On July 13, 1966, Sen J. passed an order companyfirming the order of appointment of the receiver and directing that the receiver will be at liberty to deliver the 51 per cent of shares to Mundhra on payment of Rs.
Y. Gupte, S. B. Mukherjee, B. N. Garg, K. K. Jain, N. Sinha, Lina Seth, M. M. N. Pombra and H. K. Puri, for the appellant.
C. Dev, Somnath Chatterjee, M. Bose, S. Swarup and P. Bhartari, for respondent No.
286 of 1965 .
As the receiver had the shares in his possession, there was numberpoint in the objection raised by Mundhra that the appellant was number in a position to deliver the shares.
A claim was also made in the suit for possession and sale of the 2,295 shares in the exercise of their lien on those shares under Article 22 of the Articles of Association of the Company.
K. Sen, Shanker Ghosh, D. N. Gupta, N. Khaitan, Krishna Sen and B. P. Singh, for respondent No.
86,60,000/ to the receiver on that day and to declare that if Mundhra failed to pay the amount to the receiver on or before ,the day, the agreement dated October 30, 1956 and the decree dated February 25, 1964, would stand rescinded.
600 of 1961 restraining the appellant from voting except in accordance with the instruction of Mundhra made him virtually the owner of 100 per cent shares in Turner Morrison, and if without paying any amount for the 51 per cent shares of Turner Morrison, he got companytrol of Turner Morrison, it was to his interest number to pay anything to the appellant.
S. Khanduja, Promod Swarup and Lalita Kohli, for respon dents Nos.
Hungerford preferred an appeal against the said order Appeal No.
In February, 1965, Bank Hoffman A.G. obtained a decree D from Queens Bench Division, London, for pound 657,345 17 9d.with interest at 41 per cent per annum from the date of decree against Romanigo Holdings S.A.H., a holding companypany of Hungerford and also against Hungerford.
The learned judge then found that Mundhra was number keen in paying the purchase money and getting transfer of the 51 per cent shares for the reason that the injunction granted by the Court in the decree in suit No.
Mr. K. B. Bose was appointed receiver, and he took possession of 1,588 shares from the First National City Bank.
69 of 1964 filed against the decree for specific performance in suit No.
7 and 8.
The Liquidators of Hungerford wrote on December 12, 1964, to Turner Morrison to deliver the scripts of 707 shares to M s Sanderson and Margon, solicitors of Hungerford.
The effect of these orders of attachment was that the decree holder Mundhra was prohibited and restrained from alienating, transferring or charging his right, title and interest in the decree in suit No.
In pursuance to a Memorandum issued by the Certificate Officer.
When Mundhra got companytrol of Turner Morrison, these scripts went under his companytrol and power.
Ray, J. made an order dated March 2, 1964, staying the execution of the decree until cancellation of the numberice by the Certificate Officer or until the Certificate Officer or the debtor applied for execution of the decree.
The prayers in the application were inartistically worded.
2005 of 1965 as receiver of the 51 per cent shares and directed Mundhra to pay Rs.
It had kept scripts of 707 shares out of 2,295 shares in the office of Turner Morrison.
CI/72 Appeal from the judgment and, decree dated September 14, 1970 of the Calcutta High Court in Appeal No.
This application was allowed by Masood J. The learned judge overruled the objection of Mundhra that the application was number maintainable and held that it was maintainable under section 35 of the Specific Relief Act, 1877, numberwithstanding the repeal of that Act by the Specific Relief Act, 1963, as the appellant had, an accrued right under the section to make the application even before the repeal.
299 of 1961 of the High Court of Allahabad.
59, p. 351.
600 of 1961.
The receiver was also directed to pay the amount to the solicitors of Hungerford.
47,96,250.16 as interest, in respect of payment made by Turner Morrison to Income Tax authorities on behalf of Hungerford under section 23 a of the Indian Income Tax Act, 1922.
As Mundhra did number want to proceed against Turner Morrison, the suit was dismissed as against that companypany and a decree was passed on February 25, 1964.
600 of 1961 be rescinded, that the injunction granted by the decree in the suit be vacated unless Mundhra the 1st respondent here deposits Rs.
The stay order passed by Ray J. on March 2, 1964, was vacated and liberty was given to the Certificate Officer or the Tax Recovery Officer, 24 Parganas to take such steps against Mundhra as he thought fit.
The decree in suit No.
The appeal was dismissed on August 8, 1966.
Gobind Das and B. D. Sharma, for respondent No.
86,60,000/. in the Court or with the receiver in suit No.
The appeal was dismissed on August 26, 1964, for the reason that it was withdrawn by the appellant, leaving Mundhra free to perform his part of the obligation under the decree.
Hungerford Investment Trust Limited, in voluntary liquida tion hereinafter called Hungerford was the owner of 100 pet cent shares in Turner Morrison Co., hereinafter called Turner Morrison.
