KOTHARI AND SONS Vs. V. KRISHNA RAO
HIGH COURT OF MADRAS
KOTHARI AND SONS
V. Krishna Rao
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Satyanarayana Rao, J. -
(1.) THE defendants, a firm of stock brokers and commission agents, Madras, are the appellants in this second appeal They were sued by the respondent to recover a sum of Rs. 1064 -14 -0 for damages caused by, their negligence in effecting a sale of 40 shares of the Travancore National and Quilon Bank Ltd., hereinafter called the Bank. The shares were of the paid -up value of Rs. 25 each, the face value of which was Rs. 50. The pltff. with a view to have the shares sold, requisitioned the services of the defendants and on 9 -5 -1938 by Ex. P. 1 the shares were handed over to the defendants. The bank went into liquidation in 1938 and on 10 -3 -1939 a demand was made on the plaintiff by the liquidators of the bank for payment of the unpaid call money. He thereupon came to know from the defendants by their letter of 20 -4 -1939 that the shares were in fact sold to the bank. The plaintiff made an unsuccessful attempt in the High Court by an application to have the share register rectified by excluding his name from the list of contributories. The application was dismissed on 19 -12 -1941. The plaintiff was thereafter obliged to pay from time to time the balance calls amounting in all to Rs. 1000 and odd. The first payment was made on 13 -3 -1944 and the last was on 20 -4 -1945. On 1 -10 -1945 the present suit was instituted by the plaintiff to recover the sum as damages on the ground that the defendants) by their negligence brought about an invalid sale as they should have known that the bank could not buy its own shares by reason of the prohibition contained in Section 55, Companies Act. The suit was instituted in the District Munsif's Court Vellore.
(2.) THE suit was resisted by the defendants on three principal grounds : firstly that it was barred by limitation under Article 90 Limitation Act; secondly that the Court had no territorial jurisdiction to try the suit as the cause of action did not arise within its jurisdiction; and lastly that there was no negligence on their part. Both the Courts below disallowed the objections of the defendants and granted a decree in favour of the plaintiff. Hence this second appeal. The same grounds have been repeated before me. Grounds Nos 2 and 3 may be disposed of easily. Regarding want of jurisdiction in the Court which tried the suit, the defendants were not able to establish any prejudice which affected the merits of the case to entitle a reversal of the decree on the ground of want of jurisdiction assuming that the Court had no jurisdiction. The question of negligence is one of fact and the Courts below arrived at a concurrent finding that the plaintiff was able to establish negligence on the part of defendants as they did not take the simple precaution of not selling the shares to the bank itself. There is no ground to interfere with the finding of fact.
(3.) THERE remains the question of limitation. Under Article 90, Limitation Act, for "other suits by principals against agents for neglect or misconduct" a period of three years is provided for and time begins to run from "when the neglect or misconduct becomes known to the plaintiff". It was argued on behalf of the appellant that on the facts as stated, above, the plaintiff had definite knowledge that the shares were sold to the bank at least on 20 -4 -1939 and as the suit was filed more than three years from the date it was barred by limitation. But it must be mentioned that by that date no damage in fact had accrued to the plaintiff. The plaintiff was later called upon to pay the calls and it was not until 20 -4 -1945 that the last of the payments was made, the first of such payments having been made on 13 -3 -1944. If the period of limitation is to be counted from those dates, undoubtedly the suit is in time. But unfortunately, that is not the language of the third column of Article 90 Limitation Act.;
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