H.V. JAYARAM versus THE INDUSTRIAL CREDIT AND INVESTMENT CORPN. OF INDIA LTD. AND ORS. ETC.

Citation: [1999] SUPP. 5 S.C.R. 336 · Decided: 15-12-1999 · Supreme Court of India · Bench: K.T. THOMAS · Disposal: Dismissed

Judgment (excerpt)

A 
H.V. JAYARAM 
v. 
THE INDUSTRIAL CREDIT AND INVESTMENT CORPN. 
OF INDIA LTD. AND ORS. ETC. 
B 
DECEMBER 15, 1999 
[K.T. THOMAS AND M.B. SHAH, JJ.] 
Companies Act, 1956 : 
C 
Sections 53 and I I 3 (2)-Failure to deliver share certificates within 
the statutory time limit-Summons issued on the criminal complaint filed by 
the appellant-Applications seeking discharge rejected by the trial court on 
the ground of lack of territorial jurisdiction-High Court held cause of 
action arose at the place where the registered office of the respondent 
D company is situated-On appeal, Held: Where documents sent by post, service 
deemed to be effected by properly addressing, prepaying and posting the 
letter-Cause of action would arise at the place where the registered office 
of the company is situated-Posting of certificates within the stipulated time 
E 
amounts to compliance of Section I I 3. 
· 
Sections 205(5) (b) and 207-Dividend warrant addressed to the -
registered address of the shareholder-Post Office becomes the agent of the 
shareholder-Loss of dividend warrant is at the risk of the shareholder-
Offence of not posting dividend warrant within 42 days would occur at the 
registered office of the company. 
F 
The appellant was a purchaser of shares of the respondent company. 
As the respondent company failed to deliver shares to the appellant within 
the time limit stipulated under Section 113 (2) of the Companies Act, 1956, 
the appellant lodged criminal cases before the Special Court for Economic 
Offences at Bangalore. Respondents' applications for discharge were rejected 
by the trial court on the ground of lack of territorial jurisdiction which was 
G challenged before the High Court. In view of the fact that documents were 
sent to the respondent by post, as requested by himself, the High Court held 
that the cause of action would arise only where the head office of the respondent 
company is situated. Hence the present appeals. 
H 
The appellant contented that being a purchaser of shares and a resident 
336 
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HV. JAYARAM1•. INDUSTRIAL CREDIT AND INVESTMENTCORPN.OFINDIALTD. 337 
of Bangalore, he was entitled to receive the share certificates at Bangalore A 
and therefore, the cause of action would also arise at Bangalore. 
Dismissing the appeals, this Court 
HELD 1.1. Section 113 of the Companies Act, 1956 inter alia requires 
that within three months after the allotment of any shares and within two B 
months after the application for registration of the transfer of any such 
shares, every company shall deliver, in accordance with the procedure laid 
down in Section 53 of the Companies Act, 1956, the certificates of all the 
shares allotted or transferred. Sub-section (2) provides punishment if default 
is made in complying with Sub-section (1). Reading Sections 113 and 53 
together, share certificates are to be delivered in accordance with the C 
procedure laid down in Section 53. A document is to be served either 
personally or by sending it by post at registered address within India. Sub-
section (2) specifically mentions that where a document is sent by post, such 
service thereto shall be d£emed to be effected by properly addressing, prepaying 
and posting the letter containing the document. Hen.ce, once there is a statutory D . 
mode of delivering the document by post and deeming provision of such 
delivery, the place where such posting is done is the place of performance 
of statutory duty and the same stands discharged as soon as the document 
is posted. Hence the cause of action for default of not sending the share 
certificates within stipulated time would arise at the place where the registered 
office of the company is situated as from that place the share certificates can E 
be posted and are usually posted. If the addressee is available in the same 
locality where the registered office of the company is situated, it is reasonable 
to think that service of document may be effected by personally delivering 
to him. But if the addressee is residing at a distant place it is unreasonable 
to expect the company to depute somebody to travel upto that distance to 
personally deliver it to him. The only usual mode which any company would F 
then adopt is to send to him by post For such default, as contemplated under 
Section 113 (1) of the Act, there is no question of any cause of action arising 
at the place where complainant was to receive postal delivery. Non-delivery 
of share certificates within the p

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