1902 (2) TMI 2 - HC - Companies Law

Court rules shares purchased by individual, not Mutt. Estoppel claim rejected. Appeal dismissed with costs.

The court determined that the shares purchased by Mahant Bagavan Dosjee did not belong to the Mutt but to him personally, as there was insufficient ... - Issues:1. Ownership of shares purchased by Mahant Bagavan Dosjee on behalf of the Mutt.2. Estoppel claim by the plaintiff regarding ownership of shares.3. Company's actions in transferring shares and forfeiture.Ownership of shares purchased by Mahant Bagavan Dosjee:The main argument in the appeal was whether the shares purchased by Mahant Bagavan Dosjee belonged to the Mutt or to him personally. The evidence presented did not support the contention that the shares were bought on behalf of the Mutt using Mutt funds. The application for shares and subsequent actions did not indicate Mutt involvement, and there was a lack of proof that the money used was Mutt funds. The appellant's reference to Hindu Sacred Law texts regarding a Byragi's financial status was deemed insufficient without clear evidence. The deed appointing the plaintiff as the successor did not mention the shares, indicating they were not considered Mutt property. The court concluded that there was no presumption that the money belonged to the Mutt, and the plaintiff failed to prove otherwise.Estoppel claim by the plaintiff regarding ownership of shares:The plaintiff argued that the company's actions, including crediting payments and correspondence, led him to believe that the shares were Mutt property. However, the court found that the company did not cause the plaintiff to believe anything regarding the shares' ownership. The plaintiff's request for transfer was denied as he failed to provide necessary documents or execute an indemnity bond. The company's actions were deemed justified, and the plaintiff's refusal to comply led to the shares being forfeited. The court referenced the Company's Articles of Association, stating that the plaintiff did not provide sufficient evidence to support his claim for ownership transfer.Company's actions in transferring shares and forfeiture:The court held that the plaintiff did not provide evidence to support his claim for ownership transfer, as required by the Company's Articles of Association. The directors acted reasonably in refusing the transfer without proper documentation from the plaintiff. The plaintiff's failure to take appropriate legal action under the Indian Companies Act further weakened his case. The court upheld the District Judge's decision, dismissing the appeal with costs.