IN RE: INDIAN COMPANIES ACT (VI OF 1882); IN RE: CREDIT BANK OF INDIA LIMITED (IN LIQUIDATION); FAZULBHOY JAFFER Vs. CREDIT BANK OF INDIA LIMITED (IN LIQUIDATION) BY ITS OFFICIAL LIQUIDATOR, RDSETHNA

JUDGEMENT

(1.) The appellant appeals from an order of the Chamber Judge including him in the list of contributories in the Credit Bank of India, a limited Company now being wound up by the Court. The appellant applied for fifty shares in this Company which were allotted to him on the 8th of January 1910 on payment of Rs. 10 per share, the nominal Value being Rs. 50 if he has been rightly included among the contributories he will be liable for Rs. 40 per share. He contests his liability on the ground that, he was a minor at the date of the allotment. It is not disputed that he attained majority in August 1912. He has received dividends at the rate of six per cent, per annum on the sums paid upon his shares twice in each of the years 1911, 1912, and 1913, and he has raised no objection to his name being included in the register of members until January 1914. Under these circumstances it cannot be doubted that he has intentionally permitted the Company to believe him to, be a shareholder and in that belief to pay him dividends on his shares since he attained majority. He is therefore estopped now by his conduct while a person sui juris from denying as between himself and the Company s representative that he is a share-holder.

(2.) This is sufficient to dispose of the appeal; but we will express our opinion upon the point made in the excellent argument of Mr. Kanga. His contention was that the matter must be decided according to the law contained in the Contract Act under which a minor is not competent, to contract and therefore it cannot be said that he has agreed with the Company to become a member which is one of the conditions of membership under the Companies Act of 1882, Section 45. This argument would be more convincing if the words usual in Section 45 were "has contracted with the Company," for under the Contract Act it is not every agreement that is a contract. Moreover, it appears from the Statutory Article 45 in Table A of the Companies Act that a minor may be a member of a Company under that Act.

(3.) It has been settled law in England for many years that a registered holder of shares in a Statutory Company is a person with a vested interest in property which may be burdened with an obligation to pay calls in the future. The registered member "cannot keep the interest and prevent the Company from having it, and dealing with it as their own, without being bound to bear the burthen attached to it": London and North-Western Hallway Co. v. M Michael (1851) 20 L.J. Ex. 97 at p. 101.