Share sale contract and specific performance: post-contract dividends pass to purchaser, with interest payable on unpaid price.

Authority to conclude the share sale was upheld because the agent had power to bind the vendors and the contemporaneous correspondence showed a concluded bargain. The agreement was not void for illegality: a contract to sell shares was not itself an acquisition of securities under the Defence of India Rules, which targeted completion of acquisition rather than the making of the contract. Specific performance was appropriate because damages were inadequate and the purchaser's readiness and willingness were sufficiently shown. Dividends declared after the contract passed to the purchaser, but he had to pay interest on the unpaid price from the completion date. Damages were also recoverable for shares transferred to an absent third party.

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Issues: (i) whether the agent was authorised to enter into the contract and whether the contract was in fact concluded; (ii) whether the agreement was void for illegality under the Defence of India Rules; (iii) whether the purchaser was entitled to specific performance, including whether he was ready and willing to perform his obligations; (iv) whether the purchaser was entitled to dividends declared and paid after the contract and to interest on the purchase price; and (v) whether damages were recoverable in respect of the shares transferred to a third party not before the Court.

Issue (i): whether the agent was authorised to enter into the contract and whether the contract was in fact concluded.

Analysis: The evidence established that the agent had authority from the vendors to negotiate and bind them. The letters exchanged contemporaneously, together with the cable and surrounding circumstances, supported the existence of a concluded bargain. The finding of fraudulent collusion was not sustainable on the evidence, and the attempt to defeat the documentary proof of the bargain by conjecture was rejected. The challenge based on the discrepancy between the parties' descriptions did not displace the substance of the agreement.

Conclusion: The contract was duly authorised and was in fact made, in favour of the appellant-plaintiff.

Issue (ii): whether the agreement was void for illegality under the Defence of India Rules.

Analysis: The prohibition against acquiring securities from a non-resident was construed as directed to the completion of the acquisition, not merely the making of the contract to purchase. A contract for sale did not, by itself, amount to an acquisition of securities within the rule. As no purchase was shown to have been entered into with a view to contravene the rules, the ancillary preparatory prohibition also did not apply.

Conclusion: The agreement was not void for illegality, in favour of the appellant-plaintiff.

Issue (iii): whether the purchaser was entitled to specific performance, including whether he was ready and willing to perform his obligations.

Analysis: Specific performance was appropriate because damages would not afford an adequate remedy in the circumstances of the shares. The objection based on want of readiness and willingness failed, as the purchaser was not bound to prove that the money had been actually produced or that a concluded financing scheme had been arranged. The conduct of the parties after repudiation and the surrounding evidence were sufficient to establish capacity and willingness to perform.

Conclusion: Specific performance was properly granted, and the purchaser was ready and willing to perform, in favour of the appellant-plaintiff.

Issue (iv): whether the purchaser was entitled to dividends declared and paid after the contract and to interest on the purchase price.

Analysis: As between vendor and purchaser, dividends declared after the contract passed to the purchaser unless otherwise agreed. The entitlement was not confined to dividends relating to periods before the contract; the relevant factor was the date of declaration. Since the purchaser obtained the benefit of the dividends while the price remained unpaid, equity required him to bear interest on the purchase money from the due date for completion. The transferees with notice were also bound to account in the same manner.

Conclusion: The purchaser was entitled to the dividends and was liable to pay interest on the price, in favour of the appellant-plaintiff in part and against the appellant-plaintiff in part.

Issue (v): whether damages were recoverable in respect of the shares transferred to a third party not before the Court.

Analysis: Specific performance could not be made effective against the shares already transferred away from the absent transferees, but the original vendors and the transferee with notice remained answerable in damages for the loss of those shares. The measure of damages was agreed between the parties.

Conclusion: Damages were recoverable in respect of those shares, in favour of the appellant-plaintiff.

Final Conclusion: The appeal by the plaintiff succeeded substantially, while the other appeals failed. The decree was modified to grant specific performance, dividends, interest, and limited damages, and the remaining appeals were dismissed.

Ratio Decidendi: A contract for sale of shares is not itself an acquisition of securities under a prohibition directed against acquisition, and in a suit for specific performance the purchaser, once entitled to the shares, is also entitled as between vendor and purchaser to dividends declared after the contract and must account for interest on the unpaid price from the due date for completion.

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