JATIA COTTON MILLS LTD Vs. RAM PROSAD BAJORIA

JUDGEMENT

(1.) This appeal is against a judgment and decree dated March 27, 1972, passed by S. K. Roy Choudhury J., decreeing the suit, namely, Suit No. 1221 of 1966, which was filed by the first respondent against the appellant and the second respondent. The said suit was one for a declaration that the shares mentioned in the plaint belonged absolutely to the plaintiff and no other person had any right, title and interest therein. There was also a prayer for deleting the name of the second defendant (respondent No. 2 in the present appeal) in respect of the said shares and inclusion of the name of the plaintiff therein as the registered holder of the said shares in the books of the defendant No. 1 (appellant in the present appeal). There were also prayers for further reliefs in the suit, but we are not concerned with these in this appeal.

(2.) The facts relevant for the purpose of the present appeal are briefly as follows : On October 16, 1958, the second respondent, Ballavdas, purchased a lot of shares in Jatia group of companies at a public auction held by the Certificate Officer, 24 Parganas, for a sum of Rs. 3,500. In February, 1959, the said Ballavdas applied to the appellant-company, Jatia Cotton Mills Ltd., for registration of his name as the purchaser of the said shares in the auction sale. Ballavdas did not obtain the share scrips which were purchased by him in the auction sale. The company refused to register the name of Ballavdas in respect of the said shares. Ballavdas also claimed all dividends payable to him by the company in respect of the shares but the company did not pay the same. On November 20, 1961, Ballavdas made an application to this court for rectification of the share register of the appellant-company by deleting the name of K. L. Jatia, since deceased, who was the registered holder of the said shares and by inclusion of the name of Ballavdas. In the said application the company and also the heirs and legal representatives of K. L. Jatia were made parties. After a contested hearing this court made an order on March 9, 1962, directing rectification of the share register of the appellant-company in respect of the aforesaid shares by deleting the name of K. L. Jatia and inserting the name of Ballavdas. Thereafter, Ballavdas through his solicitor demanded from the appellant-company issue of duplicate share scrips and all arrears of dividends from October 16, 1958. It appears that the company did not comply with the said request of Ballavdas.

(3.) It was alleged that on October 6, 1964, Ballavdas sold the said shares to the plaintiff for Rs. 60 and the transfer deed was duly signed by the said Ballavdas. Ballavdas sold the whole lot of shares of Jatia group of companies purchased by him at the auction sale held by the Certificate Officer, 24-Parganas, to the plaintiff and it was alleged that the plaintiff paid a sum of Rs. 4,500 for the said lot of shares and Ballavdas granted receipt to the plaintiff in respect of the same. On June 10, 1965, Ballavdas forwarded a power-of-attorney executed by him in favour of the first respondent, Ram Prosad Bajoria, authorising him to act on his behalf until the duplicate share certificate was issued by the company and registered in the name of first respondent as the purchaser. He was also authorised to collect all arrears of dividends on the said shares. On June 18, 1965, the company replied to Ballavdas stating that the company was unable to take any notice of power-of-attorney and the sale of the said shares in favour of the first respondent and returned the said power-of-attorney to Ballavdas. Thereafter, on August 24, 1965, the plaintiff along with a covering letter sent the transfer deed duly filled up and stamped to the company for registration of his name with the company as a member in respect of the said shares purchased by him from Ballavdas and asked for issue of duplicate share certificate in his name. By its letter dated September 16, 1965, the company refused to register the said transfer on the ground that no share scrip was forwarded along with the application, the transfer deed was under-stamped and the transfer deed was undated. Thereafter, the first respondent filed the suit in this court for the reliefs mentioned hereinbefore.