Court auction share transfer overrides directors' discretion where the company has already accepted registration.

A court auction purchaser of shares was treated as taking title through compulsory judicial process, not by a voluntary transfer. On that basis, articles giving directors discretion to refuse transfers were construed as inapplicable to a sale by operation of law. The board's earlier acceptance of the transfer, followed by later refusal to register it, could not displace the completed court sale or undo the acceptance. The company was therefore bound to rectify the register and enter the purchaser as holder of the shares.

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Issues: Whether the purchaser of shares at a court auction was entitled to have its name entered in the register of members in place of the judgment-debtor shareholder, notwithstanding articles conferring discretion on the directors to refuse transfers.

Analysis: The sale of the shares had been made in execution of a decree and the Court had executed the necessary transfer document under the Civil Procedure Code. A court sale stands on a different footing from a voluntary transfer: the bidder at such a sale does not purchase merely the share, but acquires title through the compulsory process of the Court. The articles dealing with transfer were construed as applying to voluntary transfers, not to a sale by operation of law. In any event, the company's board first accepted the transfer, communicated that acceptance, and only later resolved to refuse registration. That later refusal came too late and could not undo the earlier acceptance or defeat the completed court sale.

Conclusion: The purchaser was entitled to rectification of the register and the company was bound to enter its name as holder of the shares.

Final Conclusion: A transferee under a completed court auction sale of shares could not be deprived of registration by a later exercise of directors' discretion, and the register had to be corrected accordingly.

Ratio Decidendi: A company's articles conferring discretion to refuse transfer do not defeat a completed transfer of shares effected by court sale and execution process, especially where the board has already accepted the transfer.

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