LexSHA MULCHAND & CO. LTD. (IN LIQUIDATION) versus JAWAHAR MILLS LTD.
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, '' ' S.C.R. SUPREME COURT REPORTS 351 SHA MULCHAND & CO. LTD. (IN LIQUIDATION) • v. JAW AHAR MILLS LTD. [MEHR CHAND MAHAJAN, DAs, VIVIAN BosE and GHULAM HASAN JJ.] Company-Forfeiture of shares-Necessity of due notice-Appli- cation by shareholder to rectify register-Long delay-Acquiescence, waiver and laches-Abandonment of right to question validity of for- feititre-Application for rectification of register-Limitation- Limitation Act, 1908, Arts. 48, 49, 120, 181, applicability of- Oompanies Act, 1913, ss. 38, 'J47. A private limited company of which G and S were the only two members owned 5,000 shares in a Mill. The company did not pay the calls and the 5,000 shares held by them were forfeited on the 5th September, 1941, and re-allotted to other persons on the 16th November . .Notice of the forfeiture was sent to the company on the 10th September but this was returned undelivered. In the meantime the company was struck off the Register under s. 247 of the Companies Act with effect from 9th September. On the appli- cation of S the company was restored to the Register and an Official Receiver was appointed on 16th February, 1945, to wind it up. On the 5th March, 1946, the Official Receiver took out a summons calling upon all parties to show cause why the share register of the Mills should not be rectified by restoring the name of the company to the register in respect of the 5,000 shares, as the forfeiture thereof was invalid. The trial Judge held that the forfeiture was invalid for want of sufficient notice, that the plea of estoppal, acquiescence and !aches raised by the Mills was untenable, aud that the application was governed by Art. 120 of the Limitation Act and was not time-barred, and ordered that, as the advocates had agreed to such a course, 5,000 new shares may be issued to the company. The High Court on appeal found that the forfeiture was invalid, that the application was not time- barred and that no acquiescence, waiver or estoppal had been established, but held that the company had, by the conduct of G and S and the long delay in reviving the company, abandoned its right to challenge the forfeiture and that there was also no legal basis on which the order passed by the trial Judge could be sup- ported. On further appeal : Held, (i) if the facts on record were insufficient to sustain a plea of waiver, acquiescence or estoppal as held by both the lower Courts, a plea of abandonment of right which is an aggravated form of waiver, acquiescence or !aches and akin to estoppal cannot be sustained on the same facts. · t6 1952 Dec. 9 . 1952 Sha Ilfulchand and Co., Ltd. v. Jawahar Mi.lls Ltd. 352 SUPREME COURT REPORTS [1953J (ii) Whatever be the effect of mere waiver, acquiescence or laches on the part of a person on his claim to equitable remedy to enforce his rights under an executory contract, mere waiver, a.oquiescence or Etches which does not amount to an abandonment of his right or to an estoppal against him, cannot disentitle that parson from claiming relief in equity in respect of his executed interests. Prendergast v. Tlbrton ([184l] 62 E.R. 807), Clarke and Chap. man v. Hart ([1858] 6 H.L.0. 632), Jones v. North Vancouver Land and Improvement Co. ([1910] A.O. 317) explained. Garden Gully United Qnartz lrlini11g Company v. H"Oh Mclister ([1875] 1 App. Oas. 39) relied on. . (iii) There was no evidence in the case of any conduct on the part of S or G subsequent to the date of forfeiture and anterior to the 11ills changing its position to its detriment, upon which a plea of abandonment of the right to challenge the forfeiture could be based. Srnith, Stone and Knight v. Birmingharn Corporation ([1939] 4 All E.R. 116) distinguished. (iv) On· a proper construction of the statements made by the counsel, the form of the order to which the counsel bad agreed could not be challenged by the Mills. (v) The application was not governed by Arts. 48 or 49 of the Limitation Act as a claim for rectification of tbe register simplici- ter does not necessarily involve a claim for the return of the share scrips and there was no prayer in the case for return of the scrips. (vi) Article 181 applies only to applications under the Civil Procedure Code, and even if the said article was applicable, time began to run under the article only·· from the date on which the company knew of\the forfeiture of the shares; .and as the company had no· kno
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