VIJAY SHROFF Vs. SUDHIR ASHER

JUDGEMENT

(1.) In this Originating Summons the Plaintiffs, i.e. the executors under the Will and testment dt. 13th Sept. 1971 executed by Dharam Singh Suraiya had raised various questions including for determination of the question whether the bequest of shares in Food Specialities Pvt. Ltd. in favour of the defendants was a specific legacy or a general or demonstrative legacy in the facts and circumstances of the case and for other consequential reliefs. In the event this Court held that the bequest of shares in Food Specialities Pvt. Ltd. made under the Will of the testator was a demonstrative legacy in that event whether such shares and/or accretions thereto were liable to meet the general cost of administration by the executors at the first instance.

(2.) Vijay Shroff, Paresh Rajdar and Vijay Merchant were appointed the executors under the Will of the testator Dharam Singh Suraiya who died on 4th July, 1972 after making and publishing his last Will and testament dt. 13th of Sept. 1971. Probate of the said Will had been duly obtained by the executors. Under the said Will the testator devised and bequeathed his immovable and movable properties in favour of various legatees in the manner provided in the Will itself. The immovable properties belonging to the estate of the deceased had been transferred and/or made over in favour of the legatees and/or beneficiaries as bequeathed under the Will who had duly assented to the said transfer. Those immovable properties did not yield substantial income but have fetched meagre rent. Under the circumstances the executors had to rely upon the dividends collected in respect of the shares.

(3.) The testator during his lifetime was the owner of 12000 equity shares in Food Specialities Pvt. Ltd. out of which 3000 equity shares were pledged with the United Commercial Bank, Bangalore, 3000 further shares were also pledged with the Syndicate Bank, Bangalore. In Oct., 1976 the Syndicate Bank, Bangalore Branch had sold those 3000 shares pledged in their favour and appropriated the sale proceeds against its dues and the balance amount of Rs. 15,046.48 had been made over to the appropriate authorities towards Estate duty clearance. In July, 1978 the said Food Specialities Pvt. Ltd. issued right shares at the rate of six shares for every five shares held by the shareholders of the company. Under the circumstances the estate of the deceased testator was also entitled to the right shares for the remaining 9000 equity shares. At that time the executors had no sufficient funds available in their hands on the contrary they were saddled with various statutory as also administrative liabilities towards the said estate. As a result they had to surrender the option to purchase the said right shares in the Food Specialities Pvt. Ltd. At that relevant time the executors had in their hands a sum of Rs. 19,000/- available whereas the purchase price of the said 10,800 right shares were of the value of Rs. 1,35,000. In July, 1978 the executors sold the option to purchase the 7200 right shares in the said company to one M/s. Stewart and Co. at a price of Rs. 8.25 per share amounting to Rs. 59,400/- and out of the sale proceeds acquired 3600 ordinary right shares for a total consideration of Rs. 45,000/- The executors also redeemed 3000 shares of the company pledged with the United Commercial Bank. Thereafter in July, 1980 the Food Specialities Pvt. Ltd. issued bonus shares at the rate of one against one. As a result the executors held 25,200 shares including right shares in the said company.