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In the Matter of the Sonardih Coal Co., Ltd. (In Liquidation) Vs. Parmanand Gir - Court Judgment

LegalCrystal Citation
CourtAllahabad
Decided On
Judge
Reported in108Ind.Cas.451
AppellantIn the Matter of the Sonardih Coal Co., Ltd. (In Liquidation)
RespondentParmanand Gir
Excerpt:
companies act (vii of 1913), sections 24, 30--certificate of registration--conclusive evidence of proper registration--evidence to show memorandum was not properly attested or signed, admissibility of--sub-scriber, whether entitled to prove that he signed subject to reservation. - - he says that a draft deed of partnership between certain persons and himself as managing agents was drawn up and signed by himself and the other four persons, and that it was well understood that the memorandum of association which he signed as a promoter and in which he entered that he took 1,000 shares would not be registered with the registrar of joint stock companies until the formal deed of partnership between him and the said four persons as managing agents had been registered......agents to be constituted for managing the company, and that it was on this understanding that he signed the memorandum of association and the prospectus. he says that a draft deed of partnership between certain persons and himself as managing agents was drawn up and signed by himself and the other four persons, and that it was well understood that the memorandum of association which he signed as a promoter and in which he entered that he took 1,000 shares would not be registered with the registrar of joint stock companies until the formal deed of partnership between him and the said four persons as managing agents had been registered.3. he admits that his client signed the memorandum of association and the prospectus. but as regards the memorandum of association, he says that it cannot.....
Judgment:

Ashworth, J.

1. In this case one Permanand Gir who has been entered in the list of contributories by the Official Liquid dators of the Sonardih Goal Company, Limited (in liquidation) has applied that his name should be removed from the list of contributories as ha is not liable for the debts of the Company or to pay up the shares against his name. He is represented by Mr. A Sanyal who has addressed the Court.

2. Mr. Sanyal has stated that he is prepared to show that there was an agreement between his client and certain other Directors that he should be made one of the firm of managing agents to be constituted for managing the Company, and that it was on this understanding that he signed the memorandum of association and the prospectus. He says that a draft deed of partnership between certain persons and himself as managing agents was drawn up and signed by himself and the other four persons, and that it was well understood that the memorandum of association which he signed as a promoter and in which he entered that he took 1,000 shares would not be registered with the Registrar of Joint Stock Companies until the formal deed of partnership between him and the said four persons as managing agents had been registered.

3. He admits that his client signed the memorandum of association and the prospectus. But as regards the memorandum of association, he says that it cannot be regarded as a memorandum within the meaning of Section 30 of the Companies Act for two reasons. One is that although in the column of attesting witness the name of a witness appears against a bracket which covers all the names of the subscribers and the shares taken by them, yet it was a fact which he could prove that these signatures were written by the subscribers at different places and different dates, and that a single person could not have attested (as required by Section 9 of the Companies Act) the signature of each subscriber by means of a single signature on the part of the attesting witnesses. He is also prepared to show that the entry of 1,000 shares against the name of one of the subscribers, namely, Mansa Ram Shukla, was entered subsequent to signature which entry he submits amounts to a forgery invalidating the document, because the document as it stands represents that the signature of the subscribers and the signature of the attesting witness were made after or at the time of the entry as to shares taken.

4. On behalf of the Official Liquidators it is maintained that under Section 24 of the Indian Companies Act the memorandum of association and the prospectus must be deemed to have been properly signed, registered and presented to the Registrar, and that no evidence can be admitted to the contrary. It is also submitted that this being so, under Section 30 of the Companies Act Parmanand Gir shall be deemed to have agreed to become a member of the Company and on its registration was properly entered as a member. He cannot plead that he subscribed the memorandum subject to any reservation.

5. These contentions of the Official Liquidators appear to me to be correct. I overrule the contention on behalf of the objector Parmanand Gir that it can be proved that registration of the Company by the Registrar of Joint Stock Companies was obtained by a fraud perpetrated on Some one else than the objector. Fraud only makes a contract voidable and not void. In the presence of the certificate of incorporation given by the Registrar no such plea can be entertained. The consequence is that the objection fails and is herein rejected. The application by Parmanand Gir for removal of his name from the list of contributories is dismissed with costs.


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