1976 (11) TMI 135 - SUPREME COURT

Whether the provisions of section 108 of the Companies Act, 1956, are mandatory in regard to transfer of shares?

Can a company having been served with notice of attachment of shares register transfer of shares in contravention of the order of attachment?

Held that:- Appeal allowed. The provisions contained in section 108 of the Act are, for the reasons indicated earlier, mandatory. The High Court erred in holding that the provisions are directory. Shares which had not been attached but had been surrendered to the receiver appointed by the Collector of Bombay came from the possession of the receiver in the partnership suit. The receiver in the partnership suit took possession of the shares along with blank transfer forms in the year 1953. When the receiver held the scrips and the transfer forms it was not open to the persons in whose names the shares originally stood to exercise rights of ownership in respect, thereof or to transfer their ownership to anyone else.