Case Note & Summary
The dispute arose from the refusal of the appellant-company to register shares held by Poddar Udyog Limited, which were sold to Poddar Projects Limited and subsequently lodged for registration. The shares were initially lodged for registration on 12th November, 2001, but the appellant refused to register them on 9th January, 2002, and again on 16th May, 2002. This led the respondents to file an application under Section 111A of the Companies Act, 1956, which was allowed by the Company Law Board, directing the appellant to register the shares in favor of Poddar Projects Limited. The appellant then appealed to the Calcutta High Court, arguing that the lodgment was defective due to the absence of a transfer deed as required by Section 108(1A). The High Court upheld the Company Law Board's decision. During the Supreme Court appeal, the appellant indicated that it had complied with the High Court's order by registering the shares in the name of Poddar Projects Limited, rendering the appeal academic. The court noted that since the respondent No.2 had not appealed the Company Law Board's decision, it could not claim rights to the shares until they were registered in the name of Poddar Projects Limited. Consequently, the Supreme Court dismissed the appeal as infructuous, leaving the legal questions raised open for future cases. No costs were awarded.
Headnote
A) Company Law - Share Registration - Necessity of Transfer Deed - Companies Act, 1956, Sections 108, 111A - The court considered whether a further instrument of transfer was required for shares transferred under a scheme of arrangement. It was held that since the appellant-company had registered the shares in the name of the respondent No.1, the appeal became infructuous and the question was left open for future consideration (Paras 1-2).
Issue of Consideration
Whether a further instrument of transfer is necessary for registration of shares transferred under a scheme of arrangement sanctioned by a competent court.
Final Decision
The Supreme Court dismissed the appeal as infructuous, noting that the appellant had registered the shares in the name of the respondent No.1, and left the questions raised open for future consideration.
Law Points
- Companies Act
- 1956
- Section 111A
- Section 10F
- Section 108
