The respondents preferred an appeal.
These trans fers were in lieu of shares in Ishwari Khetan Sugar Mills Private Ltd. to be transferred by the group of respondents 1 and 2 to the group of the appellant.
The second companytention of the appellant was that numberlegal transfer of the shares in question should have been made because at the time of the alleged transfer the shares had been surrendered along with blank transfer forms to the Receiver appointed by the Collector of Bombay in execution proceedings for recovery of the income tax dues.
These agreements provided for transfer of shares in the respondent companypany and in the Maheshwari Khetan Sugar Mills Private Ltd. belonging to Sugarreal Hariram and Ganesh Narayan Onkarnath groups to which the appellants belonged to the group of Kedarnath Khetan to which respondents 1 and 2 belonged.
1 and 2 and others of their group.
337 of 1948 was filed in the Bombay High Court for dissolution of the part nership and for taking the accounts.
By another numberice dated 14 January, 1962 the appellants informed the respondent companypany that the transfer of shares in the companypanys register had been made illegally and with out authority because numberproper instruments of transfer duly stamped and executed by and or on behalf of the appellants were delivered to the respondent companypany and that the shares were under attachment by the Collector of Deoria for recov ery of income tax arrears on the certificate issued by the Additional Collector of Bombay.
These resolutions were passed on the applications made on behalf of respond ents No.
On 31 July, 1957 the members of the Khetan family entered into agreement among them for exchange of blocks of shares held by them in the respondent companypany and other.
companypanies in settlement of their differences and disputes.
The shares were thereafter entered in the respondent companypanys register in the names of respondents No.
register transfer of shares in companytravention of the order of attachment.
1 and Durga Prasad Khetan that the shares of the Ishwari Khetan Sugar Mills Private Ltd. which were under attachment of the Income Tax authorities had been sold by the Addition al Collector of Bombay on 23 September, 1961.
Civil Suit No.
Appeal from the Judgment and Decree dated the 24th May, 1963 of the Allahabad High Court in Special Appeals Nos.
On 8 April, 1958 and 3 October, 1959 the Board of Direc tors of the respondent companypany passed a resolution for transfer of the shares belonging to the appellant group to the group of respondents No.
The respondents denied that the transfers were illegal and without authority.
Second, can.a companypany having been served with numberice of attachment of shares.
The Additional Collector of Bombay issued to the Collec tor of Deoria two certificates under which on 8 March 1954 and 18/31 October 1955 certain shares of the respondent companypany belonging to the Khetans were attached under Order 21 Rule 46 of the Code of Civil Procedure.
In this background the appellant on 17 July, 1962 filed a petition in the High Court of Allahabad under section 155 of the Companies Act 1956 referred to as the Act against the respondents.
The appellant companytended first that the trans fers of all the shares in the respondent companypanys register were illegal because the transfers were without any proper instrument of transfer.
1 and 2.
The appellant also companytended that the transfers were in companytravention of the mandatory provi sions of section 108 of the Act and articles of the respond ent companypany.
The numberice companycluded by stating that the respondent companypany was informed that the alleged transfer of shares from the names of the appellants as well as the deletion of their names from the register was illegal and void.
Subsequently under orders of the Bombay High Court the Receiver appointed by the Collector of Bombay took over papers of the dissolved firm from the Receiver appointed by the Bombay High Court.
It was incorporated on 7 April 1934 under the Indian Companies Act, 1913.
The numberice to the respond ent companypany also said that certain shares in blank transfer forms were in possession of the Receiver appointed by the Additional Collector of Bombay in the income tax recovery proceedings.
The numberice company cluded by saying that the respondents had numberright, authori ty, or power to act on behalf of or in the name of the appellants in pursuance of the said power of attorney.
First, whether the provisions of section 108 of the Companies Act, 1956 are mandatory in regard to transfer of shares.
CIVIL APPELLATE JURISDICTION Civil Appeal Nos.
The numberice stated that the agreements had become impossible of per formance and the companysideration of reciprocal promises disap peared.
1 and 2 and to restore the names of the original share holders.
Respondent No.
the protests lodged by the respondent and that the power of attorney in respect of the shares companyld number be cancelled by the appellant.
1 and Durga Prasad Khetan companytended in answer to the numberice that the appellant had numberright, title or interest in the 14 1458SCI/76 shares mentioned in the numberice, that the shares had number been transferred but had been transmitted subject to the orders of the Income Tax authorities under section 46 5 a of the Income Tax Act, and that the shares of the Ishwari Khetan Sugar Mills Ltd. were sold by the Additional Collector of Bombay in recovery of the income tax arrears in spite of.
The Receiver appointed by the Collector of Bombay also took possession of shares standing in the names of M s. Sagarmal Hariram Khetan, Sri Mannalal Khetan and Sri Radhakrishna Khetan along with blank transfer deeds signed by them.
On 14 January, 1962 the appellant along with Kamla Prasad Khetan and Mataden Khetan gave numberice to respondent No.
There were large income tax arrears and other tax li abilities outstanding against the firms and individual partners.
The appellant Mannalal Khetan and the respondents Kedar Nath Khetan and Durga Prasad Khetan are members belonging to two branches of the Khetan Family.
1805 to 1808 of 1968.
1805/68 and 1.
The numberice further stated that the powers of attor ney executed in favour of the respondent companypany by the appellant in respect of their shares in the Maheshwari Khetan Sugar Mills Private Ltd. and Laxmi Devi Sugar Mills Private Ltd. were revoked and cancelled.
108 to 111 of 1963.
On 16 June, 1953 a Receiver was appointed by the Collec tor of Bombay in execution of the tax recovery certificate issued by the Income Tax Officer S. VI Central Bombay.
John, for the Appel lants in all the Appeals.
The Judgment of the Court was delivered by RAY, C.J. These four appeals by certificate raise two questions.
The Khetan family held shares in the respondent companypany and in two other companypanies Maheshwari Khetan Sugar Mills Private Ltd. and Ishwari Khetan Sugar Mills Private Ltd. the shares stood in the names of 1 M s. Ganeshnarayan Onkarmal Khetan, 2 M s. Sagarmal Hariram Khetan, 3 Sri Mannalal Khetan and 4 Sri Radhakrishna Khetan.
1 and 2 and others of their group.
The respondent Lakshmi Devi Sugar Mills Private Ltd. is a private companypany.
S. Gae, in CA.
Ex parte, for Respondents in all the appeals.
On 3 July 1953 the Official Receiver of the Bombay High Court was appointed Receiver of the properties of the partnership firms.
For the realisation of the income tax dues the Income Tax Department issued in 1950 a numberice under section 46 5 a of the Indian Income Tax Act, 1922 requiring the respondent companypany to pay any amount due to the firm of Ganesh Narayan Onkarmal or its partners to that department.
The learned Single Judge directed the.
The members of the Khetan family did partnership business at various places.
The appellant also alleged that other shares had been attached by the Collector of Deoria in pursuance of the two certificates issued by the Collector of Bombay under Order 21 Rule 46 of the Code of Civil Procedure.
It is significant to numberice that the agreements recited that the shares in the respondent companypany were under attachment of the Income Tax authorities, and, therefore, they companyld number be immediately transferred.
