TMI Blog1966 (4) TMI 41X X X X Extracts X X X X X X X X Extracts X X X X ..... surance Society Ltd. of Calcutta. In the present petition we are not concerned with the 100 shares which belonged to respondent No. 3 apart from the 14,570 shares which are mentioned in Schedule "B" to the petition. The petitioner, Life Insurance Corporation of India, to be hereinafter referred to as the Corporation, came into existence by virtue of the Life Insurance Corporation Act 31 of 1956. Under section 7 of the said Act, the 15,790 shares involved in the present petition and forming a part of the assets appertaining to the controlled business of respondents Nos. 2 and 3 companies became vested in the Corporation. It appears that several attempts were made by the Corporation to get this block of 15,790 shares entered in its name on the register of members of respondent No. 1 company, but the latter refused to do so on one ground or the other. There was considerable correspondence between the Corporation and the respondent No. 1 company in this connection to which it is not necessary to refer. It would appear that some time in July, 1959, respondent No. 1 company even instituted a suit, being Suit No. 894 of 1959 in the High Court of Judicature at Calcutta challenging the vire ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... behalf of respondent No. I company, has made two submissions against this. He contends, in the first instance, that since his client has refused to comply with the request of the Corporation, the proper and only remedy open to the Corporation was to file an appeal under sub-section (3) of section 111 of the Act and that having not been done, it is contended that this petition under section 155 should not be entertained. It may be mentioned that the powers which vested in the Central Government under section 111 of the Act have now come to be vested in the Tribunal by virtue of the provisions of the Companies (Amendment) Act No. 31 of 1965. But Shri Mukherjee contends that in view of the refusal of respondent No. 1 company to comply with the request made by the petitioner and, in view of the prior correspondence between the parties, the proper remedy for the Corporation was to file an appeal under section 111. We are not prepared to accept this argument. It may be pointed out that the petitioner had, in fact, preferred an appeal under section 111 of the Act to the Central Government, but in view of the institution of Suit No. 894 of 1959 by respondent No. 1 company in the Calcutta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respondent No. 1 company because the provisions of section 108 were not followed since there was no proper instrument of transfer duly stamped and executed delivered to the company by the Corporation as provided in sub-section (1) of section 108, and not even an application for transfer, duly stamped, as required by the first proviso to sub-section (1) of the said section. Now we may mention that a similar contention appears to have been raised in the suit filed by respondent No. 1 company which was dismissed for want of prosecution on March 15, 1963. It is true that the dismissal of that suit would not raise any bar against respondent No. 1 company in supporting its refusal on the ground of the alleged non-compliance with the relevant provisions of sec tion 108 of the Act in this petition. But we are not satisfied that in the present case it was necessary for the Corporation either to send along with its letter or application for entering its name on the register of members, with respect to the shares in this petition, a transfer deed executed, attested and stamped, or affixing the necessary stamp on the letter or application itself. As already indicated, there is no dispute that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equisite stamp is necessary. In support of his argument, Shri Andley has relied on a decision of the Orissa High Court, Indian Chemical Products v. State of Orissa [1962] 32 Comp. Cas. 908. That was a case of transmission of title to shares by change of sovereignty as a result of the merger of the State of Mayurbhanj with the State of Orissa, and the Orissa High Court held that it was a peculiar case of transmission by operation of law since by virtue of clause ( i ) of article 5 of the States Merger (Governors Provinces) Order, 1949, certain shares in the Indian Chemical Products purchased by the Maharaja of Mayurbhanj as a Ruler came to be vested in the State of Orissa. It was, therefore, held that the transmission was automatic and required no other formalities to be completed and the company concerned in that case was held bound to recognise it since there was no statutory provision any where for any further steps to be taken to complete the transfer of title to the Government of Orissa. It is true that, in that case, an instrument of transfer was also lodged, but Shri Andley contends that that does not detract from the general principle laid down there regarding a case w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made to the company by the transferee and that application has itself to bear the stamp which would have been required to be affixed on the instrument of transfer. In the second place, it has to be proved to the satisfaction of the board of directors that the original instrument of transfer signed by or on behalf of the transferor and transferee has been lost. And, thirdly, the board of directors may then register the transfer on such terms as to indemnity as it might think proper. In the present case the title to the shares having vested in the Corporation by operation of law by virtue of the provisions of the Life Insurance Corporation Act, we would not be justified in importing the condition as to stamp laid down in the first proviso to sub-section (1) of section 108 into the second proviso. The wording of the second proviso clearly shows that nothing in section 108, which would include sub-section (1) as well as the first proviso to it, shall prejudice any power of the company to register as shareholder any person in whom the right to any shares in the company has been transmitted by operation of law. We do not think that it would be open to respondent No.1 company to refuse to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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