IN RE: BENGAL ELECTRIC LAMP WORKS LTD Vs. STATE

JUDGEMENT

(1.) This is the petition of Prafulla Kumar Basu, who asks for an order for rectification of the register of members of the respondent company by restoring the petitioner's name as the holder of 1500 ordinary shares. He states that he was the registered holder of 1500 ordinary shares in the capital of the company, having applied for allotment on or about 6 January 1940 and having paid Rs. 1500 to the company along with his application for and on behalf of one Kamta Prosad Bhargava. The company decided to treat the petitioner as the absolute owner of the shares and declined to recognise Bhargava as having any right in the said shares or to register the transfer of the shares to him. On 2 February, 1941 the petitioner received a letter from the company informing him that the sum of Rs. 13,500 due for calls on his shares was long overdue, "as per details given below," namely:

(2.) Further, the petitioner was informed that the Directors required him on or before 28th February 1941 to pay the sum of Rs. 13.500 at the registered office of the company at 14 Clive Street, Calcutta, and that in the event of non-payment the shares would be liable to be forfeited. The petitioner admits that he received the notice of allotment and also notice of the purported fourth call dated 18 November 1940, but no notice of the purported first, second and third calls was ever given to him. In reply to the letter of 18 November giving notice of the fourth call, the petitioner wrote putting on record that he had not received any other notice of call. Subsequently, one Gopee Ballav Sen wanted to take a transfer of his shares from the petitioner and was willing to pay the balance of the face value of the shares in full. Accordingly on 28 February 1941 the petitioner and Gopee Ballav Sen executed a deed of transfer and the petitioner wrote a letter addressed to the company saying that he had transferred the shares to Mr. Sen and that the latter would pay Rs. 13,500 to the company. On the same date Mr. Sen forwarded to the company the transfer deed and the letter from the petitioner, accompanied by a cheque for Rs. 13,512-4-0 being the balance of the face value of the shares, together with a sum of Rs. 11-40 for stamps for the transfer and Re. 1 for transfer fee. The company refused to register the transfer. On 14 April 1941 the petitioner received a letter from the company dated 2 April, 1941 intimating that by a resolution of the board of directors passed on 31 March 1941 the shares standing in the name of the petitioner had been forfeited.

(3.) In the affidavit in opposition made by the managing director of the company dated 12th May 1941 it is contended that notice of every call was sent to the petitioner and with regard to the first call the respondents produced a peon book signed by Mr. B.K. Mittra who, they alleged, was an assistant of Messrs. Indian Loan & Trading Co., Ltd., of which the petitioner is a director. The registered office of that company is situated at No. 102H, Russa Road which is the residential address of the petitioner. The notice of the second call was sent by post and is evidenced by the despatch book of the company. The notice of the third call was sent by peon book signed by the petitioner himself. I am satisfied that the notices of all these calls reached the petitioner. The relevant Articles of Association of the company are as follows: 7. If, by the condition of allotment of any shares the whole or part of the amount or issue price thereof shall be payable by instalments, every such instalment shall, when due, be paid to the company by the person who for the time being shall be the registered holder of the share or his legal representative. 15. The directors may from time to time, make such calls as they think fit upon the members in respect of all moneys unpaid on the shares held by them respectively, and not by the conditions of allotment thereof made payable at fixed times, and each member shall pay the amount of every call so made on him to the persons and at the times and places appointed by the directors. A call may be made payable by instalments. 17. Fifteen days notice of any call shall be given specifying the time and place of payment, and to whom call shall be paid. 23. If any member fails to pay any call or instalment on or before the day appointed for the payment of the same the directors may at any time thereafter during such time, as the call or instalment remains unpaid, serve a notice on such member requiring him to pay the same, together with any interest that may have accrued, and all expenses that may have been incurred by the company by reason of such non-payment. 24. The notice shall name a day and a place or places on and at which such call or instalment and such interest and expenses as aforesaid are to be paid. The notice shall also state that in the event of non-payment at or before the time and at the place appointed, the shares in respect of which the call was made or instalment is payable will be liable to be forfeited. 25. If the requisitions of any such notice as aforesaid are not complied with any shares in respect of which such notice has been given, may, at any time thereafter before payment of calls or instalments, interest and expenses due in respect thereof, be forfeited by a resolution of the directors to that effect. Such forfeiture shall include all dividends declared in respect of the forfeited shares, and not actually paid before the forfeiture. 33. The provisions of these articles as to forfeiture shall apply in the case of non- payment of any sum which by the terms of the issue of a share becomes payable at a fixed time, whether on account of the amount of the share, or by way of premium, as if the same had been payable by virtue of a call duly made and notified. 36. The directors may at any time in their absolute and uncontrolled discretion and without assigning any reason decline to register any proposed transfer of shares. This clause shall also apply to a case where the proposed transferee is already a member. 99. The directors may meet together for the despatch of business, adjourn and otherwise regulate their meetings and proceedings as they think fit, and may determine the quorum necessary for the transaction of business. Until otherwise determined three directors shall be a quorum. A director interested is to be counted in a quorum notwithstanding his interest. 100. A director may at any time convene a meeting of the directors. It shall not be necessary to give notice of a meeting of the directors to a director who is not in Calcutta. Questions arising at any meeting shall be decided by a majority of votes, and in case of any equality of votes, the chairman shall have a second or casting vote. 106. A resolution in writing signed by all the directors present in Calcutta shall be as valid and effectual as if it had been passed at a meeting of the directors duly called and constituted. 108. The directors shall cause minutes to be duly entered in books provided for the purpose: (a) Of the names of the directors present at each meeting of the directors and of any committee of directors. (b) Of all orders made by the directors and committees of directors, (c) Of all resolutions and proceedings of general meetings and of meetings of the directors and committees. And any such minutes of any meeting of the directors or of any committee or of the company, if purporting to be signed by the chairman of such meeting or by the chairman of the next succeeding meeting, shall be receivable as prima facie evidence of the matters stated in such minutes. 145. Any notice sent by post shall be deemed to have been served on the second day following that on which the envelope or wrapper containing the same is posted and in proving such service it shall be sufficient to prove that the envelope or wrapper containing the notice was properly addressed and put into the post office. And a certificate in writing signed by the manager, secretary or other officer of the company that the envelope or wrapper containing the notice was so addressed and posted shall be conclusive evidence thereof. Any notice which may be given by advertisement shall be deemed to have been served when the newspaper containing the notice is published.