Insufficiently stamped transfer deeds and contributory liability after winding up: register entry prevails over alleged transfer defects

A transfer deed insufficiently stamped was not excluded merely because deficit duty and penalty remained payable; once the statutory requirements are met, the instrument may still be acted upon. After winding up commences, the person whose name appears on the register of members is treated as the contributory, because liability arises from statutory membership and is not displaced by an alleged defect in the underlying transfer. The order removing the transferee's name and substituting the transferor was set aside.

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Issues: (i) Whether an instrument of transfer that was not duly stamped could be excluded from consideration where the deficit duty and penalty under the Stamp Act were payable. (ii) Whether, after the commencement of winding up, the person whose name stood on the register of members could be treated as the contributory notwithstanding the alleged invalidity of the transfer.

Issue (i): Whether an instrument of transfer that was not duly stamped could be excluded from consideration where the deficit duty and penalty under the Stamp Act were payable.

Analysis: The provision governing insufficiently stamped instruments permits admission in evidence and acting upon the instrument once the requisite duty and penalty are paid. The fact that the transfer deed had been insufficiently stamped did not, by itself, justify ignoring it when the appellant was willing to comply with the statutory requirement. The document could not be finally ruled out on that ground alone.

Conclusion: The objection based on insufficient stamping did not justify exclusion of the transfer deed.

Issue (ii): Whether, after the commencement of winding up, the person whose name stood on the register of members could be treated as the contributory notwithstanding the alleged invalidity of the transfer.

Analysis: The register of members is prima facie evidence of membership, and once winding up commences the liability to contribute arises from the statutory position of being on the register. The prior defect or illegality in the underlying transfer does not displace that statutory liability at that stage. The reasoning followed the principle that the contributory's liability arises ex lege upon winding up.

Conclusion: The person shown in the register was to be treated as the contributory after winding up commenced.

Final Conclusion: The order directing removal of the transferee's name and substitution of the transferor was set aside, and the appeal succeeded.

Ratio Decidendi: After the commencement of winding up, contributory liability follows the statutory status of membership as reflected in the register, and a prior defect in the transfer cannot defeat that liability merely because the transfer was allegedly invalid or improperly stamped.

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