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TMI Blog1983 (2) TMI 211X X X X Extracts X X X X X X X X Extracts X X X X ..... defence taken up by the respondent company and Bansal is also identical. In the circumstances, since common questions of fact and law arise, I am deciding both these petitions by means of a common judgment. The company has an authorised capital of Rs. 30 lakhs divided into 2,50,000 equity shares of Rs. 10 each and 5,000 redeemable shares of Rs. 100 each. The issued and paid-up capital is Rs. 22 lakhs comprising of 2,20,000 equity shares of Rs. 10 each. Bansal held 13,400 equity shares of Rs. 10 each in the company. The company had allotted one single share certificate No. 11 to Bansal. The distinctive numbers of the shares as shown in the share certificate are 40,901 to 54,300, both inclusive. The shares issued in favour of Bansal were only partly paid up. The case of the petitioner in the Company Petition No. 3 of 1981 was that Bansal transferred 2,500 shares out of said certificate to the petitioners. The case of the petitioners in Company Petition No. 4 of 1981 is that Bansal transferred 2,793 shares in favour of the petitioners out of share certificate issued to Bansal. The total number of shares transferred in favour of the petitioners, therefore, was 5,293. Since the sha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers to the account of Bansal. Learned counsel for the petitioners has urged that the petitioners having submitted the transfer deed along with the share certificate to the company, the company without any justifiable reason has refused to register the shares in favour of the petitioners and, as such, they were entitled to approach this court for rectification of the register of members under section 155 of the Companies Act. Sri B. C. Dey, learned counsel for the respondent company, has, however, urged, firstly, that the application for transfer of shares being not in accordance with section 108 of the Companies Act was not an application in accordance with law and since the provisions of section 108 of the Act are mandatory, the company was justified in refusing to register the shares in favour of the petitioners. Secondly, it has been urged that unless the certificate was split up, the company could not register the shares in favour of the petitioners. Thirdly, it has been urged that the original share applications are with the police department and, as such, the signatures on the transfer deed cannot be verified by the company and, therefore, the shares in any case could not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of shares in, or debentures of, the company, unless a proper instrument of transfer duly stamped and executed by or on behalf of the transferor and by or on behalf of the transferee and specifying the name, address and occupation, if any, of the transferee, has been delivered to the company along with the certificate relating to the shares or debentures, or if no such certificate is in existence, along with the letter of allotment of the shares or debentures." The above clause, therefore, provides that a company shall not register a transfer of shares unless a proper instrument of transfer duly stamped and executed by or on behalf of the transferor has been delivered to the company along with the certificate relating to the shares so sought to be transferred. In the instant case, it is not disputed that the instrument of transfer duly stamped and executed by Bansal had been delivered to the company along with the composite share certificate. The mere fact that the share certificate contained more number of shares than what were transferred in favour of the petitioner by virtue of the transfer deed, cannot take away the effect of the production of the share certificate. If, ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt contemplated that no transfer could be made unless the share certificate was split up, it was not necessary to make any such provision as has been made in section 112 of the Companies Act. In Palmer's Company Law, Volume I, 22nd edition, page 404, it has been observed as under : "If the certificate includes other shares which are not transferred by the instrument of transfer or if the certificate is in respect of shares sold to more than one transferee, the transferor lodges his certificate with the company, and the company's secretary, at the request of the transferor or his broker, certificates the transfer with a statement to the effect that a certificate in respect of the shares in the transfer has been lodged with the company. This process is known as 'certification'." Similarly, in Ramaiya's Guide to the Companies Act, 9th edition, page 288, it has been observed as under : "Where the certificate is lodged with a view to the transfer of part only of the shares comprised therein, the company in due course issues to the transferor a fresh certificate for the balance ; or, according to the practice of some companies, indorses on the deposited certificate particular ..... X X X X Extracts X X X X X X X X Extracts X X X X
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