- (1.) The appellant is a limited Company carrying on transport business in South. Arcot District. M. A. Khadar, the contesting respondent in Civil Appeal No. 202 of 1965, holds 13 shares and his brother M. A. Jabbar, the contesting respondent in Civil Appeal No. 203 of 1965, holds 163 shares in the Company. Articles 29 and 30 of the Articles of Association of the Company read: "29. The notice shall name a future day, not being less than seven days from the service of the notice, on or before which such all or other money and all interest and expenses that may have accrued by reason of such non-payment are to be paid and the place where payment is to be made, the place so named being either registered office of the Company are usually made payable and shall state that in the event of non-payment at or before the time and at the place appointed the share in respect of which such payment is due, will be liable to be forfeited. 30. If the requisitions of any such notice as aforesaid be not complied with, any share in "respect of which such notice has been given may, at any time thereafter before payment of all money due thereon with interest and expenses, be forfeited by a resolution of the Directors to that effect."
(2.) On January 2, 1957, the Board of Directors of the Company passed a resolution calling the unpaid amount of Rs. 25 on each share. On January 3, 1957, a call notice was issued to the shareholders requesting payment on or before January 19, 1957. The call notice was duly served on the contesting respondents. As the call monies remained unpaid, the Company issued the following notice, dated January 20, 1957 to the respondents under Art. 29: Sir, As the call amount of the balance of Rs. 25 for every share held by you remains unpaid in respect of the notice, dated 3rd January 1957 issued in pursuance of the resolution of the Board. I hereby issue this notice calling upon you to pay the called amount at the registered office of the Company on or before Wednesday the 30th January 1957, together with interest at six per cent and any expenses that might have accrued by reason of such non-payment. Take further notice that in the event of non-payment as mentioned above, the shares registered in your name will be liable to be, once for all, forfeited without further notice and without prejudice to any legal action that may be taken against you for recovering the balance amount due from you treating the same as a debt due to and recoverable as such by the Company under Art. 14. By order of the Board (Signed) A. R. Hassain Khan, Managing Director." In spite of this notice, the respondents did not pay the call monies, and on February 11, 1957, the board of directors passed a resolution under Art. 30 forfeiting the shares held by them. On November 8, 1957, the respondents filed two separate applications under S. 155 of the Indian Companies Act, 1956 in the High Court of Madras praying that the forfeiture be set aside and the necessary rectifications be made in the share register of the Company. Ramachandra Ayyar, J. allowed the applications, and passed conditional orders for rectification of the register, and his decision was affirmed by the appellate Court. The Courts below held that in the absence of particulars of interest and expenses, the notice, dated January 20, 1957 was defective and the forfeiture is invalid. The Company now appeals to this Court on a certificate granted by the High Court.
(3.) In all standard articles of a company, the regulations relating to calls provide for payment of interest on the unpaid call money at a certain rate from the date appointed for its payment up to the time of actual payment, see regulation 14 of Table A in the first Schedule to the Indian Companies Act, 1913, regulation 16 of Table A in the first Schedule to the Indian Companies Act, 1956 and Palmer's Company Precedents, 17th Edn. Part I, p. 437 and the regulations relating to calls are followed by regulations relating to forfeiture like Arts. 29 and 30 of the appellant Company. In the light of Art. 29 read with similar regulations relating to calls, we would have no difficulty in holding that the notice, dated January 20, 1957 required payment of interest on the call money form the date appointed for the payment thereof, that is to say, January 19, 1957 up to the time of the actual payment. Unfortunately, all the regulations of the Company relating to payment of calls have not been printed, in the paper book, and in the present state of the record, we express no opinion on the question whether the notice is defective in respect of the demand for interest.;