Dalmia Jain Airways Ltd. vs Miss Saroj Rani and Another

Kapur, J.—This is a original petitioner''s appeal against an order passed by District Judge Sh. Dulat dated 18-5-1949 holding that the name of Sita Ram Kalyani cannot Be substituted in place of the , names of Pushpa Rani and Saroj Rani.

On 7-8-1946 Sita Ram Kalyani made two applications for the allotment of shares of the original petitioner company and out of these, Pushpa Rani was to have one hundred and Saroj Rani another hundred. The shares were fully paid up and the cheque was issued by Sita Ram Kalyani The Dalmia Jain Airways Limited, made an application u/s 38 of the Companies Act for rectification of the register and substitution of the name of Sita Ram Kalyani in place of his two minor daughters, Pushpa Rani and Saroj Rani.

Evidence was led to show that the money was paid by the father from out of the monies which belonged to the grandmother of the minor children which was accepted by the learned District Judge and following a judgment of the Madras High Court in -- M.S. Palaniappa Mudaliar (as guardian of his daughter Meenakshi) Vs. The Official Liquidator, The Pasupathi Bank Ltd., it was held that the register could not be rectified as the contract has been entered into with the minor girls and not with the father.

It has also been found that the applications were before the Company and they entered into the contract with their eyes open. The first question raised is whether an appeal would lie against the order of the District Judge. Section 38, Companies Act, has a proviso in the following words:

"Provided that the Court may direct an issue to be tried in which any question of law may be raised, and an appeal from the decision on such an issue shall lie in the manner directed by the Code of Civil Procedure, 1908, on the grounds'' mentioned in Section 100 of that Code."

In the present case there is no indication that the Court directed any issue to be tried, but even if it were so, it is not necessary to decide this question, because, in my opinion, there is no farce in this appeal. The money in this case was paid on behalf of the minor daughters by the lather and the applications which were made by the father indicated quite clearly that the persons to whom the shares were being allotted were minors, and this, in my opinion, falls within the rule laid down by the Madras High Court in AIR 1942 Mad 470 (A), where it was held that where an application is made by the father as guardian of his minor daughter for shares and the company issues shares to and register shares in the name of the minor describing her as a minor the transaction is void on the face of it and the father of the minor who has signed the application cannot be deemed to have contracted for the shares and cannot be placed on the list of contributories. The learned Judge, in my opinion, has rightly held that the father cannot be substituted in circumstances such as these.

I would therefore dismiss this appeal with costs.

Khosla, J.

I agree.