R.T. PERUMAL Vs. JOHN DEAVIN

JUDGEMENT

(1.) R .T. Perumal the appellant in O.S.A. No. 11 of 1958 and D.R. Mahajan the appellant in O.S.A. No. 42 of 1958 are two shareholders in a limited company called the Nilgiri Neergundi Estates Company, Limited, hereinafter called the Neergundi Company which was incorporated on 22nd July, 1957 with a paid up capital of Rs. 3,67,076 consisting of 2000, 7 per cent, preference shares of Rs. 75 each, and 1,08,538 ordinary shares of Rs. 2 each. The main object of the company was growing and selling of tea and coffee. The company owned about 1447.62 acres of land out of which about 619 acres comprised coffee plantations and about 341 acres tea plantations. The company had no factory of its own in which the green tea leaf grown on its estate could be processed into marketable tea.

(2.) IN pursuance of the said resolution an agreement of sale and purchase, dated 1st October, 1955, was entered into between the Neergundi Company and the Kil Kotagiri Company. The consideration for the sale and transfer was the allotment by the purchasing company, that is, the Kil Kotagiri Company to every member of the selling company, that is, the Neergundi Company one ordinary share of Rs. 2 each in purchasing company credited as fully paid up for or in respect of every two fully paid ordinary shares in the selling company and a cash payment of Rs. 3,75,000 plus a sum equal to all cash in hand and at the bank at the date of completion. It was provided that the purchasing company should pay the selling company for all consumable stores belonging to the latter and that the coffee crop for seasons 1954 -55 be delivered to the agents of the Indian Coffee Board and all out standing book debts to the selling company. On 3rd September, 1955, both the appellants before us sent notices to the Liquidators appointed by the resolution under Section 208 -C of the Indian Companies Act, 1913, requiring them to purchase their interests as provided in that section. The Liquidators offered to pay to the appellants at Rs. 10 per share for the shares held by them but the appellants refused the offer. Mr. Perumal wanted Rs. 20 per share while Mr. Mahajan wanted Rs. 24 -8 -0 per share.

(3.) MR . O.T.G. Nambiar, learned Counsel for the respondents, liquidators took up a preliminary objection that the appeals were not competent. He mainly relied on the provisions of Section 17 of the Indian Arbitration Act which runs as follows: