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THE INDIAN CO-OPERATIVE NAVIGATION AND TRADING CO. LIMITED VS.

PADAMSEY PREMJI

IN THE
HON’BLE
HIGH COURT OF BOMBAY

In the matter of
THE INDIAN CO-OPERATIVE NAVIGATION AND
TRADING CO. LIMITED
(Appellant)
v.
PADAMSEY PREMJI
(Respondent)

Memorandum on Behalf of the Appellant

Counsel for the Appellant

Abhimanyu Singh Rathore

Roll No. 02
Section B
Semester 1

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THE INDIAN CO-OPERATIVE NAVIGATION AND TRADING CO. LIMITED VS.
PADAMSEY PREMJI

TABLE OF CONTENTS

 LIST OF ABBREVIATIONS……………………………………………………......2

 INDEX OF AUTHORITIES…………………………………………………………3

 STATEMENT OF JURISDICTION………………………………………………...4

 STATEMENT OF FACTS…………………………………………………………...5

 ISSUES RAISED……………………………………………………………………..6

 SUMMARY OF ARGUMENTS……………………………………………………..7

 WRITTEN PLEADINGS…………………………………………………………….8

 PRAYER FOR RELIEF……………………………………………………………11

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THE INDIAN CO-OPERATIVE NAVIGATION AND TRADING CO. LIMITED VS.
PADAMSEY PREMJI

LIST OF ABBREVIATIONS

& And

AIR All India Reporter

Art. Article

Edn. Edition

Hon’ble Honourable

Pg. Page Number

Sec. Section

v. Versus

www world wide web

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THE INDIAN CO-OPERATIVE NAVIGATION AND TRADING CO. LIMITED VS.
PADAMSEY PREMJI

INDEX OF AUTHORITIES

ACTS:

 INDIAN CONTRACT ACT,1872

CASES REFERRED:

 K. Narayana Kurup v. Sankaranarayan, AIR 2000 Ker 296

BOOKS:
 Avtar Singh, Law of Contract and Special Relief (11th Edn.)
 Nilima Bhadbhade (ed.), Mulla, Indian Contract Act and Specific Reliefs,
Butterworth’s India, New Delhi, Vol. I & II, (12th Edn.- 2001)

DICTIONARIES:
 Concise Oxford Dictionary, 10th. Edn., Oxford University Press, 2002
 Garner Bryan, Black’s Law Dictionary, 7th Edn., West Group Publications, 2002.

WEBSITES:

 www.manupatra.com
 http://www.scribd.com/doc/27041499/The-Indian-Contract-Act-1872

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THE INDIAN CO-OPERATIVE NAVIGATION AND TRADING CO. LIMITED VS.
PADAMSEY PREMJI

STATEMENT OF JURISDICTION

The appellant has approached this Hon’ble High Court of Bombay under the Section 96 of the
Code of Civil Procedure.

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THE INDIAN CO-OPERATIVE NAVIGATION AND TRADING CO. LIMITED VS.
PADAMSEY PREMJI

STATEMENTS OF FACTS

1. Articles of Association of the plaintiff company states that person applying for the
shares will pay Rs. 2-8-0 per share with the application. Further Rs. 2-8-0 should be
paid within thirty days from the date of payment of application money. After that the
balance of Rs. 5 should be paid within thirty days of the payment of the second payment.
The payment of application money and other two installments was under the Art. 38 of
the Articles of Association.
2. In case any shareholder failed to pay money due from him in respect of any share, such
shares was liable to be forfeited. The forfeiture of share due to non-payment of money
due from him in respect of any share was under Art. 42 of the Articles of Association.
3. Any shareholder whose share was forfeited was, notwithstanding the forfeiture, liable
to pay to the company “all money owing upon the share at the time of forfeiture”. The
liability of the shareholder who failed to pay to the company the money owing upon
the share at the time of forfeiture was under the Art. 45 of the Articles of Association.
4. On August 23, 1919, the defendant applied to the plaintiff company for allotment of
600 hundred shares. He paid Rs. 1500 at the rate of Rs. 2-8-0 per share as application
money.
5. The company allotted the shares to the defendant on August 3, 1920. But failed to give
notice of allotment to the defendant.
6. The Company also omitted to give any notice to the defendant to pay the money
remaining due (Rs. 4500) in respect of the shares.
7. The time for the payment was later extended to May 15, 1921.
8. No payment was made.
9. On March 17, 1925, the company passed a resolution, under Art. 42 of the Articles of
Association, forfeiting the defendant’s shares.
10. The company filed a suit, on January 5, 1928, to recover Rs. 4500 from the defendant.

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THE INDIAN CO-OPERATIVE NAVIGATION AND TRADING CO. LIMITED VS.
PADAMSEY PREMJI

ISSUES RAISED

1. Whether or not there was a breach of contract?


2. Should the remaining amount due be recovered from the respondent?

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THE INDIAN CO-OPERATIVE NAVIGATION AND TRADING CO. LIMITED VS.
PADAMSEY PREMJI

SUMMARY OF ARGUMENTS

1. YES, THERE WAS A BREACH OF CONTRACT.


The plaintiff company had made the allotment of shares to the respondent and as per
the Art. 38 of the Articles of Association of the company, he had to make the due
payment on time which he didn’t do.

2. YES, THE REMAINING AMOUNT DUE SHOULD BE RECOVERED FROM THE RESPONDENT.
The company had forfeited his shares as per the Art. 42 of Articles of Association due
to non-payment of remaining money and as per the Art. 45, he has to pay to the
company the money owing upon the share at the time of forfeiture.

