Case: Madhusoodhanan & Another Vs. Kerala Kaumudi Pvt. Ltd. & Others

Ruma Pal, J. 1. An internecine dispute between the members of a family relating to the controlling interests in companies has given rise to the nine appeals which are being disposed of by this judgment. Given the number and nature of the proceedings, to avoid any confusion, the parties are referred to by their names and not in the capacity in which they have sued or been sued except when describing the collective stand of all the respondents in these appeals, when they are referred to simply as ‘the respondents’. 2. The main protagonists in all the litigations are Madhusoodhanan, Srinivasen, Ravi and Mani who are brothers with Madhusoodhan on one side and Srinivasan, Ravi and Mani on the other. The parents of the four were on K. Sukumaran and Madhavi both of whom are deceased. K. Sukumaran died before the litigations between the parties erupted and Madhavi died during the pendency of the litigation. While she was alive she supported Srinivasan, Ravi and Mani. The four brothers are married and have children. It is unnecessary at this stage to clutter the narration of facts with the names of the wives and children, who will be referred to by name when the particular litigation in which they are involved is considered. The dispute began with a struggle over the controlling interest in a company by the name of Kerala Kaumudi Pvt. Ltd. (hereinafter referred to as Kerala Kaumudi).3. Kerala Kaumudi is a private company incorporated under the Indian Companies Act, 1913 which was promoted in 1955 by the parents of the four brothers. Besides Kerala Kaumudi other "family" concerns were incorporated including Kaumudi Investments Pvt. Ltd., Kerala Exports (P) Ltd., Kaumudi News Pvt. Ltd., Laisas Publications Pvt. Ltd., Shiv Printers & Publishers, Ravi Printers & Publishers Pvt. Ltd., Kaumudi Films Outdoor Unit, Electronic & Equipment Corporation and Ravi Transports. However, the core of the controversy is the control of Kerala Kaumudi.4. The business of Kerala Kaumudi, (which was the flagship company) is to own and publish newspapers, journals and other literary works and undertakings. Its authorised share capital is 20 lakhs divided into 2000 shares of Rs. 1000/- each. The total number of issued and paid up equity shares in Kerala Kaumudi was 1575. During the life time of K. Sukumaran each of the brothers along with their parents had shares in Kerala Kaumudi and the shareholding was a follows:5. Sukumaran died on 18th December, 1981. He was the Managing Director of Kerala Kaumudi from 1955 to 1973 and its Chairman from 1973 till his death. He was succeeded as Chairman by his widow Madhavi. Madhusoodhan was appointed as Managing Director of Kerala Kaumudi in 1973 immediately after Sukumaran died. On 25th January 1985. Madhusoodhanan was appointed as Managing Director and Editor of Kerala Kaumudi for life. He was also empowered to exercise the powers given to the Director under Article 79 of the Articles of Association. At the same time Srinivasan was appointed as General Manager of Kerala Kaumudi for life and Ravi was appointed as Director and Executive for life. To give effect to these appointments. Article 69A and Article 74 of the Articles of Association of Kerala Kaumudi were amended.6. The dispute between the parties started soon after the death of Sukumaran in September 1981. When these reached a head, on 29th November, 1984 a resolution was taken at a meeting (Ex. P-190) of the company which was signed by the four brothers and Madhavi by which the controlling interests in the different family companies were agreed to be given to the four brothers on the basis of their active interest in a particular concern. Kerala Kaumudi’s control was to be with Madhusoodhanan. In implementation, Transfer of shares in these companies were effected between the brothers and their respective families. The dispute however did not abate. On 24th October, 1985 an agreement was entered into between the parties in an attempt to resolve their differences. This agreement has been exhibited in the proceedings as Ext. P1. On 28th December, 1985, a second agreement (Ext. P-2) was entered into by which it was, inter alia, agreed that all the various family controlled companies and firms would be divided among the four brothers.7. On 16th January, 1986 a third agreement was entered into which has been marked as Ext. P.3. The parties to the third agreement were Madhavi, Mani, Madhusoodhanan, Srinivasan, and Ravi. Briefly speaking. Ext. P3. is about the division of effective control of the "family" concerns amongst the four brothers. It relates to the transfer of Mani’s shares in Kerala Kaumudi’ to Madhusoodhanan. In addition, the parties agreement that Madhusoodhanan would have the major share holding in Kaumudi Investments Pvt. Ltd., Kerala Exports (P) Ltd. and Kaumudi News Pvt. Ltd. Mani the majority share holding of 52 per cent in Laisa Publications Pvt. Ltd. (which has subsequently changed its name to Kala Kaumudi Pvt. Ltd.), Srinivasan 52 per cent in Shiv Printers and Publishers, and Ravi, the majority holding in Ravi Printers and Publisers (P) Ltd., Kaumudi Films Outdoor Unit. Electronic and Equipment Corporation and Ravi Transports, is also recorded.8. According to Madhusoodhanan, Mani and his children had already transferred their entire holding of of 390 shares in Kerala Kaumudi to Madhusoodhanan in May 1985, prior to the third agreement. As a result, Mani and his children had no shares in Kerala Kaumudi, Madhusoodhanan had 612 shares, and Sreenivasan and Rai had 222 shares each Nine shares continued to stand in the name of the late K. Sukumaran, and three shares in the name of Madhavi. In addition, the two children of Madhusoodhanan had 84 shares each. Sreenivasan’s daughter, Anju had 168 shares, Ravi’s son, Deepu, had 168 shares and KIPL continued to hold 3 shares.9. On 23rd July 1986, a Board meeting of Kerala Kaumudi was held at which Madhavi assumed the powers of the Managing Director in purported ouster of Madhusoodhanan. The meeting is disputed by Madhusoodhanan. He says that no such meeting was in fact held and that the minutes were subsequently drawn up. A second Board meeting, which is also disputed by Madhusoodhanan, was held on 1st August 1986 in which a decision was taken to increase the paid-up share capital of Kerala Kaumudi by issuing 425 additional sharee of Rs. 1000/- each. At a Board meeting held on 8th August 1986 these additional shares were issued to Ravi and Shreenivasan and one share was transferred by Ravi to Mani. This meeting as well as the allotment of the additional shares is not accepted by Madhusoodhanan. On 16th August, 1986 at an Extraordinary General Meeting Madhusoodhanan was removed as Managing Director of Kerala Kaumudi and Article 74 of the Articles of the company deleted .10. In this background, several proceedings were filed by the parties against each other some of which may be taken up for consideration. Together. The first lot consists of six months relating directly to Kerala Kaumudi and the share holding in Kerala Kaumudi. The six are: (i) C.P. No. 14 of 1986 filed by Madhusoodhanan for rectification of the company’s share register under section 155 of the Companies Act, 1956 by cancellation of the allotment of 425 shares to Ravi and Sreenivasan and for removal of the name of Mani from the company’s share register.