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C. Kuppiah Chetty Vs. P. Saraswathi Ammal and ors. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtChennai
Decided On
Reported inAIR1941Mad769; (1941)2MLJ571
AppellantC. Kuppiah Chetty
RespondentP. Saraswathi Ammal and ors.
Cases Referred(vide Maneckji Pestonji v. Wadilal Sarabhai
Excerpt:
- - but in the circumstances i am not satisfied that this error can be taken to detract from the validity of the judgment. ii in which he undertakes to transfer to the plaintiff the shares in question and the agreement goes on 'i herewith hand over to you duly endorsed the share certificates',and there are further recitals as to the liabilities under the transfer. ratna mudaliar was duly endorsed to the plaintiff on the 26th february, 1934 which finding is of course in direct conflict with the conclusion of the trial judge......case are that the plaintiff desired to acquire certain shares in a company which were owned by mr. ratna mudaliar who was the father-in-law of the first defendant. the plaintiff therefore paid a sum of money to the defendants and took from them a promissory note which is the basis of the present suit. at the same time he gave them a letter (ex. i) in which he promises to return the promissory notes duly cancelled as soon as the defendant got mr. ratna mudaliar's 20 shares transferred to the plaintiff or his nominee. this was on the 17th february, 1934. on the 26th february, 1934 mr. ratna mudaliar executed an agreement which is ex. ii in which he undertakes to transfer to the plaintiff the shares in question and the agreement goes on 'i herewith hand over to you duly endorsed the share.....
Judgment:

Wadsworth, J.

1. These revision petitions both arise out of an order of a Bench of the Madras Small Cause Court directing a new trial under Section 38 of the Presidency Small Cause Courts Act. A preliminary point has been raised in the following rather unusual circumstances. The application for a fresh trial was heard by the Chief Judge and the second judge, the third judge Mr. Padmanabha Aiyangar being then absent. The judgment as signed and issued purports to be a judgment of all the three judges of the Court. A report submitted by the learned Chief Judge makes it clear that the case was actually heard only by the Chief Judge and the second Judge and that these two judges alone were concerned with the preparation of the judgment and they signed it without reference to the third judge. By some regrettable error the judgment thus completed seems to have been placed before the third judge for signature and he also signed it though he had nothing whatever to do with the trial of the case. It is no doubt regrettable that a judge should sign a judgment about which he knows nothing and with which he has no concern; but in the circumstances I am not satisfied that this error can be taken to detract from the validity of the judgment. The case was tried by two judges, the judgment was prepared by those two judges and was signed by those two Judges. The superfluous initials of the third judge cannot be said to make the judgment a judgment of that judge also who initialled it in error.

2. Turning to the merits of these two revision petitions the facts of the case are that the plaintiff desired to acquire certain shares in a company which were owned by Mr. Ratna Mudaliar who was the father-in-law of the first defendant. The plaintiff therefore paid a sum of money to the defendants and took from them a promissory note which is the basis of the present suit. At the same time he gave them a letter (Ex. I) in which he promises to return the promissory notes duly cancelled as soon as the defendant got Mr. Ratna Mudaliar's 20 shares transferred to the plaintiff or his nominee. This was on the 17th February, 1934. On the 26th February, 1934 Mr. Ratna Mudaliar executed an agreement which is Ex. II in which he undertakes to transfer to the plaintiff the shares in question and the agreement goes on 'I herewith hand over to you duly endorsed the share certificates', and there are further recitals as to the liabilities under the transfer. This agreement purports to be signed by Mr. Ratna Mudaliar on the 26th February and to be counter-signed by the plaintiff on the same date. The actual share certificate is Ex. Ill and this certificate contains an endorsement of transfer signed by Mr. Ratna Mudaliar and dated the 26th February transferring the shares to the plaintiff; but the spaces for the signature of the transferee and of the company's officials are not filled. A few days after this transaction Mr. Ratna Mudaliar resigned his position in the management of the company and the plaintiff became its chairman. Nothing more was done in the matter of the transfer of the shares until the company got into difficulties and went into liquidation in November. Then we have Ex. IV dated the 20th November, 1934 which is a lawyer's notice to the two defendants claiming payment of the amount due under the promissory note.

3. The suit on the promissory note was tried by the learned second judge of the Small Cause Court who came to the conclusion that the transfer endorsement on the share certificate Ex. III was not signed by Mr. Ratna Mudaliar on the 26th February, that the agreement Ex. II was taken back by the first defendant from the plaintiff after counter-signature and was never afterwards delivered to the plaintiff, that Ex. III was not delivered or even tendered to the plaintiff and that the plaintiff did not as alleged request the first defendant to keep in his custody Exs. II and III until the return of the promissory note. On these findings the learned Judge came to the conclusion that the ownership of the shares remained with Mr. Ratna Mudaliar, that the defendants had not done that which was obligatory upon them if they wanted the promissory note to be cancelled and that they could not require the plaintiff to take a transfer of the shares after such unreasonable delay when the company had gone into liquidation and that the defendants were therefore obliged to pay the amount due under the promissory note.

