Case: Navinchandra Ratilal Patel Vs. S Gordhandas Desai Private Limited

that he would have no objection if this question of title was not gone into in this petition and if he was permitted to get the question of title decided by a separate suit if so advised. Shri Ramanathan raised no objection to this suggestion of Shri Madon, though he strongly relied on section 84 of the Act in support of his argument that the certificates of shares produced by he company would be prima facie evidence of the title of his clients in respect of these 600 shares before the allotments were cancelled by the company, and the name of Gordhanbhai entered on the shares. Since both the parties are not anxious to agitate the question of title, we have no gone into the same in these proceedings.(7) THE first question, therefore, which arises for consideration is whether the company omitted the names of the petitioners from its register of members in April, 1960, without sufficient cause. Shri Madon, in our view, is right in his contention that the original allotment made in favour of the petitioners was invalid because the allottees were minors and that the company was entitled to repudiate the allotment. But even assuming that was so, we do not think the company was entitled to proceed to delete the names of the petitioners from its register of members, and rectify the register in respect of these 600 shares in favour of the deceased, Gordhanbhai, without approaching the proper court in that behalf, especially as the interest of the minors was involved. In our view the company was not, in law, justified in deleting the names of thee petitioners in the way it did and the omission of their names from the register of members is consequently without sufficient cause. We, therefore, decide thee first issue in favour of the petitioners in both these petitions. (8) SHRI Madon then strongly relies on certain facts in support of his contention that both the petitions are barred by limitation. He points out that thought it is the case of the petitioners that they came to know of the omission of their names only in he beginning of March, 1966, his clients have denied this allegation. He also relies on he admission of the petitioners that they used to receive notices of the meetings of the company till the year 1960. He has further relied on he letter addressed by the company o respondent No. 2, Ratilal Ishwarbhai Patel, on 24th May, 1960, pointing out that as per resolutions passed at he meeting of the board of directors of the company held on 1st April, 1960, his sons, Prafulkumar and Navinchandra, are no longer members of the company. We are not, however, prepared to impute notice about the action of the company to the minors on the basis of these facts. Nor are we prepared to accept the allegation made in the petition that the petitioners came to know about the cancellation of the allotment of the shares in the beginning of March, 1966. We are of the view that limitation would begin to run against the two petitioners from the date of their attaining majority, which in the case of Navinchandra, petitioner in petition No. 9 of 1966, would be on 23rd february, 1964, when he attained majority, and in the case of Prafulkumar, petitioner in petition No. 10 of 1966, limitation would begin to run against him from the date of his attaining majority which was on 20th January, 1961.(9) SHRI Madon contends that so far at least as petition No. 10 of 1966 is concerned, it would be time barred since Prafulkumar attained majority on 20th January, 1961, and he submits that the proper article to apply to petition would be article 181 of the Limitation Act of 1908 under which the period of limitation would be 3 years from the day when the right to apply accrued. In Sha Mulchand and Co. v. Jawahar Mills Ltd. 1 (1) [1953] S. C. R. 351 ; 23 Comp. Cas. 1. the Supreme Court appears to have taken the view that article 181 of the Limitation Act of 1908 has to be construed as referring to applications under the Code of Civil Procedure in view of a long series of judicial decisions of different High Courts in India. The Supreme Court, however, did not pursue the matter further on he question of applicability of article 181 because it held that even if article 181 was to apply to the application for rectification in that case, it was within time. The Supreme Court, however, observed that if article 181 did not apply then the only article that could apply "by analogy" would be article 120, under which also the application in that case was within time. Now Shri Ramanathan contends that article 181 would not apply in view of the observations of the Supreme Court, and he proper article to apply would be article 120, and he relies in support of his arguments on the decision of the Madras High Court in the same case, Jawahar Mills Ltd. v. Sha Mulchand and Co. 1 (1) [1949] 19 Comp. Cas. 138. where rectification was sought on the ground that the forfeiture of shares by the company was illegal. Shri Ramanathan also relies on the observations of the Supreme Court in appeal from that decision, referred to earlier, that article 120 would apply to cases of rectifications "by analogy", if article 181 is not applicable. Shri Madon has suggested that the decision of the Madras High Court and of he Supreme Court might have been perhaps different if attention of the word "suit" under section 2 (10) of the Limitation Act of 1908, which provides that "suit does not include an appeal or an application. " It is difficult to say whether the attention of the Madras High Court was drawn to this definition of "suit" under the Limitation Act because it has stated that article 120 would apply "by analogy".

