TaxTMI 
TaxTMI 
1948 (3) TMI 22
X X X X Extracts X X X X
X X X X Extracts X X X X
....e view of the Supreme Court that the appellant's case can be shortly disposed of and, agreeing as they do with that Court's reasons and conclusion, do not propose to examine at length faces and contentions which are not strictly relevant to the question now to be considered. The respondent is a public company registered in Palestine in October, 1934. By clause 4 of its Memorandum of Association its capital was L.P. 25,000 divided into 25,000 shares of L.P. 1 each. In April, 1935, one of such shares had been issued to each of the eight subscribers to the Memorandum. On the 12th April, 1935, the eight shareholders purported to pass a resolution which provided that of the unissued share capital of the company L.P. 11,000 should be issued....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ppellant is entitled to recover iron; the respondent company the money paid by her for the preference shares upon the footing of a total failure of consideration, their Lordship are content to ignore and treat as the outcome of a separate transaction the receipt by her of the 38 ordinary shares. The appellant held her shares for four years and then sold her 775 preference shares and also her ordinary shares, of which she had increased her holding to 50, through the Holland Bank Union for L P. 116,250 and L.P. 3,750 respectively. The transaction is somewhat obscure but it is not in doubt that she executed transfers in blank which were ultimately on 28th September, 1941, completed as to the preference shares in favour of the Palestine Inde....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s as there had been a delay for nearly 8 years, and that she would repudiate any allotment of shares the company might be advised to make in the future. At the same time they wrote a letter to the Holland Bank Union (to which, since learned counsel for the appellant relies on it, it is proper to refer) enclosing a copy of their letter to the company and saying "Now we wish to make it clear that our client does not desire to collect from the company the amount due to her from it and at the same time to retain the sum she received from you in 1939." It cannot, however, fail to be observed that there is an implication that, if for any reason the appellant cannot recover from the company, she will not relinquish the money received from the b....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ot exactly that which she bargained to get. Whether that transferee, finding that the shares had not been validly issued would have any claim against her is a question which does not fall to be determined. But it appears to their Lordships to be idle to suggest that one who has parted with her shares for value can at a later date (it may be against the wish and against the interest of her transferee) challenge the validity of the issue and, succeeding in that challenge, then claim that she received something of no value and that there was a total failure of consideration. On the contrary, whether the issue was valid or invalid, a matter no longer important to her but vitally important to her transferee, she received something from the compa....