(ii) Company petition, C.P. No. 31 of 1988 filed by KIPL for similar reliefs.(iii) A suit filed by Madhusoodhanan in the Munsif’s Court, Trivandrum being O.S. No. 1329 of 1986 (subsequently re-numbered as C.S. No. 3/89, when withdrawn to the High Court) for a decree declaring that he continued to be the Managing Director of Kerala Kaumudi and for a declaration that the Board meetings held on 23.7.86, 1.8.86 and the meetings subsequent thereto were illegal and ultra vires the Articles of Association of the company.(iv) A suit being O.S. No. 482/88 (subsequently re-numbered as C.S. No. 5/89, when withdrawn to the High Court) filed by KIPL against Kerala Kaumudi for similar reliefs.(v) A suit filed by Madhusoodhanan for specific performance of the third agreement, Ex. P.3. (O.S. No. 483/88, subsequently re-numbered as C.S. 6/89 when withdrawn to the High Court).(vi) C.P. N. 26 of 1987 filed in 1987 by Mani and his children for a declaration that the transfer of 390 shares by them to Madhusoodhanan pursuant to the Board’s decision dated 21.5.85 was illegal and void and for rectification of the share register by recording them as the owners of 222, 84 and 84 shares respectively. 11. These six matters are now numbered as CA Nos. 3253-3256 of 1991 before us.12. The second set of litigation being Company Petition No. 15 of 1986 was filed in 1986 by Mani’s wife Kastoori Bai, daughter Valsa, Ravi’s wife Shyiaja, and Sreenivasani’s wife Laisa as well a Madhavi for rectification of the share register of KIPL. This is now numbered as CA 3260 of 1991.13. The third set consists of CP No. 11 of 1987 (now CA 3261 of 1991) filed by Vaishak, the minor son of Madhusoodhanan, for rectification of the share register of Kerala Kaumudi.14. The fourth set of proceedings originally consisted of two suits filed before the Munsif’s Court, Trivandrum relating to the office premises of Kerala Exports and KIPL. The suit filed by Kerala Exports, (numbered on transfer as CS No. 2 of 1999) was for a mandatory injunction to restrain Kerala Kaumudi, Sreenivasan, Ravi and Madhavi from disturbing its functioning in Kaumudi Buildings. O.S. No. 1569 of 1988 (subsequently numbered as CS 4 of 1989) was a similar suit filed by KIPL before the Munsif’s Court for restraining the defendants from preventing the peaceful functioning of KIPL’s administrative office in Kaumudi Buildings.15. All the original suits were transferred to the High Court under the provisions of Section 446 of the Companies Act and were heard along with the several company petitions noted earlier. About 296 documents were tendered in evidence by the parties. Seven witnesses were examined. The four witnesses who deposed in support of Madhusoodhanan were P.K. Kurien, Advocate (PW1), Mohan Raj, former Personal Assistant to Madhusoodhanan (PW2) Vasudevan, former Company Secretary (PW3) and Madhusoodhanan himself (PW4). As far as the opponents were concerned, Mani (RW1), Srinivasan (RW2) and Laisa Srinivasan (RW3) gave evidence in support of their stand.16. The Single Judge decided CP No. 14 of 1986 in Madhusoodhanan’s favour. The application for rectification was allowed and the allotments of shares made in the meeting held on 8.8.86 were set aside and rectification of the share register of Kerala Kaumudi by deleting the further allotment of 425 shares each to Sreenivasan and Ravi was directed. The prayer for cancellation of the transfer of one share in favour of Mani was, however, disallowed. However, the petition filed by KIPL (CP No. 31 of 1986) which had virtually asked for the same reliefs as in CP No. 14 of 1986 was dismissed by the learned Single Judge on the ground of delay. Madhusoodhanan’s suit (C.S. No. 3 of 1989) and KIPL’s suit (CS No. 5 of 1989), were decreed by holding inter alia that the meetings held on 23.7.86, 1.8.86, and 17.8.86 in so far as they affected Madhusoodhanan and by which Madhusoodhanan had been removed as Managing Director and Article 74 of the Articles of Association of the company was deleted, were illegal and invalid. Madhusoodhnan was declared to be the Managing Director of the Company. The suit filed by Madhusoodhanan for specific performance of Ext. P3 (CS No. 6 of 1989) was also decreed. Mani and his children’s application for setting aside the transfer of 390 shares (CP No. 26/87) was dismissed. An arbitrator was appointed for determining what amount was payable by Madhusoodhanan to Mani for the shares transferred by Mani Madhusoodhanan.17. The second set of proceedings initiated by Mani’s wife and others viz. CP No. 15 of 1986, for rectification of the share register of KIPL and the third set filed by Madhusoodhana’s minor son, Vaishak for rectification of the share register of Kala Kaumudi (CP No. 11 of 1987) were dismissed.18. The two suits filed by Kerala Exports and KIPL (CS 2 of 1989 and CS 4 of 1989 respectively) relating to their continued possession in Kaumudi Buildings were decreed.19. The aggrieved parties preferred appeals in each of the matters. By a common judgment, the Division Bench reversed the findings of the learned Single Judge in all of the appeals except in the appeal from CS 2 of 1989. Nine Special Leave Petitions were filed in this Court in the separate proceedings on which leave was granted on 27th August, 1991. 20. We propose to deal with issues which can be said to be common to the different sets of litigations before giving out conclusions on each appeal separately. 