Report No. 86
6.4. Anomaly caused by narrower view.-
It seems to us that the narrower view creates an anomaly, as its effect is practically to favour the smaller shareholder at the expenses of the larger. The fact that a person owns a large share is, under this view, made a disability, precluding him from offering to buy the interest of the party owning the smaller share. As has been observed by the Madras High Court1 (even though it felt constrained to adopt the narrower view on a construction of the section), if A owns 9/10th and B 1/10th of an item, A is under a disability although, if there are two persons, and one is to be favoured, then A would have a much better claim than B.
The Calcutta High Court (though taking.the narrower view) has also observed2 that it was significant that section 3 favoured the smaller shareholder at the expense of the larger. However, it was not for the Court to enter into a discussion as to the reasonableness or otherwise of a "clear and direct" provision made by the legislature by which one particular party is given an advantage over the other.
1. Subbamma v. Veerayya, AIR 1932 Mad 15 (16), bottom (Venkatasubba Rao, J.).
2. Manik La! v. Pulin Behari, AIR 1950 Cal 431, paras. 8 and 13 (R.P. Mookerji, J.).
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