Share transfer timing dispute remanded for limited factual inquiry into sale date, transferee identity, and consideration payment.

A limited factual inquiry was required to determine whether the disputed share transfers were completed before the prohibitory order and subsequent liquidation order, and whether consideration had been paid. The Delhi HC did not disturb the earlier order, but remanded the matter to the Company Court to ascertain the date of sale of the shares, the identity of the transferee, and whether each respondent had paid consideration through the broker. The dispute therefore remained confined to proof of timing, transfer completion, and payment, with no final determination on the validity of the transactions at this stage.

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Issues: Whether the appeals should be remanded for a limited inquiry into the date on which the disputed shares were sold by the company, the identity of the transferee, and whether consideration was paid before the restraint order.

Analysis: The dispute turned on whether the relevant share transactions were completed before the prohibitory order dated 09.04.1997 and the subsequent liquidation order dated 22.05.1997. The record showed that the original share certificates and transfer deeds were with the respective respondents, but the appellants disputed the authenticity, timing, and proof of consideration of the transactions. The Court held that, without disturbing the earlier decision, a focused factual inquiry was required to determine when the company had divested itself of rights in the shares and whether the respondents had paid the consideration to the broker from whom the shares were purchased.

Conclusion: The matter was remanded to the Company Court for limited determination of the date and recipient of the sale of the disputed shares and whether consideration had been paid by each respondent, and the earlier order was not disturbed at this stage.

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