21. The underlying question in the first set of litigations viz. who has the controlling interest in Kerala Kaumudi has given rise in turn to the following topics: A) the transfer of shares by Mani and his children to Madhusoodhanan.B) The removal of Madhusoodhanan as Managing Director.C) The issue of additional shares to Ravi and Srinivasan, andD) Specific performance of the agreement (Karar) dated 16.1.1986.Transfer of shares by Mani and his children to Madhusoodhanan 22. In C.P. 26/87, Mani and his group prayed for rectification of the share register of Kerala Kaumudi by deleting the name of Madhusoodhanan as a shareholder in respect of the shares which Mani and his group had transferred to him in 1985. The prayers proceed on the basis that there was in fact a transfer of shares in 1985 which was, after two years, sought to be set aside. The grounds on which this was asked for were: A. The consideration for the transfer had not been agreed upon and no consideration had in fact been paid.B. No proper documents had been executed effecting the transfer.C. Neither Valsa nor Sukumaran Mani, a minor had any knowledge of the transfer and the transfer of their shares was invalid.D. Section 108 of the Companies Act, 1956 had not been complied with in respect of any of the transfers. 23. The learned Single Judge rejected all four contentions, and in our view, rightly. The Division Bench held in favour of Mani and his group on grounds which are legally and factually unsustainable for the reasons stated in the following paragraphs. 24. The documentary evidence relating to the transfer, shows without a shred of doubt that there was a valid transfer of shares. To begin with the minutes of the meeting held on 19th March 1985 (Ex. R-62)(a)) which were signed by Mani, records: "Shares of Sri M.S. Mani. All the shares in Kerala Kaumudi owned by Sri M.S. Mani and family would be pledged by him to Sri M.S. Madhusoodhanan who shall extend financial facilities to Sri M.S. Mani. The loan will be paid with 22 percent interest by Sri Mani when Sri M.S. Madhusoodhanan shall release the shares of Sri M.S. Mani. The modus operandi of the transaction shall be decided in consultation with barrister P.K. Kurien of Menon and Pai". 25. The intention of Mani and his group to transfer their shareholding to Madhusoodhanan is evident from this. Although the mode of transfer was subsequently changed, this intention was affirmed at the Board meeting of Kerala Kaumudi held on 23rd April 85. The fifth and sixth resolutions as appearing in the minutes of the meeting (Ex.P-62(b) which were also signed by Mani read as under: "Sri M.S. ManiLetter of resignation from the direct directorship of Kerala Kaumudi (Pvt.) Ltd. effective from 23.4.85 afternoon submitted by Sri S.M. Mani was approved by the Board.(6) Shares owned by Sri M.S. Mani and family in Kerala Kaumudi (P) Ltd."Shares owned by Sri M.S. Mani and family in Kerala Kaumudi (P) Ltd. will be transferred to Sri M. S. Madhusoodhanan forthwith on a consideration to be mutually agreed between the transferor and the transferee. The liabilities of Sri M.S. Mani to the income tax department etc. up to 31st March, 1985 should be settled by Kerala Kaumudi (P) Ltd. before finally deciding a consideration for the share transfer. The Kerala Kaumudi (P) Ltd. undertakes to discharge the liabilities arising on account of personal guarantees given by Sri M.S. Mani for the company". (Emphasis supplied). 26. The sixth resolution clearly envisages three distinct stages: an immediate and unconditional transfer of shares, then, the settlement of the Mani’s income tax liabilities by Kerala Kaumudi and, after both these stages, the determination of the consideration for the transfer to be mutually agreed on. 27. The Division Bench, therefore, erred in holding that the agreement for transfer of shares was conditional on the determination of the price of the shares and in concluding that as there had been no such determination, no transfer could have taken place. The express intention was to effect an immediate transfer of the shares and to agree upon the consideration later. Section 9 of the Sale of Goods Act, 1930 permits this. [Ascertainment of Price :(1) The price in a contract of sale may be fixed by the contract or may be left to be fixed in manner, thereby agreed or may be determined by the course of dealing between the parties. (2) Where the price is not determined in accordance with the foregoing provisions, the buyer shall pay the seller a reasonable price. What is a reasonable price is a question of fact dependent on the circumstances of each particular cases.] 28. Section 4 read with Section 2(10) of the Sale of Goods Act, 1930 require that the contract of sale must provide for the payment of money as a consideration for the transfer of goods, or to put it differently, that a price must be paid. But Section 9 of the 1930 Act allows the parties not to fix the price at the time of the transfer and to leave the determination of the amount of consideration to a later date. An agreement which provides for the future fixation of price either by the parties themselves or by a third party is capable of being made certain and is not invalid as provided under Section 29 of the Contract Act, 1872 (See: Illustration (e) in view of such categoric and clear statutory provisions, the submission of learned counsel representing Mani that such a contract is void for uncertainty because the price was not fixed, is unacceptable. The passage from Banjamin’s Sales of Goods (1974 Edn.) relied on which says "If the price is left to be agreed upon subsequently between the parties, there will ordinarily be no binding contract, on the grounds of uncertainty, unless and until they later reach agreement on a price. Moreover, an agreement to leave the price open to further negotiation will normally exclude any inference that the price should be a reasonable price in accordance with the provisions of section 8(2)." may be an exposition of the law as it is in England and cannot be seen as an authority on the interpretation of section 9(1) of the Sale of Goods Act. Besides, the same passage cited goes on to say; "But in accordance with the principle that the Courts will endeavour to uphold bargains which the parties believe themselves to have concluded, especially in the case of executed or partially executed contracts, it may sometimes be possible either to infer an intention that any rate a reasonable price should be paid if no price is later settled, or to have regard to other circumstances, such as the course of dealing between the parties." 