TMI Blog1944 (4) TMI 6X X X X Extracts X X X X X X X X Extracts X X X X ..... t point in the case, which is vital, i.e., that the petitioners (respondents)-failed to comply with the requirements of section 34, sub-section (3), Companies Act, which is as follows: "It shall not be lawful for the company to register a transfer of shares in or debentures of the company unless the proper instrument of transfer duly stamped and executed by the transferor and the transferee has been delivered to the company along with the scrip." Then follows a proviso which is not relevant in this case. It is not suggested that a stamped instrument of transfer was in fact ever presented to the company. The learned Judge in Court below deals with this part of the case as follows: "The only other question that remains to be considered is the contention raised by respondent 1 bank that inasmuch as the transfer forms sent by the petitioners along with their shares were not stamped, the petitioners are not entitled to maintain the petition. This is an entirely unmeritorious defence. Fortunately there is no reason why it should prevail, as it is not supported either by authority or principle. It is not disputed that the transfer forms which were sent by the petitioners to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ., and Wasoodew, J., on 17th July 1942. The matter is thus put in the memorandum of appeal: "22. The appellants' counsel having applied to the learned Judge after judgment was reserved but before the day on which it was delivered, to be allowed to call his attention to a judgment of the appellate Court on the same points as were in issue in this suit, but the learned Judge erred in declining to allow him to do so." It seems that unfortunately the learned Judge did not avail himself of the opportunity of considering that case. If he had done so, he would have found that this very point had been decided by the appeal Court in that case. Beaumont, C. J., in his judgment stated as follows: "But the difficulty in the applicant's way is that undoubtedly he did not deliver to the company a duly stamped instrument of transfer. As I have said, what he did was to send an instrument of transfer together with a cheque sufficient to cover the amount of the stamp. Now his case is that the company's practice had been in the past to accept instruments of transfer together with moneys sufficient to pay the stamp duty, the object of that practice being that if the company decided to registe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellants' costs of the petition to be taxed on a long cause scale with two counsel. Kania, J. I agree. This is a petition for rectification of register under section 38, Companies Act. In order to establish a right to get an order under that section the petitioners had to establish that the name of a person was fraudulently or without sufficient cause entered or omitted from the register of the members of the company. The respondents filed the petition under section 38. The reply of the appellant bank was three-fold: one that the directors had absolute power to refuse registration in a particular name under article 36 of the articles of association. Issue 8 covered that point. The second defence was that the appellant company had a lien on the shares held in the name of the registered holder and therefore the bank was not bound to transfer the shares as required. That controversy is covered by issues 4 to 7. The third ground was that no proper transfer form was submitted to the bank and the transfer form was never stamped. This is covered by issues 2 and 3. As regards the question of lien, the petitioners contended that there was no debt at all in respect of which any l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lear binding agreement or statutory obligation there is no reason to assume that the parties must be bound to act on the footing of the previous transaction. It is not even suggested that the petitioners were led to believe that the stamp will be so affixed. It seems to me that the presentation of a duly stamped transfer form is a condition precedent. Section 34(3), Companies Act, makes that step on the part of the applicant imperative. Indeed it says in terms that no company shall transfer shares unless a transfer duly stamped was properly delivered. There is, therefore, no doubt that the tender of such properly executed and stamped transfer is a condition precedent to the right of the applicant to get any relief under section 38. It is not even suggested in the proceedings that steps were taken by the petitioners to do so. Indeed, when the point was specifically raised, in reply, in the affidavit, it was not alleged that the petitioners were in a position straightway to produce such a transfer or had offered such a transfer previously. A belated and feeble attempt to explain the omission is contained in the affidavit, which I have summarised above. In my opinion that affidavit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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