4. There was an application for a fresh trial which, as I have stated was heard by the Chief Judge along with the trial judge. This Bench gives a finding that the share certificate standing in the name of Mr. Ratna Mudaliar was duly endorsed to the plaintiff on the 26th February, 1934 which finding is of course in direct conflict with the conclusion of the trial Judge. They also come to the conclusion that Exs. II and III show that the shares were transferred on the 26th February, 1934 and somehow they seem to think that the crucial question in the case is whether there was a valid agreement to transfer the shares and that this would depend upon whether Mr. Ratna Mudaliar's acceptance of the plaintiff's offer was communicated to the plaintiff. It was for a decision of these questions that a new trial was ordered. It is conceded on both sides before me that the questions formulated for decision at the fresh trial are not the real questions which arise in the case and it is also not seriously disputed that the Bench has given findings of facts which are in conflict with those of the trial judge and that it is on the basis of these findings of facts that the fresh points for determination have been formulated. It has been held by this Court (Sai Sikandar Rowther v. Ghouse Mohidin Marakayar (1916) 32 M.L.J. 213 : I.L.R. 40 Mad. 355, that a Full Bench of the Small Cause Court under Section 38 does not exercise appellate powers and has no jurisdiction to decide questions of fact. If it comes to the conclusion that the findings of fact by the trial Court are unsupported by evidence and are such as to justify interference in revision the proper procedure is not to give fresh findings of fact but to order a retrial at which the facts may be gone into afresh. Moreover there is no serious dispute between the parties, so far as I have been able to gather, as to the validity of the agreement to transfer these shares or as to the fact of the communication of Mr. Ratna Mudaliar's agreement to transfer to the plaintiff. The real question in issue between the parties is whether Mr. Ratna Mudaliar at the time when this agreement was communicated to the plaintiff completed the endorsement of transfer so far as he was able to do so and thereby appropriate the particular shares for the performance of his contract with the plaintiff and converted those shares into specific goods in a deliverable state so as to satisfy Sections 20 and 23 of the Sale of Goods Act. If on that date Mr. Ratna Mudaliar not only signed Ex. II but also signed the transfer endorsement and communicated to the plaintiff the fact that the shares were in a deliverable state so that the plaintiff could complete the formalities by handing over the cancelled promissory note and getting the transfer registered in the company's books there was nothing more for Mr. Ratna Mudaliar to do and title in the shares would pass to the transferee (vide Maneckji Pestonji v. Wadilal Sarabhai & Co : (1926)51MLJ1 . I am not prepared to take the view that Ex. II by itself would amount to a transfer deed sufficient to cause title to pass. It purports to be an agreement of transfer accompanying the actual instrument of transfer and if the instrument of transfer has not been completed so far as the transferor could complete it, Ex. II by itself would be nothing more than an enforceable agreement to convey and until the transfer endorsement was signed the shares would be unascertained goods and they would not be in a deliverable state. But if on the 26th February, Mr. Ratna Mudaliar signed both the agreement Ex. II and the transfer endorsement on the share certificate and communicated the fact to the plaintiff who counter-signed Ex. II in token of acceptance of the transfer, then it was the plaintiff's fault that he did not cancel the promissory note and get the formalities of the transfer completed. In such circumstances the result would be that title in the shares would pass to the transferee and the plaintiff would be disenabled from suing on the promissory note. It seems to me therefore that in view of the contention that the trial Court's finding of fact regarding the execution of the endorsement on Ex. III is not supported by evidence and having regard to the fact that the trial judge himself sitting with the Chief Judge has arrived at a conclusion on the same materials which is diametrically opposed to the findings of fact in the actual trial it is desirable that there should be a fresh trial in the course of which the essential facts may be found afresh.

5. The order of the Bench is therefore set aside. There will be a fresh trial in the course of which the trial Judge will decide whether title in these shares passed to the plaintiff on the 26th February, 1934, which question will depend on the further question whether at the time of the execution of Ex. II by Mr. Ratna Mudaliar he also executed the transfer endorsement on Ex. Ill and communicated to the plaintiff the fact that he had executed the transfer endorsement. The costs throughout will abide the result and the parties will be free to adduce fresh evidence. The Chief Judge will consider the desirability of posting this case before a Judge who has not hitherto been concerned with it.


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