M S PALANIAPPA MUDALIAR (AS GUARDIAN OF HIS MINOR DAUGHTER MEENAKSHI) Vs. OFFICIAL LIQUIDATOR, THE PASUPATHI BANK LTD

JUDGEMENT

(1.) This Civil Miscellaneous Appeal is from an order of the learned District Judge of Coimbatore made in an application under Section 184 of the Indian Companies Act to settle the list of contributories. He was concerned with the 18 contributory. He has, by his order, placed the father of the 18 contributory on the list and the latter appeals.

(2.) We have before us very little material : but it is evident that the following essential facts were not in dispute. An application was made by M.S. Palaniappa Mudaliar as guardias of his minor daughter Meenakshi for shares and the company issued shares to and registered shares in the name of Meenakshi, describing her as a minor. This transaction was void on the face of it. An application for shares cannot be a necessity for a minor; but the bank evidently regarded it as a valid transaction and the Official Liquidator claimed against the minor for contribution when the company went into liquidation. The minor through her father Palaniappa Mudaliar filed an affidavit setting up her minority and disclaiming any personal responsibility. There was a reply by the Official Liquidator in which he contended that if the minor is not liable, the father of the minor who signed the application must be deemed to have contracted for the shares and should be placed on the list of contributories. The learned District Judge accepted this contention and has made an order against the father of the 18 contributory, the minor Meenakshi Animal. He based his decision on In the matter of the Muslim Bank of India Ltd. (in liquidation), Lahore I.L.R. (1939) Lah. 299. In that case, Young, C.J., and Monroe, J., made an order against the father of a contributory who had applied on behalf of his son, who, in fact, was a minor. It is not stated that the son's minority was revealed. The learned Judges decided in favour of the liquidator relying on the English cases. They pointed out that in the case of Pugh & Sharmari (1872) L.R. 13 Eq. Cases 566, the Vice Chancellor had held that a person who contracted in the name of another not being a legal entity must be deemed to have contracted personally. In that case, which was before the Married Women's Property (Act of 1891, an applicant had applied for shares in the name of a married woman, not revealing that fact to the company. Malins, V.C., held that he was liable and that it was quite clear that Shannon intended to become the owner of the shares and derive from them all the benefits that they could give. Richardson's case (1875) L.R.19 Eq. Cases 588, was a case where shares were registered in the name of the minor boy's father, the fact of minority not being revealed to the company and who signed the minor's name, which, of course, he had no authority to do. In re National Bank of Wales Ltd (1907)1 Ch. D. 582, (Massey and Giffin's case), Parker, J., discussed Sharman's case (1872) L.R. 13 Eq. Cases 566 and Richardson's case (1875) L.R.19 Eq. Cases 588, and described them as being cases in which there was in reality some contractual relation between the company and the person whose name it was sought to be placed on the register. As the learned Judge points out at page 589: Both these decisions which are based on the ground that the person on the register was merely an alias of the person whom it was sought to put on the register in his place, appear to me to be clearly distinguishable from King's case (1871) L.R. 6 Ch. Ap. 196, where the man whom it was sought to put on the register was altogether a stranger to the company. No case has been cited in which the facts or principle involved are similar to this now before us. There is no suggestion that the Pasupathi Bank, Ltd., were unaware of the contributory's minority : they knew they were being invited to contract with a minor and they thought fit to contract with the minor. The application by Palaniappa Mudaliar was made on behalf of his minor daughter. There is nothing on the record to show that he had at any time intended to become a subscriber of the company. There is no evidence that any of his money was used for the purpose. It seems to be clear that the contract was made by both sides under complete misapprehension as to the law, but no misapprehension whatever as to the facts. Under the law it was void. We do not think that either Shartnan's case (1872) L.R. 13 Eq. Cases 566 or Richardson's case (1875) L.R.19 Eq. Cases 588, is of any assistance to the Official Liquidator. The distinction drawn by Parker, J., between cases where the contributory was held to be contracting under an alias and cases where there was never any intention on the part of the person sought to be made a contributory to become a subscriber or of the company to treat him as a subscriber as in this appeal seems to be entirely applicable.

(3.) The Official Liquidator has not appeared to support the judgment of the lower Court but we have had the advantage of an interesting argument and a consideration of all the relevant authorities from the learned Counsel for the appellant, Mr. W. S. Krishnaswami Naidu. In our view this appeal should be allowed with costs which will be paid by the Official Liquidator out of the assets of the bank.