29. In this case, there can be no doubt that the first stage of the agreement for the immediate transfer of shares was executed and the Division Bench erred when it held to the contrary. 30. The questions as to what would be the reasonable price for the shares, the mode of its determination and whether any consideration has already been paid by the Madhusoodhanan to Mani are considered subsequently. 31. The minutes of the Board meeting held on 21st May, 1985 (Exhibit P-62(C) of Kerala Kaumudi record that the following share transfer deeds were placed before the Board, namely, the deeds relating to the transfer of 222 shares by M.S. Mani to Madhusoodhanan, 84 shares by Valsa Mani to Madhusoodhanan, 84 shares by Sukumaran Mani to M.S. Mani and 84 shares by Mani to Madhusoodhanan. The Board resolution goes on to record. "After discussion the share transfers were approved by the Board and the Managing Director and any other Director was authorised to sign the relative now where certificates to be issued in favour of Sri M.S. Madhusoodhanan and to affix the common seal of the company in the share certificates in the presence of the Company Secretary." 32. The minutes of the Board meeting held on 21st May 1985 were read as approved on 4th June 1985. Both meetings were attended by Madhavi, Mahusoodhanan, Srinivasan and Ravi and the minutes signed by Madhavi as Chairman. The transfer of the shareholding of Mani and his children was also admittedly entered in the Company’s Share Certificate Ledger (Ex. P-90). 33. It is evident from this that the share transfer forms which were placed before the Board had been executed and were otherwise duly completed, or else the question of the approval of such transfer would not arise. 34. Apart from these minutes, are the minutes of the meeting held on 26th August 1986, when Madhusoodhanan, was already effectively removed from the control of Kerala Kaumudi. Item No. 4 of the minutes relates to the transfer of a share by Ravi to Mani. Countering Madhusoodhanan’s objection to such transfer, the minutes tellingly record: "Smt. C.N. Madhavi pointed out that the sale consideration of the shares held by Sri. M.S. Mani which was around 24 percent of the total shares of the company at the time of transfer had not been paid by Sri. M.S. Madhusoodhanan. She pointed out Sri M.S. Mani was the senior most Director of the company and he is the eldest son of late Sri. Sukumaran, the founder of the company. She also pointed out that Sri M.S. Mani is eligible for 1/5 of the shares held in the name of his father. She further pointed out that it is prestigious for the company that Sri M.S. Mani, the former senior Director and glorious editor of the newspaper to be a shareholder of the company". 35. In the Annual Return of Kerala Kaumudi dated 27th June, 1985 filed under section 159 of the Companies Act, 1956 with the Registrar of Companies, in the list of past and present members and debenture holders, the name of all parties have been including the names of Mani, and his children. However, against their names it has been mentioned that they had effected transfer made by each as well as the date of registration of the transfers have been given as 21st May, 1985. (Ex. P-128). 36. On 1st March, 1986 in keeping with the statutory requirement relating to the ownership of newspapers, a statement was published in Form IV. In the list of shareholders the names of Madhusoodhanan, Ravi, Visakh Madhusoodhanan, Deepu Ravi, M.S. Srinivasan, Julie Mahusoodhana & Anju Srinivasan are mentioned . There is no mention of Mani or either of his children as shareholders (Ex.P-86). There was no protest by Mani or any of the other shareholders which would have naturally been made if the statements were incorrect. 37. Even after the ouster of Madhusoodhanan from the Board of Kerala Kaumudi, in the Annual Return dated 26 September, 1986 (Ex.P.128(a), in the list of shareholders filed with the Registrar of Companies as part of the Annual Return of Kerala Kaumudi, Mani shown as holding only one share and Madhusoodhanan as holding G12 shares in the company. This return has been filed under the signatures of Srinivasan and Ravi as Managing Director and Director of Kerala Kaumudi respectively together with a certificate by Ravi and Srinivasan under Section 161(2) of the Companies Act, 1956. They certified that the return states the facts as they stood on the day of the annual general meeting correctly and completely and that since the date of the last annual return the transfer of all the shares and debentures and the issue of all further certificates of shares and debentures had been appropriately recorded in the books maintained for the purposes. 38. This was again done in the Annual Return of Kerala Kaumudi filed under the signature of Ravi and Srinivasan dated 28th July 1987 (Ex.P 131(a). Madhusoodhanan is shown as holding 612 shares and Mani is shown as holding only one share. Under section 164 of the Companies Act, 1956, the annual returns, the certificates and statements therein, "shall be prima facie evidence of any matters directed or authorised to be inserted therein" under the Act. 39. The explanation given by Mani that he did not respond to the statutory declarations although they did not show his name or the names of his children as shareholders of Kerala Kaumudi because there was an agreement to transfer the shares and because of the close relationship between parties, is specious. According to Mani’s evidence, he had not agreed to transfer his shares at all because the consideration had not been fixed. Furthermore, the relationship between the parties was anything but cordial. It was only after Madhusoodhanan had initiated proceedings in 1986, that Mani, more than two years after the transfer for shares filed the application for rectification of the share register. 40. Even if there were any doubt on the issue, the fact which settles the matter conclusively are the admissions in the counter affidavit filed by Madhavi in C.P. No. 14 of 1986 on behalf of herself and on behalf of Ravi, Srinivasan and Mani (wherein Mani is referred to as the ‘fifth counter petitioner" and Madhusoodhanan as "the petitioner") she has affirmed. (a) "In fact the fifth counter petitioner left the company in the year 1985 and has transferred all the 390 shares belonging to him and his children (major daughter and minor son) to the petitioner, receiving only a miniscule part of a consideration and accepting the promise of the petitioner to pay him the balance without even insisting on formal documents to evidence the promise of the petitioner." (b) "Once Article 74 was amended to the petitioner’s liking, his attitude started changing slowly. Even then we did not take it seriously. That is why the fifth counter petitioner transferred his shares to the petitioner, giving him literally a strangle hold on the company".