LEELA MAHAJAN Vs. T STANES AND CO LTD

JUDGEMENT

(1.) T. Stanes and Company was a private limited company and therefore subject to section 23-A of the Income-tax Act. This company has been the managing agent of two plantation companies, one of within is called the United Coffee Simply Co. Ltd (U. C. S. for short ). T. Stanes and Company was also operating a trading section handling coffee curing, stores, fertilisers and other articles. The U. C. S. has a share capital of Rs. 6,00,000/- divided into 40,000 shares of Rs. 15 each. Of these 40,000 shares T. Stanes and Company Ltd. hold 21,510 shares, that is to say, a little over 51 per cent.

(2.) ON 1-9-1955 T. Stanes and Co Ltd wrote Ex. R. 1 to the Directors of the U. C. S. , proposing to acquire the shares held by outsiders in the U. C. S. , on certain terms. Since out of 40. 000 shares in U. C. S. T. Stanes and Co. Ltd. held 21. 510, the shares in the hands of outsiders were only 18490. The letter Ex. R. 1 explained,

(3.) ON 19-9-1955 Mrs. Leela Mahajan, the applicant in Appln. No. 553 of 1936, wrote to T. Stanes and Co, Ltd, expressing her dissent from the proposal to acquire her shares at the rate and on the terms mentioned in Ex. R. 1 and demanding payment at Rs. 39 per share. On 20-9-1955 the U. C. S. acknowledged the receipt of the latter. Subsequently (the date does not appear in Ex. P. 3) Mrs. Mahajan wrote to the U. C. S. asking for payment at Rs, 39 plus "profits till the date of sale" of her shares. On 30-1-1956 T. Stanes and Co. Ltd, wrote Ex. P. 4 to Mrs. Mahajan telling her that they would exercise their option under Section 153b of the act unless she obtained from the court an order to the contrary. Ex. P. 5 is a notice which Mr. Sriniyasa Iyer sent on behalf of Mrs. Mahajan to T. Stanes and Co. Ltd, demanding pavment at Rs. 45 per share. Ex.- P. 6 is the reply of Messrs. King and Partridge to Ex, P. 5 declining to consider the demand.