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Issues: Interpretation of section 19 of the Displaced Persons (Debts Adjustment) Act and its effect on the rights of a shareholder in a company.
Analysis: The case involved a dispute over 1200 shares held by Shiv Ram Batta in a company, where the company claimed the shares were forfeited due to unpaid calls made before August 15, 1947. Shiv Ram Batta sought a declaration that the shares be considered fully paid up under the Displaced Persons (Debts Adjustment) Act. The company contended that Shiv Ram Batta had lost interest in the shares by transferring them before August 15, 1947, and thus could not maintain the application. The Tribunal granted the declaration, which was upheld by Chopra J., stating Shiv Ram Batta should be treated as the holder of the shares under section 19 of the Act. The argument presented was that Shiv Ram Batta had no interest in the shares as he had transferred them for consideration, and subsequently, the shares were forfeited due to unpaid calls. However, the court emphasized that as long as Shiv Ram Batta's name remained on the company's registers, he must be treated as holding the shares, as per the company's articles which stated the registered holder is deemed the absolute owner until the registers are altered. The court rejected the company's appeal, affirming that Shiv Ram Batta met the requirements of section 19 of the Act, which necessitated the call being made by a displaced person in respect of shares held by them on August 15, 1947. The court clarified that the call need not be made on or after August 15, 1947, as long as it pertained to shares held on that date. Therefore, Shiv Ram Batta was entitled to the relief provided by the Act. In conclusion, the court dismissed the appeal, upholding the decision of the single judge, and ordered the appellant to pay costs. Tek Chand J. concurred with the judgment.
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