(c) "He (Mani) and his minor son had held 306 shares in the company which he had transferred to the petitioner in 1985".(d) "The petitioner holds 612 equity shares of Rs. 1000/- each of the company".41. Mani has also said in an affidavit affirmed on 28th November, 1986 in Application 305/86 (arising out of CP No. 14/86)."After the meeting was over the petitioner and respondents 2 to 5 that is, the mother and sons had informal talk in the same room. During the course of this, the second respondent asked the petitioner why he has not paid the balance consideration for shares transferred by me to him in 1985. The petitioner said that he would pay the same as and when he had money. The second respondentthereupon suggested that the petitioner may in that event transfer the shares back to him". 42. The one share which is shown in Mani’s name in the Annual Return for 1986 and 1987 was sold by Ravi to Mani at a meeting held on 26 August, 1986. As has been recorded in the minute (Ex. P-62(N) and affirmed in the same affidavit of Madhavi in C.P. No. 14/86 on behalf of Ravi, Srinivasan, Mani and herself: "The meeting of the Board of Directors held on 26th August, 1986 expressly considered the question whether the fifth respondent (Mani) is to be selected as one whom it is desirable in the interest of the company to admit to its membership. The Bard resolved that the fifth respondent (Mani) is not only a desirable person, but his admission to the membership of the company will enhance its prestige and strengthen its administration. The Board felt that in the circumstances it was essential that the fifth respondent (Mani) was to be inducted as a member of the company." 43. That he was "admitted" to membership and "inducted" as a member of the company by the transfer of one share on 26th August 1986 has been acknowledged by Mani himself in his affidavit affirmed in the same proceedings on 28 November 1986. 44. This admission to membership was in terms of Article 24(2) of the Articles of Association of Kerala Kaumudi, which directs that no share should be transferred to a person who is not a member so long as any member or any person selected by the Directors as one whom it is desirable in the interest of the company to admit to membership is willing to purchase the same at fair value. In other words a non-member of the company can be sold a share of the company even when a member wishes to purchase it, provided the Directors select him as "person whom it is desirable in the interest of the company to admit to membership" and provided that such person is willing to purchase the share. 45. If the transfer by Mani and his children of their entire shareholding in Kerala Kaumudi to Madhusoodhanan, had not been effected, there was no question of "admitting" Mani to the membership of the company. The minutes of the meeting held on 26 August1986 which have been admitted by Srinivasan and the affidavits of Madhavi and Mani thus prove that Mani and his family held no shares in the company until the single share was transferred by Ravi to Mani under Article 24(a) on 26th August, 1986. 46. We have been unable to understand the logic of the Division Bench by which it sidestepped this inevitable conclusion, when it said "It is open to a party to take an extra precaution to ward off possible disconcerting experiences while planning for the future." Ignoring- or at least not giving sufficient weight - to the wealth of evidence in favour of the submissions of Madhu or at least not giving sufficient weight - to the wealth of evidence in favour of the submissions of Madhusoodhan, the learned judges of the Appellate Court sought to base their assessment of the evidence on the absence of documents, such as income tax returns of Madhusoodhan, which according to them would have shown the acquisition of the additional shares by Madhusoodhanan from Mani, an exercise which was entirely uncalled for in the face of the positive evidence already on record and the repeated admissions of Mani and his group before the Court. 47. Furthermore, under Section 194 of the Companies Act, 1956, minutes of meetings kept in accordance with the provisions of Section 193 shall be evidence of the proceedings recorded therein and, unless the contrary is proved, it shall be presumed under Section 195 that the meeting of the Board of Directors was duly called and held and all proceedings thereat to have duly taken place. The onus was on Mani to disprove that the transfers had not taken place as recorded in the minutes of the Board meeting held on 21 May, 1985, an onus that has has singularly failed to discharge. Learned counsel for the Mani submitted that the statutory presumption was not available as Madhusoodhanan had admitted that no formal meetings were held and that the minutes were prepared after informal discussions by the Company Secretary and shown to Srinivasan who signed the same after it was approved by Madhusoodhanan. The submission is unacceptable for three reasons. First The Articles of Association of the Company (Art. 81) allow Directors to regulate their meetings as they think fit. Also Art. 89 says that a resolution in writing circulated to all the Directors and assented to by a majority of them shall be as valid as a resolution passed at a meeting of the Board of Directors. Second Section 193(1) of Companies Act 1956 provides. 193(1) Minutes or proceedings of general meetings and of Board and other meetings. Every company shall cause minutes of all proceedings of every general meeting and of all proceedings of every meeting of its board of directors or of every committee of the Board, to be kept by making within thirty days of the conclusion of every such meeting concerned, entries thereof in books kept for that purpose with their pages consecutively numbered." 