This appeal raises an interesting question on the law of limitation as to which, so far as we are aware, there is as yet no authority in India, namely, as to the period of limitation for a suit by a share-bolder against a registered company to recover dividends. In England, it is well settled that a dividend is a specialty debt for which a period of twenty years is allowed by 3 and 4 William IV, C. 42 Sect. 3. This was first pointed out by Lord Justice Christian in Smith v. The Cork and Bandon Ry. Co.(1), which has been followed in later cases and in England in In re Artisans' Land and Mortgage Corporation(2).
In India, we have to look to the provisions of our Limitation Act. The right to receive a dividend which has been duly declared is one of the rights of every shareholder by virtue of the contract which he is deemed to have entered into with all the members of the company under Sect. 39 of the Indian Companies Act, 1882. The terms of that contract are to be found in the memorandum of association, and in the special articles of association if any, and if there are no special articles of association and is so far as they are not inconsistent with them, then in the Table A which is appended to the Act. Prima facie the provisions of Arts. 72 to 76 in Table A which deal with the declaration and payment of dividends, are applicable and form the contract under which dividends are payable. Now, the memorandum of association is required by law to be registered, and the articles in Table A, in so far as they are applicable, are by Sect. 38 of the Companies Act to be deemed to be the rugulations of the company, in the same manner and to the same extent and as if they had been inserted in the articles of association, so that by virtue of Sect. 38 the debt here must be deemed to have arisen from a memorandum and articles of association duly registered under the Companies Act,
Now, Art. 115 of the Limitation Act is ‘for compensation for the breach of any contract, express or implied, not in writing registered and not herein specially provided for.’ There is no Special article for the recovery of dividends, and therefore Art. 115 will apply unless Art. 116 is applicable. Article 116 is ‘for compensation for the breach of a contract in writing registered,” and it is now settled that that means, ‘for breach of any contract in writing registered.’ ‘Registered’ in the Limitation Act, must be read as defined in the General Clauses Act of 1897. Sect. 3, cl. 45 of that Act says “registered” used with reference to a document, shall mean “registered in British India under the law for the time being in force for the registration of documents.” It has been contended for the appellant that the ‘law for the time being in force for the registration of documents’ must mean the Indian Registration Act for the time being. That, however, appears to us to be unduly restricting the meaning of that clause. The Companies Act provides for the registration of the memorandum and the articles of association, which are documents, and there may be other may be statutes such as the Copyright Acts, which provide for the registration of other documents. There is, we think, no reason why the term registered within the meaning of the General Clauses Act should not include documents registered under any special law of that kind as well as registration under the Indian Registration Act. We are therefore of opinion that the present suit is for compensation for the breach of a contract in writing registered, and that the period of limitation therefore under Art. 116 is six years and the suit is not barred. The other contentions of the appellant also fail.
In the result, the appeal fails and is dismissed with costs.
C. K.Appeal dismissed.