Transfer by execution and delivery of share transfer deed vests beneficial ownership and liabilities despite lack of company registration.

Whether execution and delivery of a share transfer deed effects a complete transfer despite non-registration: the court applied the principle that shares are movable property transferable according to the company's articles and that a contract evidenced by execution and delivery of a deed vests beneficial ownership and attendant liabilities in the transferee. The articles permitted refusal of registration but the company had neither refused nor been given opportunity to consider transfer; omission to present the deed promptly did not void the contract. Outcome: the transferee became owner of the 20 shares and plaintiffs were entitled to a decree for the stated purchase price.

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Issues: Whether the execution and delivery of a deed of transfer of 20 shares by the vendor to the transferee amounted to a complete and binding transfer entitling the transferee to the rights and liabilities of ownership despite registration in the company's books not having been effected.

Analysis: A deed of transfer executed in the prescribed form was drawn up between the parties and handed to the transferee, and secondary evidence of that deed was admitted. Section 44 of Act VI of 1882 (corresponding to Section 28 of the Indian Companies Act, 1913) treats shares as movable property transferable in the manner provided by the company's articles. The articles allowed the company to decline registration and provided that the transferor remains on the register until substitution, but the company neither refused registration nor was given the opportunity to consider the transfer. The transferee's omission to present the deed promptly cannot be used to render the contract a nullity. The contract between vendor and transferee, evidenced by execution and delivery of the deed, is thus complete as between those parties and operates to vest beneficial ownership and attendant liabilities in the transferee.

Conclusion: The transfer contract was complete on execution and delivery of the deed; the transferee thereby became owner of the 20 shares with all rights and liabilities attached; plaintiffs are entitled to a decree for Rs. 80 as the price of the shares.

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