JUDGMENT
1. This judgment will dispose of Letters Patent Appeals Nos. 185, 186 and 187 of 1964, against the judgment of S.B. Capoor J. dated the 26th of February, 1964, passed in Civil Original Nos. 62, 63 and 64 of 1960.
2. Walaiti Lal, petitioner in C.O. Nos. 62, 63 and 64 of 1960, who is now respondent in the present appeals, had purchased on various occasions shares in the appellant-company and his grievance in each of these petitions is that the company is unlawfully refusing to enter his name on its register as holder of the shares. C.O. No. 62 of 1960 relates to 500 shares registered
in the name of Dr. Ahmad Ali, one of the respondents in the petition, and 50 shares registered in the name of Chaudhry Sharaf-ud-din, another respondent. These shares are alleged to have been ‘purchased in the year 1955, and it was also alleged that the Reserve Bank of India through its exchange control department granted permission for the transfer of these shares in the name of the respondent, Walaiti Lal. The said transfer deeds are alleged to have been duly stamped and were sent to the company by the respondent.
3. In C.O. No. 63 of 1960, Walaiti Lal, respondent, is alleged to have pur-chased on 9th of May, 1957, shares from K.B. Malik and Co., Stock and Share Brokers, New Delhi, 63 shares standing in the name of Ram Singh, respondent in that case, and, accordingly, a prayer for the transfer of the shares in the respondent’s name was made to the company.
4. In C.O. No. 64 of 1960 it was alleged that 2,085 fully paid up shares and 1,000 partly paid up shares in the capital of the company were purchased about the middle of 1955 by the respondent from Mr. H.C. Bevan Petman, respondent No. 2 in the petition, and E.D. Dignasse, respondent No. 3, trustees for the estate of late Mr. Bevan Petman. A request was made for transferring the said shares in the name of the respondent.
5. Further averment on behalf of the respondent is that in each of these three cases, the company on various frivolous pretexts is refusing to register the shares in the name of the respondent. The company having refused to give effect to the transfer of the shares in three cases mentioned above, the respondent, Walaiti Lal, thereupon filed an appeal under Section 111 of the Companies Act, 1956 (hereinafter called ” the Act “), to the” Central Government against the non-registration of the transfer of the shares within the prescribed time. The Central Government accepted the appeal of the respondent and directed the appellant-company to register the transfer of shares in the name of the respondent. The Central Government’s order in C.O. No. 62 of 1960 was made on March 7, 1957, in Appeal No. 39 of 1956. The appellant then filed a writ petition (Civil Writ No. 333 of 1957) under Articles 226 and 227 of the Constitution of India. This petition was dismissed on merits by Bishan Narain J., on 22nd of May, 1957. Letters Patent Appeal against this order was dismissed in limine. The company moved for leave to appeal to the Supreme Court which was also not granted by a Division Bench of this court. Thereafter the respondent, vide letter dated the 1st of August, 1957, again submitted the documents relating to these shares but the company took no action on the respondent’s letter. On the other hand, it filed a suit in the civil court at Delhi, claiming a declaration that the respondent was not entitled to compel the company to register the transfer of these shares in his name and that the order passed by the Central Government in appeal was illegal and without jurisdiction.
6. The appeals filed in the other two cases, that is, C.O. Nos. 63 and 64 of 1960, under Section 111 of the Act, were also allowed by the Central Government and despite the direction having been given by the Central Government, the appellate authority, that the respondent’s name be registered by the company as the holders of the shares in its register of members, the company did not comply with the orders but filed suits in the court of the Subordinate Judge, 1st Class, at Delhi. It appears that the subordinate judge dismissed the suit pertaining to the shares which are the subject matter of C.O. No. 63 of 1960 on 29th July, 1960, and R.F.A. No. 136-D of 1960 has been filed against the said judgment by the appellant-company. We are told by the learned counsel for the appellant that this appeal is still pending.
7. Apart from the relief regarding the rectification of the register of members of the company, the petitioner also prayed for the payment of dividends accrued on the shares as also for damages amounting to Rs. 5,500 in C.O. No. 62 of 1960, Rs. 630 in C.O. No. 63 of 1960 and Rs. 30,850 in C.O. No. 64 of 1960. The damages were claimed at the rate of Rs. 10 per share in each case.
8. These petitions were resisted by the company on a number of grounds and the issues in C.O. Nos. 62 and 64 of 1960 are identical which are reproduced below :
(a) Is the petition within time ?
(b) Is it not a fit case for summary trial under Section 155 of the Companies Act ?
(c) Is the petition not maintainable or liable to be stayed in view of the suit mentioned in preliminary objection No. 3 (in C.O. No. 62) and No. 2 (in C.O. No. 64) ?
(d) Is the respondent barred from re-agitating his pleas in defence in this petition in view of the decision of the Central Government and the decision of this court in the writ petition ?
