1. We have considered the points in this case in the interval since it was first argued, and we think that no object would be gained by our reserving our judgment.
2. There are two general considerations which it is necessary to bear in mind in dealing with a question of this sort. The first is that in the construction of such an Act as this--an Act concerned with the creation and carrying on of joint shock companies, an institution which has an English origin, and takes its shape from English business ways and habits--we must be guided, as far as possible, by the current of English decisions. The second consideration is that, while adhering generally to the principles of construction laid down from time to time by English Courts of law on the various parts of these Acts, we should not forget that such enactments when introduced into this country have to be applied to a people for the most part unfamiliar with our business ways and experience, as well as with our language,--a consideration which makes it desirable that we should be careful not to clog the interpretation and application of these enactments with unnecessary refinements and technicalities which are not made imperative by the plain words of the Act. Those Joint Stock Companies' Acts, following previous Acts, endeavour to embody in a convenient and comprehensive form, such rules as previous experience had proved to be convenient. This accounts for the general and untechnical character of many of their provisions. It would be undesirable, we think, by any want of liberality in construction, to set in the way of those classes in this country whose interests are practically concerned with questions of company law, any snares and pitfalls that our care can prevent.
3. Applying these general principles to the construction of this Section 175 with which we are now concerned, it would be impossible, we think, to refuse to follow the recent English decisions as to the requirements of a good notice under the latter part of that section. Such a notice, it has been held, must not only express the shareholder's dissent from a proposed conversion, but must go on to say what he desires the liquidators to do. It is obviously necessary that without any delay an intimation should be given to the liquidator of the claim which the dissentient shareholder intends to make upon the Company. In the present case the notice of the 5th August conveyed merely an expression of dissent from the resolutions previously arrived at; there was no express intimation in it that the dissenting shareholder would claim his proportion of the assets, and that steps should be taken with a view of paying to him the value of his shares. Probably Joosub was not aware, as most people were not then aware, of the importance of such a further intimation. Down to that time the necessity was perhaps not clearly understood even in England. So little was it apprehended that in De Rosaz's Case L.R., 4 Q.B. 474 in the Court of Exchequer Chamber decided in 1869, it was possible for so cautious and experienced a Judge as Hannen, J., to express himself thus: 'Upon a shareholder expressing his dissent, it becomes the duty of the liquidators to elect which of two courses they will pur sue: they must either abstain from carrying their resolution, or purchase the interest held by the dissentient member. I reserve, for the moment, the question how the price is to be arrived at, whether by agreement or by arbitration. If the liquidators have manifested their election to purchase the interest, then, as it appears to me, it is not open to them afterwards to withdraw from that election. When the election is made, a valid contract is entered into for the purchase and sale of the interest of the dissentient shareholder; and it is immaterial whether the price is ascertained by agreement, or by the mode substituted for agreement, namely, by arbitration.' No doubt in that case the point we are now considering was not definitely raised; but it is impossible that Hannen, J., should have used such language if at that time the stringent requirements of the section, as afterwards interpreted by the Master of the Rolls, were generally received and understood by the profession and by the Bench.
4. In the present case the liquidators from the first seem to have understood the notice, not merely as a notice of dissent, but as an intimation also that the dissentient shareholder would require the value of his interest to be ascertained and paid to him. Now the purpose of a notice is to convey certain information to the mind of another. Suppose it proved that there existed a custom in Bombay by which such a notice as this was understood to convey the further intimation required by the section. The intimation would thus be tacitly incorporated in the notice of dissent; and is there anything in the Act, or outside of it, which should prevent a Court giving effect to such a custom so enlarging the literal sense of the notice? So here, we think, if the notice being thus intended, the liquidators did, as a matter of fact, so understand it, it is hard to say that that was not, for practical purposes, a sufficient intimation of the dissentient shareholder's intentions. The question is simply what he meant and what they understood him to mean. In this view it is that the general considerations we have already adverted to are of importance. The provisions of the Act are for business men, and business men as much as lawyers had to do with the framing of it. No particular form is prescribed: it is enough if the dissentient's wish is brought homo to the liquidators' minds. That in this case the liquidators did understand the notice as indicating that the dissentient looked for a return of his money and so accepted it is quite clear, for their response to it is an offer of Rs. 1,200 a share. It was, therefore, as a matter of fact brought home to the minds of the liquidators that Joosub would require to be paid the value of his interest in the Company. It was done in a way to which they at the time assented; and that being so, we think that, if the liquidators were at liberty to exercise any discretion in the matter, the requirements of Section 175 were sufficiently satisfied.
