G R PARRY Vs. UNION OF INDIA

JUDGEMENT

(1.) THESE are two cross appeals (Letters Patent Appeals Nos. 56 and 58 of 1957) arising out of an order made by Chopra J. on an application made by the Union of India for the rectification of the register of members of the Kulu Valley Transport Company. The application was in respect of eight shares of which four were held by Ram Dial (Nos. 39 to 42), two were held by Gurdial (Nos, 14 and 43) and the remaining two by Vidya Vati wife of Ram Dial (Nos. 44 and 45 ). The four shares held by Ram Dial had been previously pledged with Mrs. Parry. The Kulu Valley Transport Company began to fare badly in 1952 and an offer for the sale of these shares was made to the Union of India in the Railway Department. The offer was made by means of three letters, Exhibits P. 2, P. 3 and P. 4, signed, respectively, by Ram Dial, Gurdial and Vidya Vati, The letters were all in identical terms and the text has been reproduced in the judgment of the learned Single Judge. The offer for sale was unconditional, and the shareholders offered to receive whatever price was considered just and proper by the Railway Department. No reply or a formal acceptance to these letters was sent, but it seems to have been understood) by all parties that the shares were, in fact, transferred to the Railway Department. The letters were accompanied by blank transfer-deeds and by the scrips of six shares. The scrips of the shares of Gurdial and Vidya Vati accompanied their respective letters, but of the four shares of Ram Dial, the scrips of only two were submitted. The scrips of the remaining two (Nos. 39 and 40) were with the pledgee, Mrs, Parry. Nearly a year elapsed, and then Gurdial and Vidya Vati began to make claims for the price of these shares. They claimed that a sum of Rs. 8,000/-was due to each of them on account of the price of the four shares which had been transferred by both of them. It may be mentioned here that the face value of each share of the Kulu Valley Transport Company was Rs. 4,000/ -. It may also be mentioned here that Ram Dial had previously offered to receive 10 per cent of the face value of his own shares and also of the shares held by the members of his family.

(2.) THE Union of India treated these transactions as complete transfer of the shares and made an application for the rectification of the register of members of the Company. The learned Judge allowed the application in so far as it related to the two shares of Ram Dial of which he had sent scrips along with the transfer-deeds, but dismissed the application in respect of the remaining six shares. In coming to this conclusion he held that there was no completed transaction of sale effected by Gurdial and Vidya Vati. He also came to the conclusion that the transfer-deeds bore stamps which had not been cancelled at the time of their execution and, therefore, the transfer-deeds must be treated as unstamped, and since an unstamped transfer-deed could not be made the basis of a genuine transfer, the transfers by Gurdial and Vidya Vati must be treated as Incomplete. With regard to the two shares which were held by Mrs. Parry, the learned Judge took the view that since no share-scrips were handed over along with the transfer-deeds, the transfer could not be said to have been complete within the meaning of the Indian Companies Act.

(3.) AGAINST this decision two cross appeals have been preferred under Clause 10 of the Letters Patent. The appeal of Mrs. Parry in respect of the two shares held by her may be disposed of in a few words. Ram Dial made an unconditional offer of transfer on the 29th of December 1952. He handed over the scrips of the two shares held by him to the Railway Department and later agreed to ac- cept 10 per cent of the face value of these shares. The fact that these shares were pledged with Mrs. Parry does not affect the transfer, because the pledge may well have been redeemed, and since the scrips were in possession of Ram Dial and were handed over along with the transfer certificates, the transfer must be held to have been completed.