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THE INDIAN CO-OPERATIVE NAVIGATION AND TRADING CO. LIMITED VS.
PADAMSEY PREMJI

WRITTEN PLEADINGS

ISSUE 1: YES, THERE WAS A BREACH OF CONTRACT BY THE


RESPONDENT PARTY.

1 (A): There was valid proposal, acceptance and agreement

Section 2(a) of Indian Contract Act, 1872 defines proposal as “when one person signifies to
another his willingness to do or to abstain from doing anything, with a view to obtaining the
assent of that other to such act or abstinence, he is said to make a proposal”.1

In the following case the Appellant Company first made an invitation to offer by inviting
application for shares. The respondent made an offer by paying share application money of
Rs. 1500. So, the respondent signified his assent to purchase 600 shares by paying application
money lading to a valid proposal.

Section 2(b) of Indian Contract Act, 1872 defines acceptance as “when the person to whom
the proposal is made signifies his assent thereto, the proposal is said to be accepted.2

The Appellant Company signified its assent thereto by accepting the Respondent’s offer by
allotting him shares.

Section 2(e) of Indian Contract Act, 1872 defines agreement as “Every promise or every set
of promises, forming the consideration for each other, is an agreement.

The application money of Rs, 1500 paid by the Respondent was consideration from his side
and the allotment of 600 shares by the Appellant Company was consideration in return by it.

So, a valid agreement took place between both the parties

1
Indian Contract Act, 1872
2 Indian Contract Act, 1872

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THE INDIAN CO-OPERATIVE NAVIGATION AND TRADING CO. LIMITED VS.
PADAMSEY PREMJI

1 (B): Yes, there was a Valid Contract.

Section 2(h) of Indian Contract Act, 1872 defines Contract as “An agreement enforceable by
law is a contract”.

The agreement between the parties was absolutely valid and was enforceable by law. Thus,
there was a valid contract according to the Indian Contract Act, 1872.

Also, the contract between Appellant Company and the Respondent party met all the
requirements of a valid contract:

 the contract was made by free consent of the parties competent to contract,
 it had a lawful consideration
 it had a lawful object, and
 it is not expressly declared to be void.

Hence, there was a valid contract enforceable by law.

1 (C): Yes, there was a Breach of Contract

Section 73 of Indian Contract Act, 1872 says that “When a contract has been broken, the
party who suffers by such breach is entitled to receive, from the party who has broken the
contract, compensation for any loss or damage caused to him thereby, which naturallyarose in
the usual course of things such breach, or which the parties knew, when they made the
contract, to be likely to result from the breach of it.”3 4

There was a valid contract in the case and it was breached by the Respondent party. It was
clearly mentioned in Art. 42 of the Articles of Association of the Appellant Company that in
case of non-payment of any amount will lead to forfeiture of shares and it was further
mentioned in Art. 45 of Articles of Association of the Appellant Company that the
shareholder whose shares have been forfeited will be liable to pay the remaining amount due
to the Company.

3
Indian Contract Act, 1872
4
K. Narayana Kurup v. Sankaranarayan, AIR 2000 Ker 296

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THE INDIAN CO-OPERATIVE NAVIGATION AND TRADING CO. LIMITED VS.
PADAMSEY PREMJI

ISSUE 2: YES, THE REMAINING AMOUNT MUST BE RECOVERED


FROM THE RESPONDENT PARTY.

According to Sec. 73 of Indian Contract Act, 1872, “When a contract has been broken, the
party who suffers by such breach is entitled to receive, from the party who has broken the
contract, compensation for any loss or damage caused to him thereby, which naturallyarose in
the usual course of things such breach, or which the parties knew, when they made the
contract, to be likely to result from the breach of it.”5 6

So, in this case, there was a valid contract which was by the Respondent party and the
Appellant party is entitled to get compensation.

It is also mentioned in Sec. 74 of Indian Contract Act, 1872 that 7“When a Contract has been
broken, if a sum has been named in the contract as the amount to be paid in case of such
breach, or the contract contains any other stipulation by way of penalty, the party
complaining of the breach is entitled, whether or not actual damage or loss is proved to have
been caused thereby, to receive from the party who has broken the contract reasonable
compensation not exceeding the amount so named or, as the case may be, the penalty
stipulated for.”8

Since, it was clearly mentioned in Art. 45 of the Articles of Association of the Appellant
Company that any shareholder whose share was forfeited was, notwithstanding the forfeiture,
liable to pay to the company “all money owing upon the share at the time of forfeiture”.
Therefore, the due sum of Rs. 4500 should be recovered from the Respondent party and given
to the Appellant Company.

5 Indian Contract Act, 1872


6 K. Narayana Kurup v. Sankaranarayan, AIR 2000 Ker 296.
7
Subs. By Act 6 of 1899, Sec. 4, for the first paragraph.
8
Indian Contract Act, 1872

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THE INDIAN CO-OPERATIVE NAVIGATION AND TRADING CO. LIMITED VS.
PADAMSEY PREMJI

PRAYER FOR RELIEF

Wherefore, in the light of the facts stated, issues raised, arguments advanced and authorities
cited, it is humbly prayed before the Hon’ble High Court of Bombay that it may be pleased to
adjudge and declare that:

1. To adjudge the case in favour of The Indian Co-Operative Navigation and


Training Co. Limited.

2. To order the respondent party to pay the remaining amount due of Rs. 4500.

And/ Or pass any order/ judgement which the Court may deems fit in light of justice, equity
and good conscience.

All of which is most humbly submitted.

Date: 10th OCTOBER, 2014 COUNSEL ON BEHALF OF APPELLANT

ABHIMANYU SINGH RATHORE

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