Executed transfer instrument required for share divestment; attempted allotment alone does not end contributory status.

Shares already standing in a member's name cannot be divested by a mere purported allotment or an incomplete transfer form. Where the articles require an executed instrument of transfer by both transferor and transferee, that formal requirement must be satisfied before title passes. On the facts, the material produced showed only an attempted allotment under the Companies Act, not a completed transfer, so the objector remained the registered holder and continued to be a contributory for winding-up purposes. The Official Liquidator's appeal succeeded, the objector's appeal failed, and the District Judge's order was restored with costs.

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Issues: (i) Whether the shares standing in the objector's name had been validly transferred to third parties or were merely the subject of an attempted allotment. (ii) Whether the objector continued to remain a contributory in respect of the shares for winding-up purposes.

Issue (i): Whether the shares standing in the objector's name had been validly transferred to third parties or were merely the subject of an attempted allotment.

Analysis: A distinction was drawn between allotment and transfer. An allotment is an act of the company by which unappropriated shares are issued to an applicant, whereas shares already standing in one person's name cannot be allotted to another, even with the former's consent. For a transfer, the Articles required an executed instrument of transfer by both transferor and transferee. The only material produced did not satisfy that requirement, and the return filed with the Registrar was one of allotment under Section 104 of the Indian Companies Act, 1913, not proof of a completed transfer.

Conclusion: The shares were not validly transferred; the supposed transfer failed in law.

Issue (ii): Whether the objector continued to remain a contributory in respect of the shares for winding-up purposes.

Analysis: Since no valid transfer of the relevant shares was established, the objector remained the registered holder in respect of them. The surrounding evidence also undermined the version that the shares had been sold to the alleged transferees, and the record indicated that the documents relied upon related to an intended transfer that was never carried out.

Conclusion: The objector continued to be a contributory in respect of the shares.

Final Conclusion: The appeal of the Official Liquidator succeeded, the objector's appeal failed, and the District Judge's order was restored with costs.

Ratio Decidendi: Where the governing articles require an executed instrument of transfer, shares already standing in a member's name cannot be divested by a mere purported allotment or incomplete transfer form.

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