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TMI Blog1962 (8) TMI 20X X X X Extracts X X X X X X X X Extracts X X X X ..... ter dated February 19, 1958, the company informed the respondents that they could not register the shares in the respondents' names. The respondents appealed under section in 111(3) and (4) of the Companies Act (1 of 1956) to the Central Government against the order of the company refusing to register the shares. The principal ground set out in the memorandum in support of the appeal was that The company had in the first instance effected registration of the transfer and had completed it by endorsing the share certificates in the Joint names of the respondents and also by giving transfer number and Share Holders' Ledger Folio number on January 31, 1958 and the transfer had accordingly become final and conclusive, and it was not open to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsfer in question and the appellants were informed accordingly. The company also contended that the first respondent who was a consumer of electrical energy of the company had between 1932 and 1935 several disputes with the company which did not materialise into any benefit to him. . . . . . About two or three years ago he again became a consumer of the company at Belgaum and he started righting with the company and litigation between him and the company is at present pending before the Supreme Court." It was also submitted by the company that it was apprehended that the first respondent had purchased the shares with "ulterior motive and to unnecessarily create troubles in the general meetings of the company", and that "with a view to safeg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t be registered by it. The authority conferred upon the company by the articles of association is subject to review by the Central Government. This court in Harinagar Sugar Mills Ltd. v. Shyam Sunder Jhunjhunwala AIR. 1961 SC. 1069 ; [1961] 31 Comp. Cas. 387 examined the nature of the jurisdiction exercised by the Central Government and the limits within which the jurisdiction may be so exercised. The court pointed out (at page 1676) that "the proceedings before the Central Government have all the trappings of a judicial tribunal. Pleadings have to be filed, evidence in support of the case of each party has to be furnished and the disputes have to be decided according to law after considering the representations made by the parties." This ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ht to the notice of the directors they declined to register the transfer. They proceeded to submit the reasons which persuaded them to refuse to register the transfers in favour of the respondents. In the view of the Central Government the company had "very little to say in defence of its action" in refusing to register the transfer and that it merely relied upon article 58 of the articles adopted on December 26, 1957, which vested absolute and uncontrolled discretion to decline to register or acknowledge any transfer of shares, that there were in the past several disputes between the company and the first respondent, who is an electrical contractor, and those disputes ended in favour of the first respondent, that in 1955, the first respon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was asserted that the refusal was with a view to safeguard the interest of the company, in the view of the Central Government, having regard to these grounds, the decision of the board of directors was arbitrary and mala fide. This is an appeal with special leave under article 136 of 1he Constitution, and normally the finding of the court or a tribunal against which an appeal is filed, is not exposed to review on matters of appreciation of evidence. The very reasons submitted by the company in its written statement are capable of an inference that the action of the company was "arbitrary and mala fide", and that .inference has been raised by the authority competent in that behalf. The authority hearing the appeal had not overstepped the li ..... X X X X Extracts X X X X X X X X Extracts X X X X
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