1. ' SAEEDUZZAMAN SIDDIQUI, J.-This appeal under section 3(1) of the Law Reforms (Amendment) Act, 1972, is directed against the order of learned Chief Justice dated 5-11-1980 rejecting the application of the appellant under section 38 of the Companies Act for rectification of the register of a Public Limited Company known as Amin Fabrics Ltd. (respondent No, 1). The appeal is supported by respondents Nos. 1 and 3 while it is opposed by respondent No, 2.
2. ' The facts in the appeal are not much in dispute. Messrs Amin Jute Mills Ltd. (I will hereafter refer Messrs Amin Jute Mills Ltd., as "Amin Jute" in this order, which was a public Limited Company incorporated under laws of Pakistan had its registered office in the former territory of East Pakistan (now Bangladesh). Amin Jute held 1,77,471 shares of the nominal value of Rs, 10 each in the sister concern known as Messrs Amin Fabric Ltd. (respondent No, 1) which is also a public Limited Company incorporated under the laws of Pakistan and has its registered office in the territory now called Pakistan. Amin Jute in its 17th annual general meeting held on 31-12-1970 declared dividends for the period ending 30-6.4970 which consisted of 10% cash and Rs, 16,15,896 in the form of fully paid-up shares of respondent No, 1 in the ratio of 1 share of respondent No, 1 against 20 shares of Amin Jute. The appellant who bolds 64 shares of Amin Jute approached respondent No, 1 for issue or 3 and shares of respondent No, 1 for his 64 shares in accordance with resolution of Amin Jute passed in the 17th annual general meeting and enter his name in the register of respondent No, 1 as holder of 3 and 1/3 shares of the value of Rs, 10 each. It appears that respondent No, 1, took no action on the request of appellant as in the meantime Abandoned Properties (Management) Act, 1975, was promulgated which provided for vesting of all abandoned properties in the Federal Government on and from 16-12-1971. The appellant in these circumstances filed J. M. 25 of 1976 on or about 6-5-1975 before the Company Judge and prayed for rectification of share register of respondent No, 1 by entering the name of the appellant as holder of 3 and 1/3 portion of one share of respondent No, 1 in the share register in place of Amin Jute and issue of share certificate to the appellant accordingly. The petition under section 38 of the Companies Act was opposed by respondent No, 2 on the ground that the unpaid dividends reverted back to Amin Jute and since Amin Jute fell within the definition of 'specified person' the unpaid dividend became 'abandoned property' and consequently vested with the Federal Government. The learned Company Judge agreed with the contention of respondent No, 2 and held that unpaid dividend in the form of shares of respondent No, 1 is an "abandoned property" and therefore the appropriate remedy for the appellant was to seek redress under section 15 of the Act. The reasons for holding the shares of respondent No, 1 as an abandoned property in the words of learned Chief Justice are as follows:- "It would thus seem that, until the actual payment of the dividend, or, transfer of the interest, such money of the dividend, or, interest is to be treated as debt owing to the shareholder, but being held by the Company that declares the dividend. In the present case, also, since admittedly the share certificates of Amin Fabrics Ltd., had not been delivered to the petitioners their interest or dividend cannot but be considered as a debt .Which Amin Jute Mills Ltd. Has to pay to the petitioners. That being so, the Administrator appeared to be justified in taking the action, which is impugned in this petition."
3. ' It would appear from the above-quoted passage from the order of learned Chief Justice that the reasons which mainly prevailed to hold the shares as "abandoned property" was that they were not issued to the shareholders of Amin Jute, in pursuance of the resolution of the 17th annual general meeting. The learned Chief Justice has also referred to the various provisions of the article of Association of respondent No, 1 dealing with the procedure for transfer of the shares in repelling the contention of the petitioner before him but in our humble view this point was not germane to the decision of the controversy raised in the case. The respondent No, 1 was admittedly not disputing the entitlement of the petitioner and others to the shares certificates of respondent No, 1 as shareholders of Amin Jute but they were reluctant to give effect to the decision of the 17th annual general meeting of Amin Jute to save themselves from the peril arising out of such action under the provisions of Abandoned Properties (Amendment) Act (XX of 1975). We will, therefore, here examine whether the dividend declared by Amin Jute in its 17th Annual General Meeting, deciding to issue the shares of respondent No, 1 in lieu of dividend declared, could be treated as an "abandoned property" within the meaning of the Act XX of 1975. For this purpose it is necessary here to examine in detail the definition of "Abandoned Property" as given in the Act XX of 1975, which is as follows: - "(a) 'abandoned property' means any property, movable or immovable (including share in industrial units and firms, investments, deposits, policies of insurance and all other interests and rights in or to or arising out of any such property), belonging to a "specified person" and includes any such property sold or transferred to, or placed under the suspension or control of, any other person on or after the sixteenth day of December, 1971, but does not include any ornaments or wearing apparel or ability to be a member of a group, circle, or society (4) to be an attribute, part, adjunct or function (of a person or thing) (5) chiefly South & Midland; to become accustomed ; (6) to be properly classified."