48. Therefore, the minutes may be prepared subsequently, but they must be duly entered in the Minutes Book and initiated and it is nobody’s case that this was not done. Finally, Madhusoodhanan has also said that formal meetings were held and that important decisions were circulated to all members. In any event, our conclusion that the transfer of shares by Mani and his children to Madhusoodhanan would stand without the support of the statutory presumption under Section 195 of the 1956 Act. 49. Exhibit P-3, the third agreement which was referred to at the outset has a clause which relates to the sale of Mani’s shares in Kerala Kaumudi to Madhusoodhanan which both sides have referred to and relied upon but there has been no consensus as to the correct interpretation of the clause. This controversy is addressed in detail in connection with Madhusoodhanan’s suit for specific performance of the agreement. 50. Had this clause been the only basis on which this Court were called upon to decide whether there had been a transfer or sale of the shares of Mani’s group to Madhusoodhanan, no doubt it would have been difficult to determine what had in fact happened. However, the clause is only one of a series of documents, the authenticity of which cannot be disputed, which clearly show that the transfer had taken place although the exact consideration may not have been agreed upon or paid. 51. Mani did not attend the Board meeting held on 21ste May 1985 or any other till he was admitted to membership of Kerala Kaumudi on 26th August, 1986. Apart from this telling circumstances supporting Madhusoodhanan’s case, Srinivasan had attended and signed the minutes of the meeting on 21st May, 1985. His claim that no such meetings were in fact held and that whenever he signed the minutes of the meetings held during the managing directorship of Madhusoodhanan, he did so at the instance of the latter without being aware of the contents of the minutes is hardly likely. The brothers were already at daggers drawn and it is unbelievable that he would place such unquestioning faith in Madhusoodhanan. Additionally, the entries in the Attendance Register of Kerala Kaumudi (Ex. P-81) also belies this assertion. Besides, the falsity of this explanation is apparent from the minutes of the meeting held and the statutory records submitted by Srinivasan after Madhusoodhanan was removed as Managing Director of Kerala Kaumudi which continued to state that Mani and his children had transferred their shares in the company to Madhusoodhanan. 52. The fact that all the parties, including Ravi, Srinivasan and Mani himself, hardened businessmen all, not only proceeded on the basis that there was effective transfer of Mani and his children’s shareholding to Madhusoodhanan but also certified the same to the Registrar of Companies, and additionally affirmed that such transfer had taken place on oath in their affidavits can only lead to the conclusion that the transfer had been legally effected on the basis of duly executed share transfer forms in compliance with the provisions of the Companies Act, 1956. 53. Nevertheless, the respondents argue, there were in fact no share transfer forms which were placed before the Board and the only transfer forms executed by Mani and his children were invalid because of non-compliance with Section 108 of the Companies Act, 1956. 54. In his examination in chief, in response to the question, whether he and his children had transferred their shareholding to Madhusoodhanan, Mani said: "When I decided to relinquish may directorship, the Secretary brought the required for transferring our shares to the petitioner (Madhusoodhanan) were brought. But I found that the consideration column in those forms were not filled. Petitioner told me that the consideration can be fixed later and the transfer may be effected immediately. But I said that I will sign it only after fixing the consideration. Even so, in order to assure him that I will transfer the shares, I signed the forms and handed it over to my wife for keeping them in safe custody. I knew that if the matters were not finalised within 60 days the forms cannot be made use of thereafter. So I requested the petitioner several times to fix up the consideration. But he did not do so. I did not hand over the forms to the petitioner". 55. The admitted case therefore is that Mani and his children had agreed to transfer their shareholding to Madhusoodhanan, but according to them, such transfer never took place. Mani produced the share transfer deeds presumably from the custody of his wife as Exhibits R 9-12. Exhibit R 9 is signed on 11.5.1985. It is an unstamped document and purports to record the transfer of 222 shares by Mani to Madhusoodhanan. Similarly R.10 is a share transfer form signed by Valsa on 11.5.85 transferring 84 shares to Madhusoodhanan. The document bears stamps of the value of 720 rupees on the reverse. R11 is a share transfer form signed by Mani’s wife as a transferee recording the transfer of 84 shares by Sukumaran Mani to MS Mani. It is dated 11th May 1985. It is also bears stamps of the value of Rs. 720. R.12 is a share transfer form signed on 11th May 1985 by Mani transferring 84 shares to Madhusoodhanan. The document is signed on 11thMay 1985. All the share transfer forms bear the stamp of what appears to be of the office of the Registrar of Companies dated 20.4.85. All four exhibits show that they have been entered in the Register of Transfers of Kerala Kaumudi on 23rd May 1985 and bear the serial numbers 30, 33, 31 and 32 respectively. 56. There is a controversy as to whether these share forms were the share forms which were placed before, and approved by the Board of Directors of Kerala Kaumudi at the meeting held on 21st May 1986. Mahusoodhanan claims that these are not the share transfer forms. Mani and his group contend to the contrary. The issue would be importance if one were to allow the respondents to resile from their admissions. We are not minded to do so. Nevertheless, since the reasoning of the Division Bench rests to a large extent on the question whether the transfer was in accordance with S.108 of the Companies Act, it would be appropriate to pronounce on this. 57. Section 108 of the Companies Act, 1956 insofar as it is relevant provides: "A company shall not register a transfer of shares in, or debentures of the company, unless a proper instrument of transfer duly stamped and executed by or on behalf of the transferor and by or on behalf of the transferee and specifying the name, address and occupation, if any, of the transfer has been delivered to the company along with the certificate relating to the shares or debentures, or if no such certificate is in existence, along with the letter of allotment of the shares or debentures". 