(e) Has the name of the petitioner been omitted from the register of members of the respondent-company without sufficient cause ?
(f) Is the petitioner entitled to damages ? If so, to how much?
(g) Relief.
9. In C.O. No. 63 of 1960 also the issues were the same with the exception that there is no issue on the score of limitation.
10. A prayer was made before Tek Chand J. that issues (b) and (c) in C.O. No. 62 and the corresponding issues in the other two petitions may be disposed of first as their decision depended on documents alone. This prayer was acceded to and by his order dated the 24th August, 1961, the learned judge decided these issues and his findings on each of these issues were (b) that it is a fit case for summary trial under Section 155 of the Act, and (c)
that the petition under Section 155 of the Act is maintainable despite the suit mentioned in the preliminary objections. Letters Patent Appeals filed by the company against this order were dismissed on 4th December, 1963 (L.P.A. Nos. 257 to 259 of 1961). The remaining issues have been decided by the learned single judge by the order now under appeal.
11. A preliminary objection was raised on behalf of the company who is now appellant before us as to the maintainability of these petitions under Section 155 of the Act. A plea was taken that the remedies provided under Sections lll and 155 of the Act are alternative remedies and Walaiti Lal, respondent, having availed the remedy available under Section 111 of the Act, was not entitled to invoke the jurisdiction of this court under Section 155 of the Act. This contention of the learned counsel was repelled by the learned single judge and it was found by the learned single judge that this objection is without any force.
12. The question of limitation arising in C.O, No. 62 of 1960 was not argued before the learned single judge and the learned judge found that the petition was not barred by limitation. Under issue (b) in C.O. No. 62, issue (c) in C.O. No. 63 and issue (d) in C.O. No. 64, it was found by the learned single judge that the order of the Central Government under. Section 111 of the Act was appealable to the Supreme Court under Article 136 of the Constitution, and no appeal having been preferred against that order of the Central Government in each of the cases the order had become final. Thus it was held that under Section 155 of the Act this court was not sitting in appeal or revision against the order of the Central Government. Issue (e) in C.O. Nos. 62 and 64 and issue (d) in C.O. No. 63 were decided in favour of the petitioner-respondent.
13. As regards dividends under issue (f) in C. O. Nos. 62 and 64 and issue (e) in C.O. No. 63, it was held by the learned single judge that in C.O. No. 63 of 1960, the amount pf dividend due from January 1, 1956, up to 1960-61 is Rs. 229’95 and it was found that the same amount should be paid by the appellant company to the respondent-shareholder. As regards C. 0. No. 64 of 1960, it Was found that a sum of Rs. 31,099’75 is due from the years 1950 up to and including 1960-61, which has to be paid by the company to Walaiti Lal, shareholder.
14. As regards C. O. ‘No. 62 of I960, so far as the dividends which accrued subsequent to the 6th of April, 1956, that is, the date of transfer deed in favour of Walaiti Lal, it was ordered that the same dividends should be paid to the petitioner which amounted to Rs. 1,975 and as regards the dividends which accrued prior to April 1, 1956, it was found that it would not be proper to decide in that petition as to whether any dividend was due to Walaiti Lal. The claim regarding the damages in all the three C. Os. was not decreed by the learned single judge.
15. We have heard the learned counsel for the appellant, Mr. Partab Singh, and Mr. K. L. Kapur, the learned counsel for the respondent. The learned counsel for the appellant has raised the following contentions :
(1) The first and the foremost contention of the learned counsel for the appellant is that the remedies provided under Sections 111 and 155 of the Companies Act are alternative remedies and Walaiti Lal, respondent, having availed the remedy of filing appeals under Section 111 of the Act to the Central Government, the petitions filed in this court under Section 155 of the Act are not maintainable.
(2) The next contention is that the shares and the transfer deeds in question are not properly stamped and were not properly stamped at the initial stage. That being so, according to the provisions of law, the same cannot be allowed to be stamped now as to make up the deficiency ; therefore, his contention is that because of that defect the respondent’s claim for transfer of the shares in his name has to be rejected.
(3) The net contention of the learned counsel is that in C.O. No. 64 of 1960, the learned single judge has erred in granting a sum of Rs. 21,099.75 as dividend to the respondent from the year 1950 up to and including 1960-61, He contended that the sale of shares and transfer in this case had taken place on March 21, 1955, and in any case the dividend which accrued to the scares before this date could not be ordered to be paid to the respondent, Walaiti Lal.
(4) The next contention is that in the petition filed under Section 155 of the Act no claim was made by the respondent for the dividends being paid to him and further that there is no power with the court to order the grant of dividends under Section 155 of the Act. Except the above contentions, no other averment was made by the learned counsel for the appellant.
