Description
No board resolution sanctioning transfer of shares – instrument of transfer was accompanied with certificates of shares – power of attorney – minor discrepancy – stamp duty – no proof of consideration for share transfer – fraud in civil cases requires a higher standard of proof – allegations of fraud in transfer of shares – removal of a director who absconds from appearing at directors meetings – discrepancies in transfer of shares – company documents signed by persons who had not ye been appointed as secretary and director – transfer of shares was carried out in 1972 and 1977 yet instructions to sell those shares were given in 1981 – shift of burden of proof – the person in possession of a share certificate – S. 27(1) of the Sale of Goods Act (p. 43).
- There was no board resolution sanctioning transfer of shares – it was held that the transfer is valid since according to Article 13 of the Memorandum and Articles of Association, there is no need for a sanction of the Directors as a condition precedent (pp. 15 – 16). The instrument of transfer was accompanied with certificates of shares.
- The power of attorney for a transaction – minor discrepancy in the donee’s name and the document did not indicate that the deponent was known – it was held that the defects are mere technicalities which cannot vitiate the transaction (p. 27).
- Stamp duty – the argument that there is no payment for stamp duty was raised in submissions but it was rejected on grounds that it was supposed to be raised during trial and that sometimes a party can be allowed to remedy the anomaly before the document is admitted (p. 28).
- Share transfer – the seller signed at a wrong place and there was no proof of consideration – it was held that those factors cannot negate the transfer (p. 28).
- Fraud in civil cases requires a higher standard of proof (p. 29).
- Allegations of fraud in transfer of shares – plaintiffs failed to account how their share certificates landed into the hands of the defendants. Also disputed documents for the transfer of shares bore signatures of the plaintiffs. The court concluded that the plaintiffs had failed to prove that the transfer of their shares to the defendants was done fraudulently (p. 30).
- Removal of a director who absconds from appearing at directors meetings after a six months absence (p. 34).
- Shareholders who sold their shares can still appear in company records as a shareholder until such time when their share certificates are cancelled (pp. 41 – 42).
- Discrepancies in transfer of shares – transfer document was signed in October, 1972 by a company secretary while she was not yet a company secretary. Another person signed the document in October, 1972 as a director while he was not yet a director. Sale of shares was done in 1972 and 1977 yet instructions to sell those shares were given in 1981. Despite all those defects, the court held that the transfer of shares was still valid since the purchasers were in possession of share certificates (p. 43).
- Shift of burden of proof due to shortfalls in the defendants’ evidence – it was held that it is wrong to shift the burden of proof to the defendants while the plaintiffs’ hands are equally tainted (p. 43).
- The person in possession of a share certificate must be deemed to have received it through transfer from the original owner unless the contrary is proved in view of S. 27(1) of the Sale of Goods Act (p. 43).
