Decided on September 14,1970



B.C.Mitra, J. - (1.) This is an off-shoot of a spate of litigations arising out of an agreement for the sale of the controlling block of shares of a private company, Turner Morrison and Co. Private Ltd. The aims and objects of the seller and the buyer of the shares have shifted and changed with dramatic suddenness. The seller at one stage eager to complete the sale was stoutly resisted by the buyer. Later on the position changed altogether and the buyer shifted his position to one of great keenness to complete the sale and acquire the shares, the seller by then started advancing a claim for rescission of the contract for sale. This is the quick changing scene which forms the background of the matter.
(2.) The application out of which this appeal arises was made by Hungerford Investment Trust Ltd. (in voluntary liquidation) the appellant and others for an order that the agreement dated October 30, 1956, and the decree dated February 25, 1964, do stand rescinded, for an order directing the Receiver to tender to the respondent No. 1 Haridas Mundhra 2,295 shares of Turner Morrison and Co., Ltd., and payment to the Receiver of a sum of Rs.86,60,000/-, for an order that upon failure of Haridas Mundhra to take delivery of the shares and pay the price thereof, the agreement for sale do stand rescinded on expiry of the date and time without any further order of this Court, and for various other reliefs.
(3.) By exchange of letters Hungerford Investment Trust Ltd. (in voluntary liquidation) (hereafter referred to as the vendor) agreed to sell to one Haridas Mundhra 2,205 fully paid-up shares of Rs.1000/- each (being 49% of the subscribed capital) of Turner Morrison and Co. Ltd. (hereafter referred to as the company). By the agreement an option was given to Haridas Mundhra to purchase the remaining 51% shares of the company within 5 years, on terms and conditions mentioned in the letters exchanged between the parties. The exchange of letters was followed by a formal agreement on October 30, 1956. By this agreement 49% of the shares in the capital of the company was sold to Haridas Mundhra and his nominee British India Corporation Ltd., and the option mentioned above was also reserved to Mundhra. In exercise of this option Mundhra claimed 51% shares of the company, which not having been sold and transferred to him, on April 19, 1961, he filed a suit in this Court (No.600 of 1961) against the vendor and others for specific performance of the agreement. The company was a party defendant to the suit but as Mundhra did not wish to proceed against the company, the suit as against the company was dismissed, and on February 25, 1964, a decree for specific performance of the agreement was passed in the suit. This decree declared that the agreement relating to sale of 51% Ordinary Shares of the company ought to be specifically performed, the vendor was directed to deliver to Mundhra 51% Ordinary Shares of the company against payment of the consideration fixed at Rs.86,60,000/-. An injunction was issued restraining the vendor and other defendants in the suit from voting, except in accordance with the instruction of Mundhra. An injunction was also granted restraining sale of the shares to any one other than the plaintiff in the suit.;

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