TMI Blog1961 (4) TMI 47X X X X Extracts X X X X X X X X Extracts X X X X ..... given to these forms. This contention of learned advocate for the company, therefore, does not appear to me to be reasonable. The next contention is that unless a person is a member of a company, he cannot make an application under section 155 of the Companies Act, 1956. His remedies are under section 111 and he may prefer an appeal to the Central Government as provided by sub-section (3) of that section. This argument is obviously untenable as section 155 clearly provides that if default is made or unnecessary delay takes place in entering on the register, the fact of any person having become a member, the person aggrieved may apply to the court for rectification of the register. In Sadaskiv Skankar Dandige v. Gandhi Sewa Samaj Ltd. [1958] 28 Comp. Cas. 137 , it is observed that section 155 is the controlling section and gives the court an overriding power notwithstanding any previous order of the Central Government. It would be meaningless to give the court a general power to decide any question including any question relating to the title of a person as is given by section 155(3) and then indirectly cut off that power by giving the Central Government the same power to dec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etitioner, has submitted that section 12, 35 or 63 of the Stamp Act has no relevance whatsoever in considering whether an instrument has been "duly stamped" for purposes of section 108 of the Companies Act, 1956. All that the court has to see is whether stamps of the proper amount have been affixed to the instrument of transfer. If an adhesive stamp affixed to an instrument is not cancelled in accordance with the provisions of section 12(1) ( a ) or ( b ) of the Stamp Act it is deemed to be unstamped for the purpose of attracting the consequences specified in sections 35 and 63 of that Act only. Mr. Chaudhuri has placed reliance on section 47 of the Act which is as follows: "47. When any bill of exchange or promissory note chargeable with the duty of one anna is presented for payment unstamped, the person to whom it is so presented may affix thereto the necessary adhesive stamp, and, upon cancelling the same in manner hereinbefore provided, may pay the sum payable upon such bill or note, and may charge the duty against the person who ought to have paid the same, or deduct it from the sum payable as aforesaid, and such bill or note shall, so far as respects the duty, be deemed g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble on such documents is one half of the duty payable on a conveyance (No. 23) for a consideration equal to the value of the share. According to Mr. Chaudhuri until a resolution is passed by the board of directors of the company approving of the transfer no right or liability is created or extinguished. It is only when such a resolution is passed that the stamp is to be cancelled. Under section 111(1) of the Companies Act, 1956, nothing in sections 108, 109 and no shall prejudice any power of the company under its articles to refuse to register the transfer of any share in the company. Under regulation 19(1) (2) of Table "A" in Schedule I the transferor shall be deemed to remain a holder of the share until the name of the transferee is entered in the register of members in respect thereof. Under regulation 21 the board may subject to the right of appeal conferred by section in, decline to register ( a ) the transfer of a share, not being fully paid share, to a person of whom they do not approve; or ( b ) any transfer of shares on which the company has a lien. Under regulation 22 the board may also decline to recognise any instrument of transfer unless ( a ) a fee of Rs. 2 is paid t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dhuri seeks to draw support from the terms of this notification in favour of his argument that it is the duty of the company and not of the transferor or the transferee to cancel the stamps in the manner indicated in the notification at the time of registration of the deed of transfer. Learned counsel relies on the case of In re Copal Varnish Co. Ltd. [1917] 2 Ch. 349 for the proposition that an instrument of transfer has no legal effect till the consent of the directors is obtained and registration is effected. On this point also I am unable to agree with Mr. Chaudhuri. Section 2(14) of the Indian Stamp Act merely states that an instrument includes every document by which any right or liability is, or purports to be, created, transferred, limited, extended, extinguished or recorded. The definition is extensive and is not restricted to the kinds of documents specifically referred to. An "instrument" is a writing and generally imports a document of a formal legal kind: vide Stroud's Judicial Dictionary, 3rd edition, Volume 2, page 1472. It cannot be said, therefore, that an instrument of transfer of shares is not an "instrument" within the meaning of section 2(14) of the Ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... may refer to Union of India v. Kulu Valley Transport Ltd. [1958] 28 Comp. Cas. 29. It was held, inter alia , by the Punjab High Court that, where the adhesive stamps on the transfer deeds executed by the transferors Were not cancelled, the document should be regarded as unstamped ; and to order rectification of the register of members in a case where there is no duly stamped transfer deed, would amount to ordering the company to act in contravention of section 108(1) of the Companies Act, 1956. For reasons aforesaid, I am of opinion that the company in the present case was justified in refusing registration of the shares concerned. In the result, therefore, this application is dismissed. I make no order as to costs since I find from the correspondence that passed between the parties that the company raised various objections to registration but never wrote to the petitioner that the stamps had not been cancelled. It is stated in paragraph 8 of the affidavit-in-opposition being the affidavit of Kalipada Sen affirmed on November 8, 1960, that this defect was pointed out when the original deeds were delivered to the company; but I am told that the company accepted the re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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