58. According to Mani, the share transfer forms were not duly stamped and could not be given effect to under Section 108 of the 1956 Act. If Exhibits R9 to R12 are indeed the share transfer forms, he would be correct, in our view they are, in all likelihood, not the transfer forms which were placed before the Board of Directors on 21st May 1985. 59. It is on record, that Madhusoodhanan had made an application for production of the original share transfer forms from the custody of the company. It must be remembered that from March, 1986, Madhusoodhanan no longer had any control over the affairs of Kerala Kaumudi. The papers, books and other records of the company were in the custody and control of those who controlled Kerala Kaumudi namely Srinivasan and Ravi. It is not improbable that the share transfer certificates which had been placed before the Board meeting were deliberately not produced. 60. The Division Bench held that exhibits R.9 to R.12 were the ‘real’ share transfer forms because they were dated 23.5.1985 and the evidence of Madhusoodhanan was that he had signed only one set of transfer forms in 1985. The Division Bench also relied upon what appears to be an unsigned stamp of the office of the Registrar of Companies dated 20th April 1985 although no one has pledged his or her oath to it. Having come to the conclusion that the share transfer forms produced by Mani, exhibits R.9 to R.12, were the "real" transfer forms, the Division Bench set about demolishing those documents as being invalid and not legally effective. 61. In our opinion, given the documentary evidence of completed transfers, it is more that probable that the ‘real’ share transfer forms were never produced by Mani and his group and that exhibits R.9 to R.12 were prepared in 1984 as claimed by Madhusoodhanan. Mani has himself stated. "At that time it was proposed to start Calicut edition of the paper. But the high technology machinery required for what further increased the debts of Kerala Kaumudi. This accused considerable financial strain. I put in some suggestions for rectifying these matters. But mother and brothers were not able to appreciate may views. Therefore, I even told them that I was prepared to relinquish all my shares, 1/3rd each to my brothers. In that connection some papers were also prepared". 62. The Calicut edition of Kerala Kaumudi was started in September, 1984. It is possible "these papers" were Exhibits R-9 - R-12. This inference is in keeping with the repeated admissions of the respondents on oath and their conduct on the basis that the transfer had legally taken place. An additional fact is Exhibit P18 which is a voucher for a cash payment of Rs. 2970/- issued to Kerala Kaumudi towards the "cost of share transfer stamp purchased". It is dated 16th May 1985 and signed by Madhusoodhanan, Srinivasan, Madhusoodhanan’s wife and Ravi’s wife as well as the cashier, the clerk, the accountant the manager and the Secretary of Kerala Kaumudi. The corresponding entries in the expenses account of Kerala Kaumudi which form part of this exhibit, show that the accounts of Mani and Madhusoodhanan have been debited with the amounts of Rs. 420/-0 and 1950/- respectively. It is improbable that stamps having been purchased for the share transfers which was recorded as effected four days later, they would not have been utilised. In this state of the evidence it cannot reasonably be held that Mani and his group have been able to establish that the transfer of the 390 shares by them to Madhusoodhanan was effected in violation of Section 108 or any other provision of the Companies Act, 1956. 63. The Annual Returns signed by Srinivasan and Ravi (Ex. P28, P130 and P-131 (a), statutory declarations (Exhibits P.86 to P.88) for the years ending on 1st March 1986, 1st March 1987 and 1st March 1988 also signed by Srinivasan and Ravi, the affidavit of Madhavi dated 25th November, 1986, the affidavit of Mani dated 28th November, 1986 and other documents in all of which repeated admissions were made by Madhusoodhanan’s antagonists that Mani and his children had transferred their shareholding to Madhusoodhanan were brushed aside by the Division Bench on the very weak explanation given by Mani as to why these repeated admissions had been made even after the filing of the litigation between the parties. The Division Bench erred in ignoring the affidavits of Madhavi and Mani by saying that it "would not be sufficient or strong enough to operate as a transfer of shares". Nobody can reasonably contend that a transfer of shares can be effected by mere assertion in an affidavit. What the Division Bench ought to have held was that all this evidence indicated that there were in existence duly executed share transfer forms prepared in conformity with the provisions of Section 108 of the Companies Act, 1956 which everyone had accepted and acted upon and which were deliberately not produced. 64. On the question of the invalidity of the transfers of Valsa and Sukumaran Mani to Madhusoodhanan, Valsa Mani was admittedly a major on 21st May, 1985. And yet the Division Bench held that Mani continued to stand in a fiduciary relationship with her and therefore "the transfer which purports to have been effected by Valsa Mani on her own will clearly indicate the stamp of illegality and invalidity". The reasoning is incomprehensible and unacceptable. Valsa was an adult and legally competent to enter into a contract of sale of her sharers to Madhusoodhanan which she duly did. 65. As far as the shares of Sukumaran Mani are concened in our opinion, the learned Single Judge was right when he said that Mani’s group could not question the transfer of the shares of Sukumaran Mani on account of his minority, as Sukumar Mani hasd not effected any transfer directly in favour of Madhusoodhanan. As Sukumaran Mani was at the relevant point of time a minor, his shares were transferred by his mother as guardian to his father, Mani, who had in turn transferred the shares to Madhusoodhanan. The Apepllate Court was wrong when it held that the transfer of the shares of Sukumaran Mani was "an absolute nullity in the eye of law" on the ground that the initial transfer by Sukumaran Mani was invalid because it was sought to be effected by Sukumaran Mani’s mother who was not his legal guardian and who ‘figured as a guardian only as a ruse for getting over the statutory provision". The transfer of Sukumaran Mani’s share through his mother to Mani has not been challenged. Therefore the issue of Sukumaran Mani’s minority and his mother’s competence to act as his legal guardian, were not issues which could be relevantly raised before, or decided by the appellate court. 