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds](6) WE also observed than that no more issues were sought by the parties. Thereafter we adjourned the hearing of the petitions to 26th November, 1966, at New Delhi on these two issues. On 2nd November, 1966, we changed the place of hearing and directed that the petitions should be fixed for final hearing on 26th November, 1966, at Bombay, at he Tribunal was holding its sittings in Bombay from 24th November onwards. On that day, after we had heard Shri Ramanathan, learned advocate appearing on behalf of the petitioners, and Shri Madon, learned advocate appearing on behalf of the contesting respondents, it was contended by Shri Madon that perhaps the question of title would have also to be considered since it was the contention of his client that 600 shares were allotted to the petitioners father, respondent No. 2, on 1st April, 1960, when the allotment of shares in favour of the petitioners was cancelled and that these 600 shares were given by the deceased, Gordhanbhai, to respondent No. 2 in lieu of the shares previously allotted in favour of his sons. He also relied on the fact that the relevant share certificates in respect of 600 shares involved in this petition were retained, as admitted by the petitioners themselves, by he late Gordhanbhai in his own custody till the time of his death. Undoubtedly, in petitions under section 155 of the Act it would be open to the Tribunal to to decide any question relating to the tittle of any person who is a party to the application. But the difficulty in the way of Shri Madon is that the respondents have not challenged the title of the petitioners to these shares except on the basis that the original allotments in their favour were illegal on the ground of minority. Besides, an issue on his was sought to be raised when we passed our Order on 20th September, 1966, framing the two issues already mentioned above. Shri Madon, however, states that he would have no objection if this question of title was not gone into in this petition and if he was permitted to get the question of title decided by a separate suit if so advised. Shri Ramanathan raised no objection to this suggestion of Shri Madon, though he strongly relied on section 84 of the Act in support of his argument that the certificates of shares produced by he company would be prima facie evidence of the title of his clients in respect of these 600 shares before the allotments were cancelled by the company, and the name of Gordhanbhai entered on the shares. Since both the parties are not anxious to agitate the question of title, we have no gone into the same in theseMadon, in our view, is right in his contention that the original allotment made in favour of the petitioners was invalid because the allottees were minors and that the company was entitled to repudiate the allotment. But even assuming that was so, we do not think the company was entitled to proceed to delete the names of the petitioners from its register of members, and rectify the register in respect of these 600 shares in favour of the deceased, Gordhanbhai, without approaching the proper court in that behalf, especially as the interest of the minors was involved. In our view the company was not, in law, justified in deleting the names of thee petitioners in the way it did and the omission of their names from the register of members is consequently without sufficient cause. We, therefore, decide thee first issue in favour of the petitioners in both these petitions.are not, however, prepared to impute notice about the action of the company to the minors on the basis of these facts. Nor are we prepared to accept the allegation made in the petition that the petitioners came to know about the cancellation of the allotment of the shares in the beginning of March, 1966. We are of the view that limitation would begin to run against the two petitioners from the date of their attaining majority, which in the case of Navinchandra, petitioner in petition No. 9 of 1966, would be on 23rd february, 1964, when he attained majority, and in the case of Prafulkumar, petitioner in petition No. 10 of 1966, limitation would begin to run against him from the date of his attaining majority which was on 20th January,Sha Mulchand and Co. v. Jawahar Mills Ltd. 1 (1) [1953] S. C. R. 351 ; 23 Comp. Cas. 1. the Supreme Court appears to have taken the view that article 181 of the Limitation Act of 1908 has to be construed as referring to applications under the Code of Civil Procedure in view of a long series of judicial decisions of different High Courts in India. The Supreme Court, however, did not pursue the matter further on he question of applicability of article 181 because it held that even if article 181 was to apply to the application for rectification in that case, it was within time. The Supreme Court, however, observed that if article 181 did not apply then the only article that could apply "by analogy" would be article 120, under which also the application in that case was within time. Now Shri Ramanathan contends that article 181 would not apply in view of the observations of the Supreme Court, and he proper article to apply would be article 120, and he relies in support of his arguments on the decision of the Madras High Court in the same case, Jawahar Mills Ltd. v. Sha Mulchand and Co. 1 (1) [1949] 19 Comp. Cas. 138. where rectification was sought on the ground that the forfeiture of shares by the company was illegal. Shri Ramanathan also relies on the observations of the Supreme Court in appeal from that decision, referred to earlier, that article 120 would apply to cases of rectifications "by analogy", if article 181 is not applicable. Shri Madon has suggested that the decision of the Madras High Court and of he Supreme Court might have been perhaps different if attention of the word "suit" under section 2 (10) of the Limitation Act of 1908, which provides that "suit does not include an appeal or an application. " It is difficult to say whether the attention of the Madras High Court was drawn to this definition of "suit" under the Limitation Act because it has stated that article 120 would apply "by analogy".