TMI Blog1965 (8) TMI 55X X X X Extracts X X X X X X X X Extracts X X X X ..... uct of the applicant disentitles him to equitable relief. The maxim may be invoked where the conduct complained of is unfair and unjust in relation to the subject-matter of the litigation and the equity sued for. The unwarranted proceedings under sections 402 and 237 of the Companies Act, 1956, and other vexatious proceedings started by the respondents have no relation to the invalidity of the forfeiture and the relief of rectification and are not valid grounds for refusing relief. Appeal dismissed. - 202 AND 203 OF 1965 - - - Dated:- 30-8-1965 - K. SUBBA RAO, J.R. MUDHOLKAR AND R. S. BACHAWAT, JJ. K. K. Venugopal and R. Gopalakrishnan for the Appellant . A.V. Viswanatha Sastri, P. Ram Reddy and A.V.V. Nair for t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n or before January 19, 1957. The call notices were duly served on the contesting respondents. As the call monies remained unpaid, the company issued the following notice dated January 20, 1957, to the respondents under article 29: "Sir, As the call amount of the balance of Rs. 25 for every share held by you remains unpaid in respect of the notice dated 3rd January, 1957, issued in , pursuance of the resolution of the Board, I hereby issue this notice calling upon you to pay the called amount at the registered office of the company, on or before Wednesday the 30th January, 1957 together with interest at six per cent, and any expenses that might have accrued by reason such non-payment. Take further notice that in the event of non-pay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ayment, see regulation 14 of Table A in the First Schedule to the Indian Companies Act, 1913. regulation 16 of Table A in the First Schedule to the Companies Act, 1956, and Palmer's Company Precedents, 17th edn., Part I, page 437 and the regulations relating to calls are followed by regulations relating to forfeiture like articles 29 and 30 of the appellant-company. In the light of article 29 read with similar regulations relating to calls, we would have no difficulty in holding that the notice dated January 20, 1957, required payment of interest on the call money from the date appointed for the payment thereof, that is to say, January 19, 1957, up to the time of the actual payment. Unfortunately, all the regulations of the company relati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y person after having been entered in the register is, without sufficient cause, omitted therefrom. There is no sufficient cause for the omission of the name of the shareholder from the register, where the omission is due to an invalid forfeiture of his shares, and on finding that the forfeiture is invalid, the court has ample jurisdiction under section 155 to order rectification of the register. The High Court said that the shareholder may approach the court under section 155 if he has sufficient cause. This mode of expression was rightly criticised by counsel for the appellant. The issue under section 155(1)( a )( ii ) is not whether the shareholder has sufficient cause but whether his name has been omitted from the register without suff ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the directors on January 21, 1957, after the notice of the intended forfeiture dated January 20, 1957, was issued. On January 30, 1957, the court passed a modified interim order restraining the forfeiture of the shares, and directed M.A. Jabbar to pay the call money into court within one week. The call money was not paid into court, and on February 8, 1957, the court vacated the stay order. Application No. 119of 1957 was eventually dismissed on April 10, 1957. Counsel for the appellant contended that (1) by reason of the aforesaid proceedings the respondents waived and abandoned their right to challenge the forfeiture ; (2) the order dated January 30, 1957, substituted a fresh notice of intended forfeiture under article 29 in lieu of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o cripple its affairs, and the appellate court recorded the finding that the respondents were acting mala fide and prejudicially to the interests of the appellant and their conduct in taking various proceedings against the appellant is reprehensible. Counsel then relied upon the well-known maxim of equity that "he who comes into equity must come with clean hands", and contended that the courts below should have dismissed the application as the respondents did not come with clean hands. This contention must be rejected for several reasons. The respondents are not seeking equitable relief against forfeiture. They are asserting their legal right to the shares on the ground that the forfeiture is invalid and they continue to be the legal ow ..... X X X X Extracts X X X X X X X X Extracts X X X X
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