9911796707
TMI Blog1997 (6) TMI 369X X X X Extracts X X X X X X X X Extracts X X X X ..... or a direction to register the transmission of the shares in his name, for the reasons stated in the petition. 2. According to the petitioner, his deceased father held 733 shares in the company and by virtue of his being a legal heir sought for registration of transmission of 117 shares (his share in 733 shares), vide his letter dated May 16, 1994, which has been refused by the board as per communication dated July 7, 1994. The grounds of refusal were that the application for transmission should have been accompanied by (a) the original death certificate of the shareholder, (b) original legal heir certificate issued by the competent authorities, (c) consent letter from other legal heirs, (d) order of the competent court granting succes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on a competing business. Now, the petitioner has filed an appeal which is pending and there is no stay of the judgment in O. S. No, 101 of 1993. Therefore, the company has taken the stand that even if the shares are transmitted in the name of the petitioner they would be liable for expropriation as per Article 25/26. Further, according to the company, the board is vested with the powers to require such of the documents as the board desires in considering the transmission and the petitioner has not been able to produce the consent letters. Even the succession certificate granted by the court at Palani is under appeal, which is pending. The petitioner has not produced the original share certificates. Under these circumstances, the action of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the articles. Since the board has already formed an opinion that the petitioner is not a desirable person to be a member in view of his running a competing and rival business, the fact of which has also been confirmed by the judgment in O. S. No. 101 and has also expropriated even the shares held in his own name, the question of registering the transmission of any shares in the name of the petitioner does not arise. Further, even to consider his request, the petitioner has not been able to submit consent letters from other shareholders as well as the original share certificates. According to Shri Datar, relying on Bajaj Auto Ltd. v. N. K. Firodia [1971] 41 Comp Cas 1 AIR 1971 SC 321, Harinagar Sugar Mills Ltd. v. Shyam Sunder Jhunjhunwal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 33 which reads as follows gives powers to the board to call for evidence of title : Article 33.-- Any person becoming entitled to a share in consequence of the death or bankruptcy of any member may upon producing such evidence of title as the directors shall require with the consent of the directors, himself be registered as holder of the share, or subject to the provisions as to transfers herein contained, transfer the same to some other person. 8. As far as Article 34 is concerned, it has no application in the facts of the present case as it deals with the right of a person entitled to a share by transmission to receive dividend, notice, etc. 9. The company has relied on the provisions of Article 33 in seeking various d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deceased. Accordingly, even though the board had the power to call for documents as per Article 33, yet in the instant case, considering the facts and circumstances of the case, we are of the view that the company should have waived the requirement of production of these two documents. 10. As far as the second ground taken by the company is concerned that the petitioner is disqualified to be a member (since he ceased to be a member on expropriation of shares held by him earlier) on account of his running a competing business, even though the respondent has produced various documents to establish this fact of his running a rival business, we do not propose to go into the same for the reasons that the matter is already under appeal. As w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... powers of the board in the case of transmission are limited to the extent of only calling for requisite evidence of title and taking a decision on the same and nothing more. 11. The first two cases cited by Shri Datar relate to transfer of share's and not transmission and as such are not applicable in the facts of the present case. As far as the third case cited by him (Amirthalingam's case [1972] 42 Comp Cas 350 (Mad)) is concerned, it relates to transmission, where refusal to register the transmission on the ground that the petitioner was not a desirable person in view of his acting against the interests of the company, was held to be valid. The articles provided that within 60 days after the receipt of the application, the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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