9911796707
TMI Blog1993 (11) TMI 246X X X X Extracts X X X X X X X X Extracts X X X X ..... ry 8, 1990, the company received an application for transfer of 50 equity shares owned by the petitioner along with an instrument of transfer executed on January 23, 1990, Since the signatures of the petitioner tallied with the specimen signatures available in the records, the transfer of the 50 shares was registered in the books of the company on February 24, 1990, Thereafter, on March 8, 1990, the petitioner instructed the company to stop all transfers of shares registered in his name since he has reported that his share certificates have been lost along with transfer deeds. He also made available to the company on March 16, 1990, a copy of an FIR dated March 14, 1990, regarding the loss of the share certificates. The company by a letter dated March 10, 1990, had intimated that 50 shares of the petitioner have been already transferred in favour of Shri R. K. Malhotra and a photocopy of the transfer deed was also sent by the company to the petitioner, in this connection. 3. It is the contention of the petitioner that : (a) the company has registered the transfer in spite of intimation from the petitioner regarding change in the specimen signature well before the transfer was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Companies Act are mandatory and have to be complied with. Non-compliance with Section 108 makes the registration null and void. In this connection, he cited the decision of the Supreme Court in Mannalal Khetan v. Kedarnath Khetan [1977] 47 Comp Cas 185. He also cited the case of Nuddea Tea Co. Ltd. v. Asok Kumar Saha [1988] 64 Comp Cas 775 (Cal) to state that an instrument though bearing adhesive stamps but not cancelled in the manner as contemplated in the Indian Stamp Act, 1899, cannot be said to be duly stamped. In such cases the only remedy is to submit a fresh instrument duly executed and stamped. He also submitted the judgment of Shri P. B. Menon, Member, Company Law Board in Tara Prasad Chakravarti v. Orissa Textile Mills Ltd. (Appeal No. 6 of 1970) in support of his contention. 7. Shri Mahesh Arora, secretary of the company, submitted that while considering the registration of the transfer on February 24, 1990, the company had no intimation about the loss of the share certificates. The only intimation was to change the specimen signature and that too was received on February 11, 1990, while the transfer deed for the 50 shares was already executed on January 23,19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... should have put him to strict proof. On the other-hand, the petitioner declined to avail of the opportunity to implead the transferee as a party. The company is not expected to suspect the genuineness of the transaction merely on the ground of a shareholder seeking to change his specimen signatures. By the time the company was cautioned about the loss of share certificate the registration of the transfer has been already done. Yet the company attempted to verify the genuineness of the transaction from the transferee who has confirmed that he has obtained the shares through a proper deal. The allegation of the petitioner regarding the genuineness of the letter dated March 24, 1990, from the company to the transferee wherein it is purported to be stated that the registration is kept pending, is also without any substance. The petitioner has filed a plain copy of the alleged letter dated March 24, 1990, without any authenticity whereas the company has filed a duly certified file copy with the proper reference number (which appears to be the practice in all the company's correspondence) wherein there is no reference to the company keeping the registration of the shares pending. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar as such stamp is concerned, be deemed to be unstamped. (3) The person required by Sub-section (1) to cancel an adhesive stamp may cancel it by writing on or across the stamp his name or initials, or the name or initials of his firm with the true date of his so writing, or in any other effectual manner. 10. The objective of the section is evident from the words cancel the same so that it cannot be used again , which indicates that the purpose is to ensure that the stamps are not reused. According to the company, this has been ensured with the cancellation of the stamps. Ultimately, when the board considered the transfer deed it has been duly stamped and as such the requirement of law is fulfilled. 11. As regards the cases cited by both the parties decided by the Company Law Board, in the case cited by the petitioner, namely, Appeal No. 6 of 1970, the transfer deed did bear adhesive stamps but they had not been cancelled and the company contended that the instruments were not duly stamped. In the case before us the stamps have been cancelled when the board considered the transfer and hence the two situations are not comparable. In the other case cited by the responden ..... X X X X Extracts X X X X X X X X Extracts X X X X
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