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TMI Blog1956 (9) TMI 34X X X X Extracts X X X X X X X X Extracts X X X X ..... section 19 of the Displaced Persons (Debts Adjustment) Act before the Tribunal at Patiala on December 16, 1952, praying that the forfeiture of his shares be declared to be void and ineffective and the company directed to restore the shares to the respondent and also to pay him all the dividends pertaining thereto. The application was opposed by the company on various grounds, the principal one of which was that the applicant was not entitled to the benefit of section 19 for he had transferred his shares to a third party sometime before the crucial date, viz., August 15, 1947. As regards the 50 shares standing in the name of Shakuntla Devi, the applicant gave up his claim. With respect to thirty others, it was found that they had been transferred to one Rup Narain; the petitioner's claim to that extent was consequently dismissed. In respect of the remaining 1,200 shares, the application was accepted and it was directed that the company shall restore these shares to the applicant after converting them into such smaller number of fully paid-up shares as the company may have issued. It was further declared that the applicant was entitled to all the dividends that might have accru ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntrary contained in the Companies Act, or in the memorandum or articles of association or the Co-operative Societies Act, no interest shall be payable in respect of any such moneys due and the company or the co-operative society, as the case may be, shall not be entitled to forfeit the share or any part thereof, and any forfeiture made before the commencement of this Act in respect of any share in the circumstances specified in this sub-section shall be deemed .to have ceased to be a member of the company or co-operative society merely by reason of such forfeiture. (2) Notwithstanding anything contained in the Companies Act, or in the memorandum or articles of association, or the Co-operative Societies Act, it shall be lawful for a displaced person or a displaced bank to apply to the company or the co-operative society, as the case may be, for the conversion of any partly paid-up share held by him or it in the company or society into such smaller number of fully paid-up shares as the society or company may have issued and in respect of which calls have already been made .. (4) If the company or the co-operative society refuses to comply with any such request as is contained i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would undoubtedly be a call " upon a displaced person," even though the call was made before August 15, 1947. The protection is given because of the assumed inability of the person, on account of the peculiar circumstances, to pay the call-money. There appears to be absolutely no reason why benefit of the provision was not intended to be given to a displaced person in case the call was made after March 1, 1947, but before August 15, 1947. There is all the more reason why it should be so. It is because of the possibility, nay almost certainty, of the call notice having not reached the person at his original address registered with the company. It would be against the very scheme and object of the Act to confine the application of section 19 to calls made after August 15, 1947, and not to extend it to those made prior to that date, but after March 1, 1947. I do not find anything in the sub-section to support the interpretation placed on it by Mr. Tuli. Mr. Batta states that he left Lahore, on account of the civil disturbances, in July, 1947. He first went to Simla and thereafter settled at Nabha. The statement stands unrebutted and the correctness of it is not being challenged. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... chaser. Equity therefore treats the purchaser as if he was the real owner and compels the registered holder to act as the agent of the beneficiary." Mr. Tuli, therefore, contends that Mr. Batta could no longer be regarded as owner of the shares and he cannot be said to be holding those shares on August 15, 1947, so as to entitle him, at least on his own account, to submit an application under section 19 of the Displaced Persons (Debts Adjustment) Act. Consequently, the application of Mr. Batta, brought as it was on his own behalf, ought to have been dismissed. At the outset, it may be observed that the two decisions cited by Mr. Tuli are of no help to the appellant. The dispute here is not between the transferor and the transferee or regarding the liabilities of a trustee towards its cestui que trust. It is correct that as against the transferee the transferor holds the shares as a trustee so long as the transferee's name is not registered as the holder of those shares. As between them, all the incidents that flow from that relationship have to be adhered to. But, for the purposes of the company and its dealings, the transferor continues to be the legal owner of the shares so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e provided, the company shall be entitled to treat the registered holder of any share as the absolute owner thereof and accordingly shall not, except as ordered by a court of competent jurisdiction or as by statute required, be bound to recognize any benami, equitable or other claim to or interest in such share on the part of any other person." Article 43 relates to the transfer of shares and it provides: "The instrument of transfer of any share shall be signed both by the transferor and transferee, and shall contain the name and address both of the transferor and transferee, and the transferor shall be deemed to remain the holder of such share until the name of the transferee is entered in the register in respect thereof." It becomes abundantly clear that so far as the company is concerned, it makes no difference whether the registered member is the beneficial owner of the shares or holds them merely as a trustee for some one else. In his position of a trustee, he may have the right to be indemnified by his cestui que trust against the calls, and he may also be liable to certain duties towards him. But, that is a matter peculiar to the relationship between the transferor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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