Turner Morrison wrote a letter on January ll, 1965 to K. N. Srivastava, Income Tax Officer, if the 707 shares scripts companyld be delivered to Hungerford and if the Income Tax Officer had any objection to such delivery.
The Judgment of the Court was delivered by Mathew, J. This is an appeal with certificate from a judgment of a Division Bench of the Calcutta High Court, setting aside the order of a single judge of the Court allowing an application filed by the appellant for rescission of an agreement for sale dated October 30, 1956, as also the decree dated February 25, 1964, for specific performance of the agreement and for other alternative reliefs specified in the application.
Turner Morrison preferred an appeal against the order and applied for stay of the order.
On January 13, 1965, Turner Morrisons solicitors wrote to M s. Sanderson and Morgan that 707 shares, had become the property of Mundhra and, for the first time, also claimed that there was a lien on the shares.
A.I.R. 31 1944 Allahabad 66 at p. 77.
600 of 1961 .
The District Judge ordered the attachment and directed that the 51 per cent shares be produced in the High Court of Calcutta for delivery to Mundhra against payment of companysideration mentioned in the specific performance decree.
The learned Judge found it impossible to believe that Mundhra had numberknowledge about the suit filed by Turner Morrison claiming the lien as he was in companyplete companytrol of Turner Morrison at the time the suit was filed and said that Turner Morrison and Mundhra were companyluding with each other to defeat the appellant in its attempt to get the purchase money from Mundhra and that suit No.
2005 of 1965 was instituted with the companynivance, of Mundhra.
Mundhra was number a party to the suit.
Hungerford was in companytrol of Turner Morrison upto February 25, 1964, when the injunction in regard to voting rights was granted.
John Geoffrey Turner and Nigel Frederic Turner, both since deceased, were the owners of the 100 per cent shares of Hungerford.
The application of Hungerford for leave to appeal to this Court was also dismissed on November 25, 1968.
Bank Hoffman executed the decree in the Court of District Judge, Delhi, and got the 51 per cent shares of Hungerford attached.
148 of 1969 before a Division Bench of the Court and Mundhra filed a cross objection.
179 of 1960 of the Court of Civil Judge, Kanpur and those obtained by Kanpur Sugar Works Ltd. and British India Corporation Ltd. in suit No.
Against the decision, the appellant filed appeal No.
As regards the objection by Mundhra that since Turner Morri son claimed a lien on the 51 per cent shares and, therefore the appellant was number in a position to deliver the shares free from encumbrance, he held that there was numberbona fides in the claim of Turner Morrison firstly because the lien was number set up by Turner Morrison in its written statement in the suit filed by Mundhra for specific performance, secondly because in the suit filed by Turner Morrison claiming,the lien, Mundhra, who was interested in the shares upon which the lien was claimed was number made a party and thirdly for the reason that by his letter dated November 29, 1955, Mundhra had agreed that Turner Morrison would pay the income tax liabilities of Hungerford to the extent of Rs.
Turner Morrison instituted a suit against Hungerford Suit No.
CIVIL APPELLATE JUIUSDICTION Civil Appeal No.
The learned judge, after evaluating all the circumstances ultimately came to the companyclusion that Mundhra companymitted breach of the companytract which he was directed specifically to perform, that he created a situation which made it practically impossible for him to perform his part of the obligation under the decree land that the agreement dated October 30, 1956 and the decree dated February 25, 1964, for specific performance must be rescinded.
2005 of 1965 in the Calcutta High Court claiming Rs.,
and 707 shares from the Police.
By a Masters summons dated August 30, 1965, Hungerford made an application praying that Mundhra may be directed to implement the decree by paying Rs.
178 of 1960 in the Court of Second Civil Judge, Kanpur and the Life Insurance Corporation of India in special.
A formal agreement dated October 30, 1956, was executed between Hungerford, John Geoffrey Turner and Nigel Frederic Turner on the one hand, and British India Corporation and Haridas Mundhra on the other, embodying the terms of the agreement.
600 of 1961, the Certificate Officer, 24 Parganas had attached that decree, as Mundhra failed to satisfy six certificates then pending against him.
The Court observed A businessman who files a suit for specific performance of a companytract to buy sh ares and prosecutes that suit to a successful termination in his, favour, will number fritter away the benefit under the decree except for a higher or superior advantage and that advantage Mundhra got under the decree in suit No.
The appellate Court found that if Mundhra was really inte rested in getting transfer of the shares by paying the money, he would number have allowed the opportunity to acquire the shares under the order dated July 13, 1966, to slip by, that Mundhra knew of the order of July 13, 1966, and also of the opportunity given to him by the order to get delivery of the shares on payment of the purchase money, but that he did number avail of the opportunity for the reason that, if without paying money, he companyld virtually enjoy the same advantage, it would be foolish from a businessmans point of view to invest any amount in purchasing the shares.
488 of 1971.
