Kerala High Court
Canara Bank Ltd. vs T.P.R. Thampi on 2 November, 1971
JUDGMENT E.K. Moidu, J.
1. The point that arises for determination in this civil revision petition is whether the notice issued to a member of a banking company by sending by post to his registered address or to the address which was supplied by him to the company for giving notice to him was not sufficient in the circumstances of the case. One deceased, Thanu Pillai, was a shareholder of the Bank of Kerala Ltd., which was subsequently amalgamated with the plaintiff bank which was then the Canara Bank Ltd. Deceased Thanu Pillai paid the first call of Rs. 500 at the rate of Rs. 50 each for 10 shares and he was to pay the balance of Rs. 500 in respect of such 10 shares. The balance was not paid. So notices had been sent to him why the amount of the shares should not be forfeited. One such notice is marked exhibit P-4 dated July 8, 1964, by which he was called upon to pay the call money on a specified date and on failure of payment he was informed that the share money which he had already paid would be liable to be forfeited. There was no reply. Again another notice was sent on August 20, 1964, exhibit P-5, forfeiting the share money which he had already paid. The suit was instituted for the balance amount of Rs. 500 due to the plaintiff bank at the rate of Rs. 50 for 10 shares.
2. It is now admitted that Thanu Pillai died in December, 1949. It is contended on behalf of the respondents, as the legal representatives for Thanu Pillai, that the forfeiture notice was not valid and that they are not liable to pay any amount to the bank. It is established that exhibits P-4 and P-5 notices had been sent to the address of Thanu Pillai, which was the address registered in the bank's books as it was the address supplied by him to the bank. If such a notice was sent the forfeiture passed against Thanu Pillai is valid. Section 53 of the Companies Act, 1956, provides for sending notices of documents. Sub-section (5) of Section 53 reads as follows :
" (5) A document may be served by the company on the persons entitled to a share in consequence of the death or insolvency of a member by sending it through the post in a prepaid letter addressed to them by name, or by the title of representatives of the deceased, or assignees, of the insolvent, or by any like description, at the address, if any, in India supplied for the purpose by the persons claiming to be so entitled, or until such an address has been so supplied, by serving the document in any manner in which it might have been served if the death or insolvency had not occurred."
3. It is clear from the provisions of the above sub-section that it is the duty of the legal representatives to furnish their address for a notice to be sent and if they failed to send the intimation to the company, the company would serve the document or notice in any manner in which it might have been served if the death of the member did not take place. The lower court did not consider the provisions of Sub-section (5) of Section 53 of the Companies Act in dealing with the question as to the validity of the notice. In this case, the evidence of P.W. 1 as well as exhibits P-4 and P-5 established that notices had been sent to Thanu Pillai to the address which was recorded in the bank's books. Such a notice is valid under law. If there was such a notice it is not open to the respondents to contend that the forfeiture of the payments already made was not in accordance with law. The forfeiture order passed by the bank is valid and correct and it cannot be questioned. The notice, in the circumstances of this case, is sufficient and valid. There is no other contention in the suit excepting the question as to the validity of the notice. Having found that the notice is valid, the plaintiff will be entitled to a decree as prayed for against the assets of deceased Thanu Pillai, if any, in the hands of the defendants.
4. In the result, the revision petition is allowed and the suit is decreed as prayed for against the assets of deceased Thanu Pillai, if any, in the hands of the defendants. The plaintiff bank is now a nationalised bank. So the Canara Bank will be entitled to get the decree as prayed for.