5. Then arises the question, was it open to the liquidators, was it within their powers, to act in this manner; to accept such a notice as sufficient, and thereupon to enter on a negotiation for a settlement with the dissentient shareholder, and, that failing, to proceed to a submission to arbitration? This is a question of some difficulty, and it is unfortunate that there are apparently no reported cases on it. We must, therefore, in dealing with it be guided by general principles and by a consideration of such sections of the Act as may throw light upon it. What is the position of a dissenting shareholder under the Act? He is entitled to his share in the assets. Certain powers are given to a majority of the shareholders over the rights of the minority, but these powers have reference to the central idea and purpose of the Company for the attainment of which it is incorporated. It is only in their domestic forum, within the limits of the Company as a company, that the majority can pretend to an authority over the individual members. They have no power to convert a dissentient shareholder into a shareholder of a new Company. A majority can put an end to the old Company but if they do so, a dissenting shareholder is entitled to retire from the concern with as little loss as possible. To enable him to do this, a machinery is provided by the law. A liquidator is appointed for that as well as for other purposes. To him the shareholder so dissenting is bound to look; the liquidator to him represents the Company, that is, he represents the private interests of the remaining shareholders in the partnership. He fills no public capacity, and represents no public interests; he merely represents the private interests of individuals more or less numerous, Filling that character his duties are laid down by the Act Section 149, Sub-section 7, provides that every voluntary liquidator may, without the sanction of the Court, exercise all the powers given by the Act to official liquidators, and official liquidators with the sanction of the Court could, under Section 116, Sub-section 8, have entered into such an arrangement as this. Prima facie, therefore, a voluntary liquidator has power to enter into an arrangement of this sort, and there is nothing, we think, in Section 1 75 which prevents him from doing so. It a dissentient shareholder does not send a notice strictly in accordance with the requirements of Section 175 he may lose his right to insist on being bought out in the manner contemplated, but that does not necessarily preclude the liquidator from yielding to him what he has lost the right to insist on. If the liquidators, accepting a technically defective notice as sufficient, make an offer to buy his interest, the dissentient shareholder may accept it, and when he accepts it the liquidator must be held to it. In the words we have already quoted, 'it is not open to them afterwards to withdraw from that election...a valid contract is entered into for the purchase and sale of the interest of the dissentient shareholder.' We do not think there is anything in Sir G. Jessel's decision which is opposed to this. His decision laid down that a liquidator must have both the notices--the notice of dissent and the notice of claim--and that within seven days and very good reasons for so holding are given. Cases could be put, in which it would be of the greatest importance to the liquidator to know exactly what the dissentient shareholders will claim. The liquidator may hold the shareholder to that, and insist on it as his right; but why should it not be equally open to him to refrain from doing so, and to enter into such an arrangement as the liquidators in this case entered into, first by their letter of 23rd August, and finally by the agreement of reference of the 12th October, 1878? No public interest suffers by it, and it is not the function of the liquidators to lay hold of every technical excuse for fleecing one member, or group of members, for the benefit of the others. They may do what an honourable set of partners would do, and certainly the latter would not say: 'We knew what you meant; but as your notice was defective in form, we will stand on our right to ignore it.' Such is not the purpose of the Act, which was meant to make common practices effective, to remove embarrassments not to create them.