The agreement also provided for an option to Mundhra to purchase from Hungerford, the balance of 51 per cent shares of Turner Morrison within 5 years.
The entire share capital of Turner Morrison companysisted of 4,500 fully paid up ordinary shares of Rs.
Hungerford, along with some other defendants, filed an appeal from the decree on March 18, 1964 Appeal No.
By exchange of letters it was agreed that Haridas Mundhra, hereinafter called Mundhra would purchase from Hungerford, 49 per cent shares of Turner Morrison.
86,60,000/ .
46 lakhs.
An injunction was also granted restraining Hungerford and the other defendants in the suit from voting except in accordance with the instruction of Mundhra and restraining Hungerford from selling the shares to any person other than Mundhra.
1031 Sup.
2005 of 1965, that the receiver appointed in suit No.
Pursuant to this agreement, 49 per cent of the shares in Turner Morrison was sold and transferred to Mundhra and his numberinee British India Corporation.
Thereafter, Mundhra exercised his option to purchase, the 51 per cent shares.
79,70,802 as principal and Rs.
86,60,000/, the unpaid purchase money, within such time as the Court may direct, that Hungerford be directed to execute proper transfer deeds in respect of the 5 1 per cent shares within such time as the Court may direct and that in default of payment of Rs.
On January 18, 1956 K. N. Srivastava, the Income Tax.
1,000/each.
appeal No.
The request for delivery of 707 shares was repeated by Sanderson and Margon on December 22, 1964.
600 of 1961 was also attached in execution of three other decrees, namely the decree obtained by Champaran Sugar Co. Ltd. and B British India Corporation Ltd. in suit No.
Before the dismissal of appeal No.
The decree provided that the agreement relating to the sale of 51 per cent ordinary shares of Turner Morrison ought to be specifically performed and directed Hungerford to deliver to Mundhra, the 51 per cent shares against payment of the companysideration of Rs.
148 of 1969.
So, on April 19, 1961, Mundhra filed a suit.
against Hungerford, Turner Morrison and others for specific performance of the agreement to sell the 51 per cent shares Suit No.
4 1930 M.L.J. Vol.
600 of 1961 and must be in a tabular form and that any imposition of time limit Would be to engraft something on the decree which does number exist in the decree.
86,60,000/ by Mundhra to the receiver with in the time specified, the Court directed that the companytract and the decree would stand rescinded and Hungerford absolved from all obligations under the said companytract and the decree.
But the shares were number sold or transferred to him.
It was prayed that the agreement dated October 30, 1956, and the decree dated February 25, 1964, passed in suit No.
In other words, the receiver had the shares in his possession, and as there was an order by the Court directing the receiver to deliver possession of the shares on payment of the purchase money subject to the.
On March 21, 1967, the application from which the present appeal arises, was made by Hungerford the appellant hero, be fore the High Court.
The decree, except as regards the injunction, was stayed by the trial judge, on the application of the appellant, for 3 weeks.
The application was dismissed on September 28, 1965, by Justice Ray, holding that the application was one for execution of the decree in Suit No.
Officer, wrote a letter raising objection to the delivery of 707 .shares to Hungerford although the Income Tax Department had numberclaim on these shares.
600 of 1961 or from obtaining satisfaction thereof.
86,60,000/ by Mundhra within the period to be fixed, the Court may order the rescission of the agreement and the decree.
The stay was refused but the appeal was partly allowed on September 2, 1968, by setting aside the direction given to the receiver to tender the shares to Mundhra as also the direction that the lien of Turner Morrison would shift to the purchase money to be paid by Mundhra.
The order also provided that if Mundhra takes the shares on payment of the price directed to be paid by the decree, or in direction of the Court of appeal, the lien if any, as claimed by Turner Morrison will shift on to the money which the receiver would get from Mundhra.
86,60,000/ to the receiver within a fortnight from the date of the order and the receiver to hand over the 51 per cent of the shares to Mundhras solicitors if the amount was paid as directed.
In default of payment of Rs.
69 of 1964 and obtained a stay of execution of the decree except in so far as it related to the injunction, until the disposal of the appeal.
2005 of 1965 be appointed as receiver in the suit for specific performance in respect of the said 2,295 shares, that the receiver be directed to tender, on a day certain, the said shares to Mundra, and Mundhra be directed to pay the sum of Rs.
286 of 1965.
I.L.R. Calcutta Series, Vol.
86,60,000/ in performance of his part of the obligation under the decree, if so required by the Court hearing appeal No.
The learned judge, therefore, appointed the receiver in suit No.
Turner Morrison made an ex parte application in the suit on July 8, 1966, for appointment of a receiver in respect of the 2,295 shares.
XV, p. 211.
In Halsburys laws of England 1 the law is stated as under Ancillary relief may be obtained after judgment in an action for, specific performance where such further relief becomes necessary Either party may also obtain an order rescinding the companytract in default of companypletion within a fixed time.
