2019] 147
[2019] 154 SCL 147/105 taxmann.com 200 (SC)
SUPREME COURT OF INDIARam Parshotam Mittal
v.
Hotel Queen Road (P.) Ltd.
ARUN MISHRA AND INDIRA BANERJEE, JJ.
CIVIL APPEAL NOS. 3934 & 3935 OF 2017
MAY 10, 2019Where shares of respondent-company were transferred when share certificate
were lying with bank to whom shares had been pledged, transfer of shares
without share certificates along with duly executed share transfer form was
in violation of section 108 of Companies Act, 1956
Section 56, read with section 241, of the Companies Act, 2013/Section 108, read with
section 397, of the Companies Act, 1956 - Transfer of shares - Not to be registered
except on production of instrument of transfer - Whether shares can be transferred
only in accordance with section 108 which provides for filing of share certificate
which is a mandatory requirement - Held, yes - Property of ITDC was transferred
to respondent-company under a demerger scheme of Government - Government
sold its share in respondent to ‘M’ - Appellants were having controlling interest in
‘M’ and were appointed as whole time directors and ‘A’ was appointed as a direc-
tor - ‘H’ was allotted Cumulative Preference Shares in respondent - Respondent’s
shares were allotted to ‘M’ and appellants in three board meetings of which no
notice was given to ‘A’ and ‘H’ - Later, ‘M’ transferred its shares to appellants -
Whether since shares certificates held by ‘M’ were lying with bank to whom they
were pledged when transfer of shares to appellants was approved in board meting,
transfer of shares was in violation of section 108 - Held, yes - Whether allotment
of shares in board meetings without notice to director ‘A’ and ‘H’ was improper
and oppressive and, therefore, allotment of shares in said board meetings was to
be cancelled - Held, yes [Paras 81, 86 and 89]
FACTS
n
The
Government
of
India
took
a
policy
decision
on
5 - 7 - 2002
to
disinvest
its
shares^
in
the
Indian
Tourism
Development
Corporation
(ITDC)
which
owns
various^
hotel
properties;
one
of
them
being
Indraprastha
Hotel,
formerly
known^
as
Hotel
Ashok
Yatri
Niwas.Ram Parshotam Mittal
v.
Hotel Queen Road (P.) Ltd. (SC)