HUNGERFORD INVESTMENT TRUST LIMITED IN VOLUNTARY LIQUIDATION Vs. HARIDAS MUNDHRA

JUDGEMENT

(1.) This is an appeal with certificate from a judgment of a Division Bench of the Calcutta High Court, setting aside the order of a single judge of the Court allowing an application filed by the appellant for rescission of an agreement for sale dated October 30, 1956, as also the decree dated February 25, 1964, for specific performance of the agreement and for other alternative reliefs specified in the application.

(2.) Hungerford Investment Trust Limited (in voluntary liquidation) hereinafter called Hungerford was the owner of 100 per cent shares in Turner Morrison & Co., hereinafter called "Turner Morrison . John Geoffrey Turner and Nigel Frederic Turner, both since deceased, were the owners of the 100 per cent shares of Hungerford. The entire share capital to Turner Morrison consisted of 4,500 fully paid up ordinary shares of Rs.1,000.00 each.

(3.) By exchange of letters it was agreed that Haridas Mundhra, hereinafter called Mundhra; would purchase from Hundgerford, 49 per cent shares of Turner Morrison. The agreement also provided for an option to Mundhra of purchase from Hungerford, the balance of 51 per cent shares to Turner Morrison within 5 years. A formal agreement dated October 30, 1956, was executed between Hungerford, John Geoffrey Turner and Migel Frederic Turner on the one hand, and British India Corporation and Haridas Mundhra on the other, embodying the terms of the agreement. Pursuant to this agreement., 49 per cent of the shares in Turnover Morrison was sold and transferred to Mundhra and his nominee British India Corporation. Thereafter, Mundhra exercised his option to purchase the 51 per cent shares. But the shares were not sold or transferred to him. So on April 19, 1961, Mundhra filed a suit against Hungerford, Turner Morison and others for specific performance of the agreement to sell the 51 per cent shares (Suit No. 600 of 1961.) As Mundhra did not want to proceed against Turner Morrison, the suit was dismissed as against that company and a decree was passed on February 25, 1964. The decree provided that the agreement relating to the sale of 51 per cent ordinary shares of Turner Morrison ought to be specifically performed and directed Hungerford to deliver to Mundhra, the 51per cent shares against payment of the consideration of Rupees 86,60,000/-. An injunction was also granted restraining Hungerford and the other defendants in the suit from voting except in accordance with the instruction of Mundhra and restraining Hungerford from selling the shares to any person other than Mundhra. The decree, except as regards the injunction, was stayed by the trial judge, on the application of the appellant, for 3 weeks.