6. The agreement of reference having been executed, the arbitration was duly entered on. Little, however, was done. There seems to have been some remissness on both sides, but not so much on either as to deserve the name of negligence. The time for making the award, which would otherwise have elapsed, was extended to the 27th December, 1878; but no award was made, and on that day the time expired. The next day, the 28th December, Joosub files his Suit No. 660 of 1878. On the 1st March, 1879, the private liquidation of the old Company is converted into liquidation under the supervision of the Court, and proceedings in the suit are accordingly stayed. On the 10th July, 1879, the application to Green, J., is made, to extend the time for making the award, or, in the alternative, to remove the stay of proceedings. The learned Judge, rightly as it seems to us, held that the time agreed on having already expired, the arbitration proceedings were dead and he had no power to revive them; but he removed the stay, and the proceedings in the suit consequently went on. After some time the suit came on for hearing. The old Company had given an undertaking not to take the objection that there was no cause of action, no arbitration having been had, and no award arrived at; but the new Company had given no such, undertaking, and they raised that very point, and, as it proved, successfully. Sir Charles Sargent held that the suit could not be maintained--arbitration and an award having been made by the Act a condition precedent to the bringing of any suit. There Saving been no award made, he held that the necessary basis of the action was wanting. If Sir Charles Sargent was right in that opinion, and we do not doubt that he was--see New River Company v. Mather L.R. 10 C.P. 442 and Caledonian Railway Company v. Carmichael L.R. 2 H.L. (Sc) 56 it would be a very singular operation oil the law that tolls a man that he cannot sue till he has first fixed a value by arbitration, and at the same time tells him that one attempt at arbitration having already been made, though followed by no result, no other can ever be made. There having been no fraud and no gross negligence on his part, are we bound to hold that all remedy is gone by the failure of the former arbitration proceedings? There is nothing peculiar in the objects and the intended operation of the arbitration clauses of the Act. The ordinary principles apply to them. The reference to arbitration is to be like any other reference to arbitration, and the object plainly is to arrive, without litigation, and in a cheap and simple way, at a definite result in the shape of an award. Unless the Act expressly enjoins it, which it does not, there is no reason we think why, a first arbitration failing, a second should not be entered upon. The first arbitration may fail from a number of causes. The arbitrators may be crossing the harbour one day and be drowned; or the decision having been left to an umpire, the umpire may die on the day he was to have made an award. The arbitration may fail owing entirely to some mistake or neglect of the arbitrators. Is the dissentient shareholder without remedy in all these cases? He is, by virtue of Sir Charles Sargent's decision, if a second arbitration is impossible. We think that we are not driven to so monstrous a conclusion; the Act does not expressly provide for a second arbitration in these or any other cases, but it does not forbid it. Therefore general principles must be applied, and the cases show that a first arbitration having failed, the matters referred revert to their position before the reference. Hence a second arbitration may be, and indeed must be, entered on as the only possible way to a decision. In cases under the Act no doubt the second arbitration would have to be governed by the provisions of Sections 178 and 179 that is not questioned. But, subject to these provisions, a second arbitration we think may be had, unless there are reasons in the particular case for refusing it. Sir Charles Sargent's judgment, we think, almost imposes on us the necessity of arriving at this conclusion. The first arbitration under the reference of the 12th October, 1878, was, we think, an arbitration under the Act, in spite of the informalities attending it; but nevertheless we think the law has not forbidden a second arbitration. The right which that arbitration was to define in terras of money subsisted before it, and was not annihilated by its failure. It exists still, and only awaits precise ascertainment in the mode prescribed by the Act. Arbitration being made imperative, the parties are bound to take the requisite steps in order to prevent a complete failure of remedy.
7. We confirm the order of Bayley, J., in so far as it relates to the arbitration held under the reference of the 12th October, 1878; but as to the rest of the order, it must be modified in this sense, that the parties are to proceed with the new arbitration referred to in the petition. The third determination of the learned Judge, as to Joosub's not being entitled to have the price of his shares determined by arbitration, will thus become inoperative.
8. This order, it must be clearly understood, in no way affects the rights of creditors. Those rights may still be urged; such as they were before, they are now. The present decision only affects the relations of this shareholder and the company of which he is a member.
9. Costs of all parties here and below to come out of the fund. The liquidators' costs to be taxed as between attorney and client.