Share transfer proof and limitation: disputed transfer failed for lack of records, while knowledge-based limitation kept the petition maintainable.

In a disputed share transfer, the party asserting validity must prove the transfer through cogent contemporaneous records and the prescribed transfer documents. Here, the annual returns did not show the actual transfer date, and the transfer form, share certificates, or letter of allotment were not produced; the evidentiary burden was therefore not discharged and an adverse inference was drawn, with the transfer treated as fraudulent and sham. On limitation, because no definite transfer date was established from the respondents' records, the date of knowledge became material; on the stated facts, the petition was treated as filed within three years of knowledge and therefore maintainable.

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Issues: (i) Whether the alleged transfer of shares in favour of the second respondent was duly proved and could be treated as valid; (ii) Whether the petition challenging the transfer was barred by limitation.

Issue (i): Whether the alleged transfer of shares in favour of the second respondent was duly proved and could be treated as valid.

Analysis: The supporting records relied upon by the respondents were not sufficient to establish a lawful transfer. The annual returns did not disclose the actual date of transfer, and the mandatory transfer form and share certificates or letter of allotment were not produced as required for a completed transfer. The second respondent's subsequent affidavit also cast doubt on the consistency of the defence. In the absence of proof of consideration and the necessary transfer documents, the evidentiary burden was not discharged, and an adverse inference was warranted.

Conclusion: The alleged transfer was not proved and was rightly treated as fraudulent and sham.

Issue (ii): Whether the petition challenging the transfer was barred by limitation.

Analysis: Since the respondents failed to establish a definite date of transfer from their own records, the date of knowledge became material. The petitioner's case was that knowledge was gained only in late 2006 or early 2007 upon inspection of records. On that basis, the proceeding was brought within three years from the date of knowledge, and the respondents did not rebut that position with reliable documentary evidence.

Conclusion: The petition was within limitation and maintainable.

Final Conclusion: The challenge to the impugned order failed, and the dismissal of the appeal left the finding of fraudulent share transfer and maintainability of the petition undisturbed.

Ratio Decidendi: Where a share transfer is disputed, the party asserting the transfer must prove it by cogent contemporaneous records and the prescribed transfer documents, and in the absence of a proved transfer date the limitation period may run from the date of knowledge.

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