taken place three years before the presentation of application are barred by Article 137 of the Limitation Act And also the extract of the Division Bench judgment dated 21st of May, 1981 as follows:- Therefore, the question is no longer a debataise one, and it must be held that the dividends of Hungerford from 1963 were unreasonably withheld and such withholding of dividend was an act of mismanagement and operation to Hungerford within the meaning of Section 397 of the Company s Act. 39. We find Section 47 of the Code of Civil Procedure empowered the executing Court to interpret a decree and hold that it was a decree for payment of money. In this connection Section 47 of the Code of Civil Procedure is quoted herein below :- Section 47-Questions to be determined by the Court executing decree .-(1) All questi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 of the Code of Civil Procedure. Further, Section 36 of the Code of Civil Procedure provides :- Application to orders.- The provisions of this Code relating to the execution of decrees (including provisions relating to payment under a decree) shall, so far as they are applicable, be deemed to apply to the execution of orders (including payment under an order). 43. Therefore, unless and untill full satisfaction of the decree is discharged by the TML liability of the Division Bench order dated 21st May, 1981remains and the present execution application is nothing but a tool to execute the order which was filed within the period for 12 years and there is no bar of limitation. 44. We also find that the order dated 21st May, 1981 clearly indicated that the TML failed to make payment regarding dividends to the Hungerford . Therefore, non-payment of dividend as per Division Bench order is a continuous offence committed by the TML for which limitation is not a bar. Therefore, question of payment of dividend by the TML to Hungerford reached its finality by judgment of the Division Bench dated 21st May, 1981 within the same parties which was put into execution by tha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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