4. ' This word is also defined in the Concise Oxford Dictionary, New Edition as follows:- "1. Be rightly assigned to (as duty, right, possession, natural or usual accompaniment, example in classification, characteristic, part, member, inhabitant, appendage) ; belong to, be member of club, household, grade of or any cooking vessels or other household effects in the immediate possession of a specified person, not exceeding a total of rupees one thousand;"
5. After carefully examining the above definition we are of the view that the words 'belonging to a specified person' used in the definition of "Abandoned Property" are of great significance and import and in order to hold a property as "abandoned property" it must be shown that property belonged to a specified person. The word "belong" has been defined in the Webster's Third International Dictionary as follows:- AO to be suitable, appropriate, or advantageous (for a person or thing) (b) to be in a proper, rightful or fitting place, situation, or connection
(2) archaic: to have relation or reference (to a person or thing) (3) a to be the property of a person or thing b : to become attached or bound (as to a person, group, or organization) by birth, allegiance, residence, or dependency c. (1) : to be a member of a club or similar association (2) to have this social qualifications society, etc.
2. Be resident in or connected with 3. Be rightly placed or classified (in, under, etc.); fit a specified environment etc. (ME, app. An intensive, f. BE-2, of ME longen belong f. OE langian (gelang at hand)"
6. ' After considering the definition of word "belong" as given in the Dictionary we are of the view that the expression "belonging to a specified person" has been used in the definition of "abandoned property" as meaning thereby that the property was owned by a specified person. We are, therefore, of the opinion that in order to treat a property as "abandoned property" such property must have been, owned by a "specified person". It now remains to be seen whether the dividend declared by Amin Jute in its 17th Annual General Meeting could be treated as property belonging to Amin Jute. It is settled law that once a dividend is declared by a Company it becomes payable as a debt to the shareholders and the shareholders can sue the company for its recovery. The learned Chief Justice also reached the same conclusion in the order as would appear from the passage which we have reproduced in the earlier part of this judgment; but he was of the view that since it has not been issued until the Act XX of 1975 was enforced, therefore, it became an "abandoned property". With utmost respect to the learned Chief Justice we are unable to agree with his conclusion that because the dividend which was declared by the company was not paid to the shareholders it became an "abandoned property" within the meaning of Act XX of 1975. We have already reached the conclusion that in order to hold a property attribute of being in the ownership of a specified person. In our view a debt due to a shareholder in the hands of the company cannot be treated as property (sic) belonging to the company. A debt in the hand of a debtor does not belong to the debtor but it belongs to the person to whom it is payable. A debt is something which is owned by one person to another. It is an obligation and liability to pay or return something. In this view of the matter the dividend declared by Amin Jute which, though not paid to the shareholders, could not be said to be the property of Amin Jute as it was admittedly a debt due to its shareholders. The mere fact that the dividend declared by Amin Jute was still in its hands could not make it a property of the Amin Jute. We are therefore clear in our mind that although the dividend declared in the 17th Annual General Meeting of Amin Jute held on 31-12-1970 in the form of fully paid up shares of respondent No, I were not issued to its shareholders until enforcement of Act XX of 1975 but these unissued shares could not be treated as the property belonging to a specified person so as to make them 'abandoned property' within the meaning of Act XX of 1975. The property in these shares passed on to the shareholders of company as soon as Amin Jute in its 17th Annual General meeting adopted the resolution declaring the dividend and deciding to issue these shares in lieu of the dividend declared by it. Since the dividend declared by the Amin Jute in its 17th Annual General Meeting was not an 'abandoned property' within the meaning of section 2(a) of Act XX of 1975 it was not at all necessary for the petitioner and other shareholders of company to have recourse to the proceeding under the provisions of Act XX of 1975 for confirmation of transfer of shares which they were entitled to receive as dividend declared by Amin Jute in its 17th Annual General Meeting held on 31-12-1970.
7. ' We accordingly accept the appeal, set aside the order dated 5-11-1980 and direct respondent No, 1 to issue share certificate to the petitioner in accordance with the resolution of the 17th Annual General Meeting of Amin Jute and correct the register of shares maintained by them accordingly.
8. We will, however, make no order as to costs.
9. Accordingly accepted.