16. We shall now deal with the contentions of the learned counsel for the appellant in seriatim.
17. As regards the first contention of the learned counsel for the appellant, we are of the opinion that there is no force in it and the same has to be rejected. The finding of the learned trial judge to the effect that there is no merit in this petition is correct. The learned counsel for the appellant has relied on Harinagar Sugar Mills Ltd. v. Shyam Sunder Jhunjhunwala, [1961] 31 Comp. Cas. 387; [1961] 2 S.C.R. 384; A.T.R. 1961 S.C. 1669.
and Arjan Singh Bir Singh v. Panipat Woollen & General Mitts Co. Ltd., [1963] 33 Corap. Cas. 534; A.I.R. 1963 Punj. 341.
Both these authorities have been considered by the learned single judge in his order and he rightly came to the conclusion that these authorities do not substantiate the contention of the learned counsel. In Harinagar Sugar Mill’s case the question before the Supreme Court was whether the Central
Government hearing an appeal under Section 111(3) of the Act was acting in the exercise of judicial powers or the administrative powers. It was held that the power under Section 111(3) of the Act was a judicial power. It was further held in this case that the remedies provided under sections 111 and 155 of the Act were alternative remedies and that an appeal lies to the Supreme Court under article 136 of the Constitution against an order of the Central Government passed under Section 111(3) of the Act. In Arjan Singh’s case, [1966] 33 Comp. Cas. 534; A.I.R. 1963 Punj. 341.
the principle laid down by the learned judge was that the jurisdiction of this court under Section 155 of the Act is not to sit as appellate or revisional authority against the order passed by the Central Government under Section 111 of the Act. There is no dispute with this proposition of law. In the present case, the only prayer made in the petitions under Section 155 of the Act is that the name of Walaiti Lal, respondent in the appeal, should be got registered in the register of shareholders. To the same effect was the decision of the Central Government under Section 111 of the Act. Thus the entertainment of the present petition under Section 155 of the Act is in no way entertaining the appeal or revision against the order of the Central Government. But on the other hand if we accept the contentions raised by the learned counsel for the appellant that the order of the Central Government is illegal and, therefore, should not be acted upon, we shall be sitting in appeal or revision against the order of the Central Government which is not open to us in the present proceedings. Thus it is obvious that there is no escape from the fact that the finding given by the learned single judge on question No. 1 is perfectly in order and the same cannot be set aside.
18. About the second contention, it is suffice to say that this point was never raised before the learned single judge. This is a point which requires investigation of facts. It has to be ascertained before any finding can be given as to what amount stamp was affixed on the shares and on the transfer deeds and as to whether the same was sufficient and in conformity with law and, if deficient, to what extent. Thus this question cannot be gone into before certain facts are found by the court. This objection having not been raised before the learned single judge and being a mixed question of fact and law cannot be permitted to be raised in Letters Patent Appeal. Therefore, this objection is without any merit and is liable to be rejected.
19. As regards objection No. 3, the learned counsel for the respondent could not satisfy us as to how Walaiti Lal is entitled to get the dividend from 1950. Admittedly, the shares in question in this petition were purchased by Shri Walaiti Lal on March 21, 1955. The learned counsel for the appellant has pointed out to us a letter, exhibit R.W. 420, dated January 4, 1958. This letter was addressed on behalf of Mr. H. C. Bevan Petman to
the appellant to the effect that the dividend in question should not be paid to the transferee and all earlier communications in which the dividend was asked to be paid to the transferee should be taken to be superseded. We are of the opinion that the transferee is entitled to the dividend only from the date of purchase of the shares, that is, March 21, 1955, and previous to that he is not entitled to any dividend on the shares which he purchased on this date. Thus we modify the judgment of the learned single judge to the extent that in C.O. No. 64 of 1960, the amount of dividend on the shares purchased by the respondent in this case has to be paid to the respondent, Walaiti Lal, from March 21, 1955, upto 1961, including 1960-61, and not previous to that. To this extent the appeal must succeed.
20. As regards objection No. 4, we have gone through the petitions filed under Section 155 of the Act and we find that in paragraph 21 of the petitions, a claim is clearly made for the dividend to be paid on the shares in dispute in all the three cases. Thus it is factually incorrect to say that no claim was made in the petitions for the dividend by the respondent, Walaiti Lal. Regarding the question that this court has no power under Section 155 of the Companies Act to grant dividend, it is to be seen that the same is also without any force. When a finding is being recorded that Shri Walaiti Lal is entitled to get his shares transferred from the date on which he purchased the shares, it is incidental and consequential that the question of payment of dividend from that date onwards has to be decided by the court. Section 155 of the Act even provides for the payment of damages in a suitable case. We fail to understand how this court has no jurisdiction to grant the dividend when it is found that Shri Walaiti Lal was entitled to get the shares transferred and get his name registered from the date of purchase of shares. This contention is without any merit and the same is liable to be rejected.
21. No other contention is raised by the learned counsel for the appellant. The net result is that, except to the extent indicated above regarding C.O. No. 64 of 1960, the appeals fail and are dismissed. However, keeping in view the circumstances of the cases, there will be no order as to costs.