Civil suit for share-call recovery depends on valid forfeiture, proper amalgamation proof, and limitation compliance.

Civil jurisdiction remains available for a banking company's suit to recover share-call money from an ex-shareholder where the dispute does not arise in winding-up proceedings. The sanctioned amalgamation of the transferor bank with the plaintiff bank is treated as valid when supported by the Government notification and presumed regular under evidentiary principles. Forfeiture of shares, however, requires strict compliance with the prescribed notice and procedural requirements under Table A; absent proof of service and a valid forfeiture resolution, the forfeiture is invalid. In that event, the plaintiff cannot rely on a fresh cause of action, and limitation may bar the recovery claim.

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Issues: (i) Whether the civil court had jurisdiction to entertain the suit for recovery of call money by a banking company against an ex-shareholder; (ii) whether the amalgamation of the transferor bank with the plaintiff bank was valid; (iii) whether the forfeiture of the defendant's shares was valid and, if not, whether the suit was barred by limitation.

Issue (i): Whether the civil court had jurisdiction to entertain the suit for recovery of call money by a banking company against an ex-shareholder

Analysis: Section 9 of the Code of Civil Procedure, 1908 confers jurisdiction on civil courts unless barred expressly or by necessary implication. Section 45B of the Banking Regulation Act, 1949 gives exclusive jurisdiction to the High Court only in claims by or against a banking company in winding up. Section 10 of the Companies Act, 1956 confers exclusive jurisdiction on the High Court only for the matters specifically enumerated therein and for winding-up matters. A suit for recovery of call money from an ex-shareholder is not a winding-up claim and does not fall within the exclusive jurisdiction provisions.

Conclusion: The civil court had jurisdiction. The objection was against the defendant.

Issue (ii): Whether the amalgamation of the transferor bank with the plaintiff bank was valid

Analysis: The sanctioned scheme of amalgamation was evidenced by the Government notification and was admissible as proof of compliance under Section 45(7A) of the Banking Regulation Act, 1949. The court also relied on the presumption of regularity under Section 114(e) of the Indian Evidence Act, 1872. The document was treated as a true copy of the sanctioned scheme and the statutory requirements were held to have been satisfied.

Conclusion: The amalgamation was valid. The objection was against the defendant.

Issue (iii): Whether the forfeiture of the defendant's shares was valid and, if not, whether the suit was barred by limitation

Analysis: Regulations 29 to 33 of Schedule I of Table A of the Companies Act, 1956 require a proper notice before forfeiture and strict adherence to the prescribed procedure. The evidence did not establish service of the forfeiture notice or proper proof of the forfeiture resolution. In the absence of valid forfeiture, the plaintiff could not claim a fresh cause of action from the date of forfeiture, and the suit filed later was beyond limitation under Article 30 of the Limitation Act, 1963.

Conclusion: The forfeiture was invalid and the suit was barred by limitation. The finding was in favour of the defendant.

Final Conclusion: The decree passed by the appellate court was set aside, and the suit for recovery of money failed on the grounds of invalid forfeiture and limitation.

Ratio Decidendi: A civil suit for recovery of share-call money by a banking company against an ex-shareholder is maintainable where the dispute does not arise out of winding up, but forfeiture of shares is valid only upon strict compliance with the prescribed notice and procedural requirements, failing which the claim may also be barred by limitation.

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