TaxTMI 
TaxTMI 
1965 (8) TMI 55
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.... in Civil Appeal No. 203 of 1965, holds 163 shares in the company. Articles 29 and 30 of the articles of association of the company read: "29. The notice shall name a future day, not being less than seven days from the service of the notice, on or before which such call or other money and all interest and expenses that may have accrued by reason of such non-payment are to be paid and the place where payment is to be made, the place so named being either the registered office of the company........ are usually made payable and shall state that in the event of non-payment at or before the time and at the place appointed the share in respect of which such payment is due, will be liable to be forfeited. 30. If the requisitions of any such....
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....bt due to and recoverable as such by the company under article 14. By order of the Board, (Signed) A.R. Hassain Khan, Managing Director." In spite of this notice, the respondents did not pay the call monies, and on February in, 1957, the board of directors passed a resolution under article 30 forfeiting the shares held by them. On November 8, 1957, the 'respondents' filed two separate applications under section 155 of the Companies Act, 1956, in the High Court of Madras praying that the forfeitures be set aside and the necessary rectifications be made in the share register of the company. Ramachandra Iyer J. allowed the applications, and passed conditional orders for rectification of the register, and his decision was affirmed by the ....
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....ctive in respect of the demand for expenses. The amount of expenses incurred by the company by reason of the non-payment was not disclosed. The respondents were not informed how much they should pay on account of the expenses. The object of the notice under article 29 is to give the shareholder an opportunity for payment of the call money, interest and expenses. The notice under article 30 must disclose to the shareholder presumably conversant with the articles sufficient information from which he may know with certainty the amount which he should pay in order to avoid the forfeiture. In the absence of particulars of the expenses, the respondents were not in a position to know the precise amount which they were required to pay on account of....
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....f the notice dated January 20, 1957, was not open to the respondents in the absence of any pleading on this point. In the affidavit in support of the application, the respondents pleaded that the steps prescribed before there can be a forfeiture have not been complied with. No further particulars were given, but the contention as to the invalidity of the notice dated January 20, 1957, was pointedly raised in the argument in the first court. The contention was allowed to be raised without any objection. Had the objection been then raised, the court might have allowed the respondents to file another affidavit. The appellant cannot now complain that the pleadings were vague.' We may now conveniently refer to certain events which happened af....
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....r abandonment by the respondents of their right to challenge the validity of the notice dated January 20, 1957, and the subsequent forfeiture. We also fail to see how the order of the court dated January 30, 1957, can amount to a notice under article 29. The only notice tinder article 29 is the one dated January 20, 1957, and as that notice 1s defective, the forfeiture is invalid. Counsel for the appellant contended that the relief under section 155 is discretionary, and the court should have refused relief in the exercise of its discretion. Now, where by reason of its complexity or otherwise the matter can more conveniently be decided in a suit, the court may refuse relief under section 155 and relegate the parties to a suit. But the po....