LexTHE PUBLIC PASSENGER SERVICE LIMITED versus M. A. KHADER AND TWO OTHERS
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* .. A THE PUBLIC PASSENGER SERVICE LIMITED v. M. A. KHADER AND TWO OTHERS August 30, 1965 B [K. SUBBA RAo, J. R. MuDHOLKAR AND R. s. BACHAWAT, JJ.] Companies Act (1 of 1956), s. 155-Scope of. c D The respondents were shareholders in the appellant company. As they did not pay the call money on their shares, a notice under Art. 29 of the Articles of Association was issued and as the respondents defaulted in the payment demanded, their shares were forfeited under Art. 30. The respondents filed a petition under ss. 402 and 237 of the Companies Act, 1956, and obtained irrterim orders directing stay of collection of the moneys and restraining forfeiture of the shares, before the forfeiture by the appellant; but, as the call money was not paid into court as directed, the interim order was vacated and the petition was finally dismissed. Thereafter, the respondents filed an application under s. 155 praying that the forfeitures may be set aside and the necessary rectifications made in the share register. The High Court on its original side and in Letters Patent Appeal allowed the application, holding that the notice under Art. 29 Wa.9 defective and therefore the foreiture was invalid. In the appeal to this Court, HELD : The forfeiture was invalid, and therefore the names of the respondents were omitted from the share register without sufficient cause and the jurisdiction of the High Court under s. 155 was attracted and E rightly exercised. [687 BJ F G H A proper notice under Art. 29 is a condition precedent to forfeiture under Art. 30. The object of the notice under Art. 29 is to give the shareholder an opportunity for payment of the call money, interest and expenses. In the absence of particulars of expenses, the respondents were not in a position to know the precise amount which they were re- quired to pay and that slight defect in the notice invalidated it and was fatal to the forfeiture. [685 D-0] Section 155 (I) (a) (ii) allows rectification of the share register if the name of any person after having been entered in it, is without sufficient cause, omitted therefrom. The issue under the section is not whether the shareholder has sufficient cause to approach the Court, but whether his name has been omitted from the register without sufficient cause. [686 D; 687 Al Where by reason of its complexity or otherwise the matter can more conveniently be decided in a suit, the court may refuse relief under s. 155 and relegate the parties to a suit. But having found summarily that the notice V.tas defective and the forfeiture invalid, the Court could not arbitrarily refuse relief to the respondents. The unwarranted pro-- ceedings under ss. 402 and 237 and other vexatious proceedings started by the respondents have no relation to the invalidity of the forfeiture and the ·relief of rectification and were not valid grounds for refusing relief, even if it was an equitable one. [688 B-D] CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 202 and 203 of 1965. 684 SUPREME COURT REPORTS [I 96b] l S.C.R. Appeals from the judgment and decree dated December 21, A 1961 of the Madras High Court in 0. S. Appeals Nos. 55 and 56 of 1959. K. K. Venugopal and R. Gopa/akrishnan, for the appellant ,. A. V. Viswanatlza Sastri, P. Ram Reddy and A. V. V. Nair, B for respondent No. I. The Judgment of the Court was delivered by Bachawat, J. The appellant j, a limited Company carrying on transport business in South Arcot District. M. A. Khader, the contesting respondent in Civil Appeal No. 202 of 1965, holds 13 shares and his brother, M. A. Jabbar, the contesting respon- dent 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 pay- ment is to be made, the place so named being either registered office of the Company arc usually made payable and shall state that in the event of non-payment at or hefore the time and at the place appointed the share m respect of which such payment is due, will be liable to be forfeited. 30. If the requisition" of any such notice as afore- said be not complied with. any share in r
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