Shelat - (1.) THESE two appeals, by Special Leave, arise out of two complaints, both of which were filed in respect of the same transaction and are therefore disposed of by a common judgment.
(2.) APPEAL No. 214 of 1968, is against the judgment of the High courtof Calcutta dismissing the complaint filed by the appellant on 5/01/1966, under S. 120-B, 406 and 420 of the Penal Code against Respondents 2 to 5, who are the directors and the secretary of M/s. Turner,Morrison and Co. Ltd. (hereinafter referred to as the company). The case of the appellant in the said complaint may be stated as follows: At the material time, the appellant, one S. Varma and FrankGoldstein were the liquidators of Hungerford Investment Trust Ltd. (involuntary liquidation) (hereinafter referred to as Hungerford). At allmaterial times Hungerford was the registered owner of 51 % of the shares ofthe company and as such was ordinarily entitled to have the control andmanagement of that company. These 51% of the shares numbered 2295shares of the face-value of Rs. 1,000.00 each. Out of these, 707 shares werein possession of the company.
(3.) RESPONDENT 5, Haridas Mundra, owned the balance of 49% shares.In or about 1961, Hungerford agreed to sell and Mundra agreed to purchasethe said 51% shares. Mundra filed a suit being suit No. 600 of 1961, againstHungerford in the High court of Calcutta for specific performance of thesaid agreement. The High court decreed the suit directing Hungerford todeliver the said 2,295 shares against payment of Rs. 86 lakhs and odd andissued, until delivery of the said shares was made to Mundra, an injunctionrestraining Hungerford from exercising its rights as holders of those 51%shares. The curious result of the said injunction was that Mundra couldget control and management of the company with the 49% shares held byhim without having to pay the price of the said 51% shares, until Hungerford gave delivery of all those 2,295 shares, out of which, as aforesaid, 707shares were in the custody of the company. The problem for Hungerfordwas how to get back those 707 shares from the company so as to be able todeliver all those 2,295 shares and obtain payment against such delivery ofRs. 86 lakhs and odd from Mundra. The said S. Varma, who was then residing in England, came toIndia in or about May, 1965. According to the complaint, Varma, accompanied by one N. K. Majumdar, went to the office of the company on 27/05/1965, and upon his request for the said 707 share certificates,obtained from Respondent 2 (D. M. Jaffray) the said share certificates.Varma thereupon issued a receipt for those share certificates and alsoexecuted an indemnity bond in favour of the company against any possibleclaims which Mundra might make in respect of those 707 share certificates.By the said bond the liquidators of Hungerford indemnified the company tothe extent of Rs. 53 lakhs said to have been paid by that company by way oftaxes for the Turner family, undertook to assist that company to recoverthat sum from the estates of that family and furthermore to produce the said757707 share certificates whenever required for delivery to Mundra in terms ofthe said decree and to indemnify any claim which might arise as a result ofdelivery thereof to Varma. It is clear that once those 707 share certificateswere handed over to Varma, Hungerford would, in terms of the said decree,be able to deliver to Mundra all the said 2,295 shares and Mundra wouldhave to take delivery of them against payment of Rs. 86 lakhs and odd.;