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1 - 6 of 6 (0.72 seconds)Section 9 in The Arbitration And Conciliation Act, 1996 [Entire Act]
Section 17 in The Arbitration And Conciliation Act, 1996 [Entire Act]
M/S Khoday Distilleries Ltd vs Commissioner Of Income Tax & Anr on 14 November, 2008
When the words 'allotment of
shares' have been used to indicate creation of shares by appropriation out of
unappropriated share capital and it is not the case of transfer of existing
shares, in this behalf, he also placed reliance on the decision of the Supreme
1 (2009) 1 SCC 256
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Court in Sri Gopal Jalan & Co. Vs. Calcutta Stock Exchange Association Ltd. 2 in
support of his contention, which is being quoted with approval in the case of
Khoday Distilleries Ltd. (supra) .
Sri Gopal Jalan & Company vs Calcutta Stock Exchangeassociation ... on 9 May, 1963
Reference was also made in Sri Gopal Jalan (supra) to the
observations of Lord Greene M.R. in V.G.M. Holdings Limited4 that the term
'purchase' cannot be applied to a legal transaction under which a person, by
the machinery of application and allotment, becomes a shareholder in the
company. He does not "purchase" anything, when he does that. Relying upon
the aforesaid observations, Mr. Kadam submitted that there is no case of
transfer of shares and that GVK is not in breach of its obligations and the
restrictions of transfer. The definition of "transfer" in the SHA does not, in my
view, cover issuance and allotment of shares to any third party other than the
plaintiffs. The issuance and allotment of shares is not prima facie a transfer,
2 (1964) 3 SCR 698
3 (1911) ILR Ch 73, 84
4 (1942) 1 Ch D 235
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which could fall foul of the prohibition made in the SHA or the order of the
arbitral tribunal. In view of the fact that the expression 'transfer' does not
specifically contemplate creation of new shares, GVK, prima facie, is not in
breach of this obligation. In that view of the matter, no relief can be granted.
Life Insurance Corporation Of India vs Escorts Ltd. & Ors on 19 December, 1985
20. In the meantime, on a query from the court as to whether Bidvest was
willing to extend the Long Stop Date, Mr. Dwarkadas submitted that he has
instructions to state that the Long Stop Date cannot be further extended.
Mr.Dwarkadas further submitted that AAI had contended that they were not
interested in acquiring the shares and that is now a matter of record. It is GVK
who filed a Section 9 application and since March, 2019, Bidvest has been
dragged into litigation. The shares are of worth Rs.1248.75 crores and
interest being lost on the said amount, he reiterated that Rs.70 crores had
already been lost. According to him, Bidvest has complied with clauses 3.6
and 3.7 of the agreement and as presently advised, the plaintiffs have no right
to interfere with the SHA as between co-shareholders. The plaintiffs are
seeking to act as if they are shareholders and they also seek to enforce the
plaintiffs' SPA against the co-shareholders, namely, GVK, ACSA and AAI
through Bidvest. This he submitted is clearly not permissible. As far as
principle of constructive trust is concerned, Mr. Dwarkadas has relied upon
the decision of the Supreme Court in Life Insurance Corporation of India Vs.
Escorts Limited and Others5, and invited my attention to paragraph 84 of the
5 (1986 )1 SCC 264
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judgment, in which the Supreme Court had occasion to deal with the rights of
a transferee to get his name on the register, which must be exercised with due
diligence, and observes that a constructive trustee does not extend to a case
where a transferee takes no active interest "to get on the register". He further
submitted that for a transfer to be effective between a transferor and
transferee, what must be ascertained is whether a share transfer form had
been executed. Without a transfer form being executed, there is no question
of any constructive trustee coming into effect. The contention of the plaintiffs
that Bidvest is constituted as a constructive trustee for and on behalf of the
plaintiffs is therefore refuted by Mr. Dwarkadas.
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