G.L.Chopra, J. -
(1.) This is a petition by the Union of India under section 38 of the Indian Companies Act, 1913, (section 155 of the present Act of 1956), for rectification of the register of members of the respondent-company, Kulu Valley Transport Ltd. Ram Dial and Gurdial, respondents Nos. 2 and 3 are brothers and Mst. Vidya Vati, respondent No. 4, is the wife of Ram Dial. Ram Dial holds four shares in the company, Nos. 39 to 42. Two shares each are held by Gurdial and Vidya Vati, their numbers being 14 and 43 and 44 and 45 respectively. All these shares are fully paid-up and of the value of Rs. 4,000 each. The facts stated by the petitioner, who already holds a large number of shares in the company, are these: In the year 1952, the business of the company practically came to a standstill and for that reason the value of the shares went down to nil. In a meeting of the company held on 29th Dec., 1952, Ram Dial and Gurdial, respondents, on behalf of themselves and on behalf of respondent No. 4, agreed to sell to the petitioner all the eight shares held by them on any value that may be fixed by the Railway Administration. Blank transfer deeds signed by the three respondents were handed over to the petitioner. The General Manager, Northern Railway, Delhi, forwarded the same to the Railway Board, vide his order dated 30th December. 1952, for acceptance on behalf of the President of India. On 5th Feb., 1953. Ram Dial respondent wrote a letter to the Railway Administration expressing his willingness to receive 10 per cent. of the face value of the shares as their price. A meeting of the board of directors of the company was fixed for 12th Feb., 1953. The chairman of the company, who was also a representative of the Railway Administration, wrote to respondent No. 2 to bring with him and hand over the scrips with respect to the eight shares transferred by the respondent. Ram Dial produced share scrips of six of the shares. He did not band over scrips of the remaining two shares, namely, 39 and 40. By his letter dated 21st March, 1953, (P-12), Ram Dial assured the Railway Administration that he would hand over the scrips of these two shares also as soon as he was able to settle his private dispute with Mrs. Perry, respondent No. 5, with whom the said shares were already pledged. The scrips of these shares have not been so far passed on to the petitioner, and the respondents are no longer willing to accept 10 per cent. of the face value of the shares as their price. It is claimed that these eight shares of the respondents have been legally transferred in favour of the petitioner and that the respondents are being wrongly shown as shareholders in the register of members of the company. Rectification of the register in respect of these shares is, therefore, prayed for.
(2.) Ram Dial has not appeared to oppose the petition, the proceedings against him are ex parts. Gurdial and Vidya Vati, respondents Nos. 3 and 4, in their written statements, claim themselves to continue as the shareholders of the company, on the ground that there had been no valid and completed transfer in favour of the petitioner and no price therefor had been settled or paid. Mrs. Perry, respondent No. 5, denies all knowledge of the facts stated by the petitioner and claims herself to be a pledgee of the shares of Ram Dial in the amount of Rs. 35.000. The company is alleged to have acknowledged her deceased husband. Mr. Perry's lien on the said four shares of Ram Dial in their letters (Exhibits R-9 and R-10) dated 12th Aug., 1947, and 7th May, 1948. Respondent company takes up a neutral position and states that the petitioner's name was not entered in the books of the company because of the dispute between the petitioner and respondents Nos. 2 to 4 and also because the company had ceased to function in between the time of the alleged transfer and the present petition.
(3.) The pleadings gave rise to the following issues:
(1) Have the respondents Nos. 2, 3 and 4 sold the shares in dispute to the petitioner, namely the Union of India?
(2) If so, is the petition not maintainable ?
(3) Has respondent No. 5, Mrs. G.R. Perry, a lien on the shares in dispute and was notice of the lien sent to the company ? What is the effect ?;