TMI Blog1951 (2) TMI 18X X X X Extracts X X X X X X X X Extracts X X X X ..... urchased 7/8th share of shares Nos. 4818 to 5017 of the defendant company on 28-3-32. Thereafter the plaintiffs obtained a share transfer deed executed by the Court in terms of Order 21, Rule 80, and wrote to the defendant no. 1 in 1940 asking for information as to what should be done to get their names mutated. As there was no reply to that letter the plaintiffs in 1941 complained to the Registrar Joint Stock Company who after enquiries informed the plaintiffs that the shares stood in the name of Rajani Kanta Mukherjee (deceased) who had obtained mutation on the basis of his auction purchase and private purchase of the said shares. In the plaint the plaintiffs alleged that in the execution case started, by them the judgment-debtors as well as the Secretary of the defendant no. 1 company were duly served with the prohibitory order under the C. P. Code. In spite of that the judgment-debtors sold their shares to the said Rajani Kanta Mukherjee by private treaty and Rajani Babu also auction-purchased the interest of Kari Md. Ismail on or about the 25th July, 1936. As the said Rajani Kanta Mukherjee was an influential Director of the defendant no. 1, company, the company fraudulently, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no. 29/32 but no notice was served upon his heirs under Order21, Rule 22 C.P. Code, and therefore the sale was void as it took place on 28-6-32, before the insertion of sub-rule (3) by the Calcutta High Court in 1933. In the second place he held that the suit was barred by limitation under Article 120 of the Indian Limitation Act, because according to him the right to sue accrued to the plaintiffs on the 24th April 1938, which is date on which the defendant no. 1 mutated the name of Rajani Kanta Mookerjee and the plaintiffs instituted the present suit on the 23rd October, 1944, i.e., more than six years from the accrual of the right to sue. 5. Mr. Banerjee appearing in support of the appeal has challenged the decision on both the points. 6. In the first place he has contended that the omission to serve the notice under Order 21, Rule 22 ma,kes the sale voidable and not void and even if it is void, it is void to the extent of the share of Isfaque only and the learned Subordinate Judge was wrong in holding that the entire sale was a nullity. In the second place he has argued that the right to sue accrued to the plaintiffs only when there was a clear and unequivocal threat to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er the filing of the execution case no notice under Order 21, Rule 22 would be necessary. 8. The second branch of Mr. Banerjee's argument on the first point is undoubtedly correct. If the provisions of Order 21, Rule 22 are attracted to the facts of this case they make the sale void only to the extent of the share of Isfaque and the learned Subordinate Judge was clearly wrong in holding that the entire sale was a nullity on account of the omission to serve the notices upon the heirs of Isfaque. This proposition is supported by the decision in 'Manindra Chandra v. Rahatannessa Bibi', 35 Cal W N 220 and the learned Advocates appear for the respondents do not challenge it. 9. Mr Sen appearing for Respondent no. 3 has raised the point that under Section 28 of the Indian Companies Act read with Article 25 of the Articles of Association the plaintiffs are not entitled to mutation of their names. Section 28 of the Indian Companies Act lays down that the shares are transferable in manner provided by the Articles of the Company. Article 25 of the Articles of Association requires that a transferee can obtain mutation of his name only on the basis of a letter signed jointly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9;, 45 Mad 537, for the proposition that where the Article of Association require that both the transferor and transferee must join in making an application to the company for registration of the name of the transferee, that condition must be complied with even in the case of auction sales held by the Court. There is nothing in the Articles of Association of the first defendant forbidding a sale by Court of the shares held by a member and in the absence of any such prohibition we are inclined to think that a sale by Court of the shares held by a member has the effect of transferring the shares to the purchase . We are fortified in this view by the decision of the Madras High Court in the case of 'Mohideen v. Tinnevelly Mills Co.' AIR1928Mad571 where both the decisions relied upon by Mr. Sen were considered. Mr. Satya Priya Ghose appealing for the first defendant relied upon the provisions of Section 34 (3) of the Indian Companies Act which provides that it shall not be lawful for the company to register a transfer of shares unless the instrument of transfer duly stamped and executed by the transferor and the transferee has been delivered to the company. The language of this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the present case in the absence of anything to show that the plaintiffs were aware of the resolution. The defendants have filed a certificate of posting Ex. V, anted 5-11-40 in support of their case that the fact of the mutation of Rajani Babu's name was communicated to the plaintiffs on that date. The copy of the letter which was sent under the certificate of posting is not, however, produced. Even assuming that the resolution was communicated on that date the suit is within six years. But the .otter by which the first defendant communicated the fact of the mutation of Rajani Babu's name to the plaintiffs is Ex. 8 (a), dated 14-11-41 by which the first defendant definitely refused to register the plaintiff's name, and this letter, in our opinion, constituted a clear unequivocal threat to the plaintiff's right. We accordingly hold that the period of limitation began to run from 14-11-41 and as the suit was instituted within six years from that date it is not barred by limitation. 13. Mr. Abinash Chandra Ghose appearing for respondent No. 2 raised the point that plaintiffs did not take possession under Order 21, Rule 79 within three years from the date of sale and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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