RELIANCE TEXTILE INDUSTRIES LTD. Vs. STATE

JUDGEMENT

(1.) THE applicant company has taken out this summons for direction as to whether the applicant company should recognise the transfer of various shares of Siddhpur Mills Co. Ltd. as particularly described in the schedule annexed as annexure 'B' to the affidavit in support of the judge's summons, and for other consequential reliefs. It should be recalled that directions have been sought by the applicant company in respect of about 1,421 transfer applications by different parties seeking to transfer in all 7,396 shares of Siddhpur Mills Co. Ltd.

(2.) BY the order of this court of July 30, 1982, the official liquidator was directed to submit his report stating his recommendations with reasons in support thereof in respect of each such impugned transaction after inquiring as specified in the directions issued by the aforesaid order. Accordingly, the official liquidator has submitted his report on May 16, 1983. The official liquidator has, in this report, raised objection only in respect of four transfer applications each of which is dated March 22, 1982, in favour of four investment companies viz., (1) Harit Investment Co. P. Ltd., (2) Haren Investment Co. (P.) Ltd., (3) Krishna Kumar Investment Co. Pvt. Ltd., and (4) Gokulesh Investment Co. (P.) Ltd., for 1,000 shares each. As regards the other transfer applications, the official liquidator has not raised any objection and has not sought to impugn the said transactions. In this state of affairs, by the order of this court of September 21, 1984, the applicant company was permitted to register the transfers according to the transfer applications other than the aforesaid four impugned transfers as prescribed in annexure 'B' to the affidavit in support of the summons.

(3.) SHORTLY stated, the objections which have been raised by the official liquidator are as under : Firstly, it has been contended that the impugned transfers were not effected before the specified date, that is, July 1, 1981, on which date the scheme came into operation. Secondly, the share certificate were not surrendered at all the relevant times. In other words, the share certificate were not surrendered before the aforesaid date. Thirdly, the transfers were effected with the ulterior motive to save the transferor company from the liability to capital gains tax and also with a view to save the stamp fees which the transferor company would ordinarily be required to pay on the transfers effected otherwise than in pursuance of the scheme of amalgamation. Fourthly, the transferee companies had made necessary applications as required under section 536 of the companies Act, 1956.