TMI Blog1932 (5) TMI 8X X X X Extracts X X X X X X X X Extracts X X X X ..... was subject to all the liabilities of membership according to the rules and regulations of the Association. Being successor to his father he was not, on his enrolment as a member, required to pay any entrance fee, but in every year until he was declared a defaulter, as presently to be mentioned, he paid to the Association a subscription of ₹ 5 and in the receipt given him on the occasion of each payment he is described as a registered broker in the Sir Dinshaw Petit Native Share Brokers' Hall. He remained a member of the Association until 23rd June 1925. On that day, following a notification to the Association of the 13th June that he was unable to meet his liabilities, he was, under the rules, declared a defaulter and his card or right of membership was forfeited by the Directors. On 2nd July 1925 he was adjudicated an insolvent under the Presidency Towns Insolvent Act, 1909. Thereupon by virtue of Sections 17 and 52 of the Act all his property wherever situated which might belong to or be vested in him at the commencement of the insolvency (with certain exceptions not presently material) vested in the Official Assignee and became divisible among his creditors. Virji ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bers, should thenceforth constitute and be a society to be called the Native Share and Stock Brokers' Association. The first stated purpose of the association was: to support and protect the character, status and interests of brokers dealing in shares, stock and other like securities in Bombay, to promote honourable practice, to suppress malpractices, to settle disputes amongst brokers, to decide all questions of usage or courtesy in conducting brokerage business. 6. The second purpose was to erect and maintain at Bombay a suitable building for use by the Association as a Brokers' Hall to be called Sir Dinshaw Petit Native Brokers' Exchange Hall. A third purpose was to purchase or otherwise acquire any real property and any rights or privileges necessary or convenient for the purposes of the Association, elaborate provision being made for vesting the property of the Association in trustees. 7. None but natives of India were to be admitted as members of the Association (Clause 2): any person who was a native of India might with the assent of the Managing Committee . become a member (Clause 3), but any application for membership might be rejected by the Managin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... forfeited. Disposal of the Deceased Broker's Card 13. On the death of a certified broker his card shall pass to his son, and no fee will have to be paid on that account. 15. If the deceased broker has no issue, the card shall be sold to the person to whom the widow or the executor of the deceased directs (it to be sold).... 16. Director.--Only after obtaining the assent of the Board shall the card be transferred as above to a particular individual, and the director shall disallow any such application without giving any reason. 17. If there is no such relative of the deceased broker, who can carry on his business, his card shall be sold according to the practice of the Association and the sale proceeds thereof shall be paid to his widow or to anyone else (who is) his lawful heir. Disposal of an Insolvent Broker's Card 18. If any of the brokers goes away from the market without paying the moneys claimable by another certified broker or is unable to pay (the same), his card shall be sold and the sale proceeds thereof shall be distributed amongst his creditors. 19. If any deceased broker is indebted to any of the certified brokers the Directors shall se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to be a member for a period of not less than 25 years, desires to tender his resignation and intends to have his nominee enrolled as a member in his stead and applies in writing to the Board accordingly, the Board can, if it deems proper under the absolute discretion vested in it, enrol the aforesaid nominee (as a member) in the place of the said member without charging any entrance fees.... The Board shall not enrol any such nominee as a member unless and until in connexion with the said matter, the said nominee is fit in all respects to become a member according to the rules and regulations governing the exchange at that time, and the said proposed nominee has been selected by the Board itself. From what has been hereinabove stated it is not to be thought that (it) confers upon any member the right to transfer his card to the name of any other person or that (it) gives any transferable interest to any member in his card. 9. Their Lordships have made this full survey of the salient provisions of the constitution dead and rules of the Association in order that its real nature and the status of its members might thereby be disclosed. So much is essential if the claims of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... present to put forward a claim analogous to that made by the appellant in these proceedings. 13. That claim, now that it is put forward, is rested on two quite separate grounds. First of all the appellant bases it, as their Lordships understand, on the rules of the Association, according to what he submits is their true construction. That ground failing, he relies, secondly, despite all rules, upon his paramount rights as assignee in insolvency. 14. Upon the first of these grounds their Lordships are unable to see how under the rule the appellant's claim can be maintained. He does not challenge the regularity of the forfeiture of the insolvent's right of membership nor does he dispute that under the rules the declaration of default was fully justified. That being so, it cannot in their Lordships' judgment be questioned that thereupon the insolvent's interest in the Association, whether in respect of his card or otherwise, became, under the rules, extinguished. So soon as membership ceases, whether on resignation, death, as a result of misconduct, or for nonpayment of his subscription, all the interest of the member in the property of the Association is under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t to have been dismissed. 16. Nor does it appear to their Lordships that his second or alternative ground of claim has any higher warrant. That claim amounts to this that if the effect of the rules be that the proceeds of sale of the insolvent's card do not enure for the benefit of the general body of his creditors the rules are contrary to the law of insolvency and, separately, to the provisions of Section 12, T. P. Act, 1882, which it will be recalled, is as follows: Where property is transferred subject to a condition or limitation making any interest therein, reserved or given to or for the benefit of any person, to cease on his becoming insolvent or endeavoring to transfer or dispose of the same, such condition or limitation is void. 17. The appellant sought to justify his position here by quoting Borland's Trustee v. Steel Brothers Co. Ltd. [1901] 1 Ch. 279, in reference to a company, and Whitmore v. Mason [1862] 2 J. H. 204 in reference to a partnership, and by insisting upon the restricted permissible operation of forfeiture provisions in such cases. It being agreed however on all hands that the rules of this Association are entirely innocent of any des ..... X X X X Extracts X X X X X X X X Extracts X X X X
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