1942 (2) TMI 18 - HC - Indian Laws

Liability of Father in Minor's Shares Appeal: Court Rules in Favor of Minor

The Civil Miscellaneous Appeal involved an application under Section 184 of the Indian Companies Act to settle the list of contributories. The core issue ... - Issues:1. Application under Section 184 of the Indian Companies Act to settle the list of contributories.2. Liability of the father of a minor contributory for shares issued in the minor's name.3. Interpretation of contractual relations in cases involving minors and shares in a company.4. Applicability of previous legal judgments to the current case.Analysis:1. The Civil Miscellaneous Appeal pertains to an order made by the District Judge of Coimbatore in an application under Section 184 of the Indian Companies Act to determine the list of contributories. The specific issue at hand revolves around the 18th contributory, where the father of the minor contributory was placed on the list by the order of the District Judge, leading to an appeal by the minor. The core contention is the liability of the father for shares issued in the minor daughter's name.2. The case involves a situation where shares were applied for and registered in the name of a minor, which is inherently void. The Official Liquidator claimed contribution from the minor when the company went into liquidation, prompting the minor, through her father, to disclaim any personal responsibility based on her minority status. However, the Official Liquidator argued that if the minor is not liable, the father who signed the application should be deemed to have contracted for the shares and placed on the list of contributories. This argument was accepted by the District Judge, citing precedents and legal principles from previous cases.3. The judgment delves into the interpretation of contractual relations in cases involving minors and shares. Reference is made to various legal precedents, including cases where individuals applied for shares on behalf of minors without revealing their minority status. The court distinguishes between cases where there was a contractual relationship between the company and the person sought to be placed on the register and cases where there was no intention on the part of the person to become a subscriber. The court emphasizes that in the current case, the contract was made under a misapprehension of the law but not the facts, leading to the conclusion that the father should not be held liable as a contributory.4. The judgment concludes by stating that the Official Liquidator did not support the lower court's decision, and after considering the arguments and relevant authorities presented by the appellant's counsel, the appeal is allowed with costs to be paid by the Official Liquidator from the assets of the bank. The court's decision rests on the understanding that the father should not be held responsible for the shares issued in the minor's name due to the circumstances surrounding the application and registration process.