NARANDAS MUNMOHANDAS Vs. INDIAN MANUFACTURING CO LTD

JUDGEMENT

(1.) THIS is an appeal against the Judgment of Desai J. and the appeal involves a very short question as to the construction of Section 30 (2), Companies Act, and the construction becomes necessary under circumstances which we will presently relate. Plaintiff No. 1 is the father of plaintiffs Nos. 2 and 3 and they filed a suit for a declaration that certain shares which they held in the first defendant company were not subject to the lien of the company and that the company was not entitled to enforce a lien against these shares. The shares with which we are concerned are five shares registered faintly in the names of plaintiffs 1 and 2, 44 shares registered jointly in the names of the three plaintiffs, and three half shares also registered jointly in the names of the three plaintiffs. The plaintiffs also had one share jointly with Bal Harkuverbai, the wife of plaintiff 1, and with regard to this share the question arises because of the counterclaim to which a reference will be presently made. The first defendant company filed its written statement and also a counterclaim, and in the counterclaim they made Harkuverbai also a defendant and they claimed by the counterclaim a Hen on all the shares to which reference has just, been made, also a right to enforce its lien and the counterclaim stated that the lien was being exercised by reason of a debt due by plaintiff 2 to the company. When the matter came for hearing before Desai J. , the plaintiff admitted that a sum of over Rs. 6,00,000 was due by plaintiff 2 to the defendants and all issues of fact which arose on the pleadings were admitted by the plaintiffs. The plaintiffs contented themselves with arguing before the learned Judge below a short and narrow point of law, and the point that they put forward was that as the debt was due solely by plaintiff 2 and as the shares did not belong to plaintiff 2 alone but were the joint shares of plaintiff 2 along with plaintiff 1 or plaintiff 3 or Harkuverbai, the company had no right to enforce the lien in respect of these shares. The learned Judge decided this point of law against the plaintiffs and passed a decree in favour of defendant 1. It is from that decision that this appeal is preferred.

(2.) NOW, the article on which the company relies is Article 29 and that article, to the extent that it is material, provides:

(3.) THEREFORE, you must have for the purposes of this sub-section a person and you must have an agreement between that person and the company, and when that agreement is entered into to become a member of the company that person becomes a member and it is also necessary that his name should be entered in the register of members as a member.