DAHIBEN UMEDBHAI PATEL Vs. NORMAN JAMES HAMILTON

JUDGEMENT

(1.) This is an appeal by original defendants Nos. 2 to 5 against a decree for Rs. 73,041 with interest on the principal amount of Rs. 53,500 passed by the learned single judge in Summary Suit No. 487 of 1972 (Norman J. Hamilton v. Umedbhai S. Patel [1979] 49 Comp Cas 1 (SC)).

(2.) The facts in this appeal are not in dispute. The plaintiffs-respondents entered into an agreement with original defendants Nos. 1 to 4 to sell to original defendant No. 1 and defendants Nos. 2 to 4 and these defendants agreed to purchase from the plaintiffs 875 ordinary shares and 1,780 redeemable cumulative preference shares of a company known as A. Mac Rae & Co. Pvt. Ltd. for a total price of Rs. 3,10,000. Out of these shares, 125 ordinary shares and 520 redeemable cumulative preference shares belonged to one Mrs. Khambatta, who was a non-resident. It was, therefore, agreed between the parties that if there was any difficulty in the sale of the shares belonging to Mrs. Khambatta, defendants Nos. 1 to 4 would purchase in any event 875 ordinary shares and 1,780 redeemable cumulative preference shares of the company from the plaintiffs for a price of Rs. 2,77,500. Out of this purchase price, Rs. 10,000 were to be paid on the signing of the agreement and the balance of Rs. 2,67,500 was to be paid by 10 equal annual instalments of Rs. 26,750. The first of such instalments was to be paid on or before December 31, 1967, and the subsequent instalments were to be paid on or before 31st December of each succeeding year. The fifth defendant guaranteed the above payments to the plaintiffs.

(3.) The plaintiffs accordingly sold and delivered to defendants Nos. 1 to 4,875 ordinary shares and 1,780 redeemable cumulative preference shares of A. Mac Rae & Co. Pvt. Ltd. and a sum of Rs. 10,000 was paid by the defendants to the plaintiffs on the signing of the agreement. The defendants, however, did not pay any of the annual instalments and the plaintiffs, therefore, filed to suit to recover the amount of the fourth and the fifth instalments.