http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 2  

CASE NO.: Appeal (civil)  5929 of 2005

PETITIONER: PEERLESS GENERAL FINANCE & INVESTMENT CO. LTD

RESPONDENT: PODDAR PROJECTS LTD. & ANR

DATE OF JUDGMENT: 13/02/2007

BENCH: Tarun Chatterjee & Altamas Kabir

JUDGMENT: J U D G M E N T

ALTAMAS KABIR, J.

       Certain shares of the appellant-company were being held  by Poddar Udyog Limited.  Under a scheme of arrangement  sanctioned by the Calcutta  High Court  on 19th August, 1997,   a part of the  business division of  Poddar Udyog Limited was  transferred to the respondent No.1 herein.   On 3rd September,   1999, the respondent  No.1,  Poddar Projects Limited, sold the  shares to the respondent No.2, Vijaya Finance Corporation  Limited.  The said respondent lodged the shares with the  appellant-company herein for registration on 12th November,  2001.  The appellant-company refused to register the said  shares on 9th January, 2002 and intimated the advocate for  the respondent No.2 of its said decision.         On 16th May, 2002, the shares were again lodged for  registration on behalf of the respondent No.1-Poddar Projects  Limited, but once again the appellant-company refused to  register the same.         Such refusal  led to the filing of an application by the  respondents herein under Section 111 A of the Companies Act,  1956 on 28th October, 2002.  The Company Law Board allowed  the application filed  by the respondent No.1 herein by  directing the appellant-company to register the  original  shares in favour  of   the respondent No.1, but declined to  grant any relief to the respondent No.2.  The respondent No.2  accepted the order and did not prefer any appeal.  The  appellant-company being dissatisfied with the decision of the  Company Law Board filed an appeal before the Calcutta High  Court under Section 10F of the Companies Act,1956.   Before  the Calcutta High Court, it was submitted     on behalf of the  appellant-company that since no transfer deed was  delivered  in terms of  Section 108 (1A) of the Companies Act, the   lodgment for registration was itself  defective and could not,  therefore, be acted upon.   It was further submitted that till  such time as the shares were not registered in favour of the  respondent No.1-company, the same could not be registered in  the name of the subsequent transferee, namely, the  respondent No.2 herein.  Certain other objections were also  taken regarding cancellation of stamps and the fact that the  transferee was not a desirable person.         The Calcutta High Court negated the submissions made  on behalf of the appellant-company and affirmed those of the  Company Law Board.  It is against the said order of the  Calcutta High Court that the instant appeal has been filed.         Although, in the appeal a question was raised as to  whether for registration of transfer of shares effected under a

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 2  

scheme of arrangement or compromise or  amalgamation  sanctioned by  a competent court under Sections 391 and 394  of the Companies Act, it is necessary to execute a further  instrument of transfer as contemplated by Section 108 of the  said Act, at the time of the hearing of the appeal, it  was  submitted on behalf of the appellant-company that the said   question had been rendered academic.  It was submitted that  during the pendency of the appeal, the appellant-company had  complied  with the direction of the Calcutta High Court and  had registered the original shares in the name of the  respondent No.1-compnay.  Since the respondent No.2 had  not preferred any appeal against the order of the Company  Law Board, the same became final as far as the respondent  No.2 is concerned.  Although, on behalf of respondent No.2, it  was submitted that the decision of the Company Law Board,  as applicable to the respondent No.1, would also operate in its  favour, such a submission is not acceptable since the  respondent No.2  stands on a different footing.  Till such time  as the shares were not registered in the name of the  respondent No.1, the application of the respondent No.2 for   subsequent registration of the same shares in its name could  not be considered.  Accordingly, the direction given by the  Company Law Board in respect of the respondent No.1 could  not apply to the respondent No.2 and that is why the said  respondent No.2  did not prefer any separate appeal  against  the order of the Company Law Board.         As pointed out by Mr. Ashok Desai, learned senior  counsel, appearing  on behalf  of the appellant-company, the  questions raised in the appeal  have been rendered academic  having regard to the fact that  the appellant-company has  since  registered the shares in question in the name of the  respondent No.1-company.         The appeal is, therefore, disposed of as having become  infructuous and the questions raised therein are left open for  decision in an appropriate case.         There will be no order as to costs.