P VISHWANATH SHETTY Vs. K BALACHANDRA SHETTY

JUDGEMENT

(1.) THE respt. No. 1/first plaintiff entered into a written agreement dated 20-2-1987 with the appellant/defet. No. 1 vide Ex. P. 1 for transfer of shares of Navabharath Flange and Allied Industries. The total shares of the company was Sold for face value of Rs. 20,00,000/- under Ex. P. 1. Rs. 10,00,000/- was paid towards the part of the consideration. The balance of Rs. 10,00,000/- was agreed to be payable within six months. In Ex. P. 1 it was also stipulated that if balance of Rs. 10,00,000/- is not paid on or before 30-3-1989, the appellant shall pay interest at 15% p. a. w. e. f. 31-7-1989 till the date of payment.

(2.) THE 19th respondent/deft. No: 2 was the Managing Director of the company as on the date of the Ex. P. 1 and consenting witness and guarantor for payment both under exs. P1 and P2. The appellant failed to pay the amount. Hence, the suit was filed by pltfs. No. 1 to 18 on 1-7-92. The first plaintiff had signed the plaint. The pltfs. No. 2 to 18 have not signed the plaint. The plaintiffs made an application to amend the cause title of the plaintiffs to describe pltfs. No, 2 to 18 of being represented by the pltf. No. 1 as their power of attorney. The amendment is allowed and effected vide order of the trial Court dated 1-8-1995.

(3.) THE first appellant filed written statement contending that the suit is barred by time. The first plaintiff did not have power of attorney of pltfs. No. 2 to 18 as on the date of Ex. P. 1 and P. 2. The suit is instituted without the signatures of pltfs. No. 2 to 18. Therefore the institution of the suit is a nullity. It is further stated that, the first plaintiff suppressed the material facts regarding the bad financial shape of the company and by misrepresenting the facts, the shares are sold. On the date of Ex. P. 1 the company had incurred huge loss, the shares were not even worth the face value. Hence, pray for dismissal of the suit.