1960 (7) TMI 43

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....nd 43) and the remaining two by Vidya Vati, wife of Ram Dial (Nos. 44 and 45). The four shares held by Ram Dial had been previously pledged with Mrs. Parry. The Kulu Valley Transport Company began to fare badly in 1952 and an offer for the sale of these shares was made to the Union of India in the Railway Department. The offer was made by means of three letters, exhibits P. 2, P. 3 and P. 4, signed respectively by Ram Dial, Gurdial and Vidya Vati. The letters were all in identical terms and the text has been reproduced in the judgment of the learned single judge. The offer for sale was unconditional, and the shareholders offered to receive whatever price was considered just and proper by the Railway Department. No reply or a formal acceptan....

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....ansaction of sale effected by Gurdial and Vidya Vati. He also came to the conclusion that the transfer deeds bore stamps which had not been cancelled at the time of their execution and, therefore, the transfer deeds must be treated as unstamped, and since an unstamped transfer deed could not be made the basis of a genuine transfer, the transfers by Gurdial and Vidya Vati must be treated as incomplete. With regard to the two shares which were held by Mrs. Parry, the learned judge took the view that since no share scrips were handed over along with the transfer deeds, the transfer could not be said to have been complete within the meaning of the Indian Companies Act. Against this decision two cross appeals have been preferred under clause 10....

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....alid one, namely, the non-cancellation of the stamps. The transfer certificates were stamped, but the stamps were not cancelled, and under the provisions of section 12 of the Indian Stamp Act, the transfer deeds must be deemed to be unstamped. If a transfer deed is unstamped, the company cannot be asked to give effect to the transfer. Mr. Salooja, who appears on behalf of the Union of India, drew our attention to section 3 and section 29, item 62(a), Indian Stamp Act, and argued that transfer deeds of shares had to be executed both by the transferor and the transferee. The transferee in this case is the Government and, therefore, the Government being the executant of the documents, the deeds were exempt from stamp duty. The first proviso to....

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....r deed and, therefore, the transfer could not be said to be complete. It was contended, on the other hand, that the question of payment of stamp duty was not one of the terms of the contract as ordinarily stamp duty was paid by the transferor. This contention was accepted by the learned judges of the Federal Court, and holding that in law it is the transferor who pays the stamp duty, the absence of any agreement on this point could not invalidate the contract. In another case which came up before the Bombay High Court-New Citizen Bank of India v. Asian Assurance Co. Ltd. AIR 1945 Bom. 149, it was held that where an instrument of transfer properly stamped has not been given, it cannot be said that the transferee's name was omitted without an....