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        Companies Law

        1934 (6) TMI 25 - HC - Companies Law

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        Validity of share allotment failed where notice and register entry were unproved, preventing contributory liability. An alleged allotment of shares was held not to be validly established where the liquidators failed to prove timely notice of allotment, the date of entry ...
                          Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
                            Provisions expressly mentioned in the judgment/order text.

                                Validity of share allotment failed where notice and register entry were unproved, preventing contributory liability.

                                An alleged allotment of shares was held not to be validly established where the liquidators failed to prove timely notice of allotment, the date of entry of the respondents' names in the register, or any reliable communication of the allotment. The delay in asserting the allotment, together with the demand for allotment money made immediately before liquidation, undermined the claim that the respondents had become shareholders. As the allotment was not proved in law, the respondents could not be placed on the list of contributories.




                                Issues: Whether the alleged allotment of shares to the respondents was valid in law and whether they could therefore be placed on the list of contributories.

                                Analysis: The liquidators failed to prove that any notice of allotment had been sent within a reasonable time, and there was no reliable evidence showing when the respondents' names were entered on the register. The delay in allotment, coupled with the absence of proof of communication and the suspicious timing of the demand for allotment money immediately before liquidation, supported the finding that the alleged allotment was not properly established.

                                Conclusion: The allotment was not proved to be valid in law, and the respondents could not be treated as contributories.


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                                ActsIncome Tax
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