66. Coming now the question of consideration, the Division Bench on an interpretation of Sec. 108 held that "the fixation of the price was a condition precedent, even in relation to an important and mandatory procedural formality like the payment of stamp duty to make the transfer lawful and proper". 67. We have already held that the relevant share transfer forms must be taken to have been duly executed. Although Mani and Madhusoodhanan had agreed to determine the actual consideration later, clearly some consideration was agreed to be shown on the share transfer forms. As noted, Exhibit R.18 produced by Mani’s group is a voucher for the cost of share transfer stamps. The stamps must have been purchased on the basis of the consideration which was shown on the share transfer forms at the prescribed percentage under the Stamp Act. 68. But it is also clear from the evidence on record that this was not the "actual" price which was to be determined consensually by Mani and Madhusoodhanan. On 19th January, 1985, Mani wrote a letter to Madhusoodhanan which has been exhibited as P-134. The letter states: "This is in continuation of discussion I had with you, regarding the sale of Flow line machine. Sheet-fed offset and the Cutting machine to me. My offer is Rs 3 lakhs for all the three machines. This amount may be deducted from the sale value of shares you owe to me. Kindly let me know your decision so that I can arrange to lift the machines". 69. Then we have the paragraphs from the affidavits of Madhavi and Mani quoted earlier which talk of the "balance consideration". 70. Finally is the lawyer’s notice dated 20.3.87 (Ex. P-83) sent on behalf of the Mani to Madhusoodhanan threatening legal action unless Madhusoodhanan paid "the balance sale consideration of Rs. 50 lakhs". "Since Mani had positively asserted that he must get a price between 50 and 75 lakhs, and that price negotiated was "in between the said figures". 71. Madhusoodhanan’s claim in this regard is inconsistent. At one stage the claimed that the consideration for the transfer was recorded in the transfer form. At another stage he said. "As far as transferring the shares is concerned, it is already transferred at the face value by fixing the proper stamps and the process have been completed. The excess amount I will pay on the shares will depend upon finally when he transfers the 3 shares to me, but I will not enter into a written agreement, I will continue to pay as and when the 5th respondent required money". "The only agreement was that whatever be and price paid for the shares, that should not be known to anybody else including our wives". 72. Madhusoodhanan has claimed that he in fact paid Rs. 10 lakhs to Mani. In his letter dated 28.7.86 written to Srinivasan. Madhusoodhanan had asserted (Exhibit P11) that he had paid Rs. 5 lakhs to M.S. Mani as part payment for his shares which had been purchased by Madhusoodhanan and that this brought the total payment made on this account to Rs. 10 lakhs. Mani contended that there was a total failure of consideration, a contention which was accepted by the Appellate Court. The truth appears to lie somewhere in between. 73. There is no dispute that the machines were in fact lifted by Mani, pursuant to Ex. P.1324. Exhibit R-14 evidences payment by Kerala Kaumudi of Rs. 3 lakhs to Madhusoodhanan for, ostensibly purchasing property at Cochin for Kerala Kaumudi. The Division Bench holds that "it is this money that is utilised for payment to Mani as part consideration of the shares to be transferred by Mani and his group". However, the Division Bench discounts this payment because "They very transactions itself may be open to serious challenge. The money of the company cannot be appropriated for a personal purpose of a person having a fiduciary capacity vis-a-vis the company". As a statement of law this is a doubtful proposition. Be that as it may, it is apparent that Mani received some consideration for the transfers although the consideration may have moved from Kerala Kaumudi to Mani. To sum up - the transfers by Mani and his children were effected validly to Madhusoodhanan.

Decision reasoning: 0[ds]27. The Division Bench, therefore, erred in holding that the agreement for transfer of shares was conditional on the determination of the price of the shares and in concluding that as there had been no such determination, no transfer could have taken place. The express intention was to effect an immediate transfer of the shares and to agree upon the consideration later. Section 9 of the Sale of Goods Act, 1930 permits this. [Ascertainment of Price :(1) The price in a contract of sale may be fixed by the contract or may be left to be fixed in manner, thereby agreed or may be determined by the course of dealing between the parties. (2) Where the price is not determined in accordance with the foregoing provisions, the buyer shall pay the seller a reasonable price. What is a reasonable price is a question of fact dependent on the circumstances of each particular cases.In this case, there can be no doubt that the first stage of the agreement for the immediate transfer of shares was executed and the Division Bench erred when it held to the contrary.We have been unable to understand the logic of the Division Bench by which it sidestepped this inevitable conclusion, when it said "It is open to a party to take an extra precaution to ward off possible disconcerting experiences while planning for the future." Ignoring- or at least not giving sufficient weight - to the wealth of evidence in favour of the submissions of Madhu or at least not giving sufficient weight - to the wealth of evidence in favour of the submissions of Madhusoodhan, the learned judges of the Appellate Court sought to base their assessment of the evidence on the absence of documents, such as income tax returns of Madhusoodhan, which according to them would have shown the acquisition of the additional shares by Madhusoodhanan from Mani, an exercise which was entirely uncalled for in the face of the positive evidence already on record and the repeated admissions of Mani and his group before theany event, our conclusion that the transfer of shares by Mani and his children to Madhusoodhanan would stand without the support of the statutory presumption under Section 195 of the 1956 Act.As far as the shares of Sukumaran Mani are concened in our opinion, the learned Single Judge was right when he said thatgroup could not question the transfer of the shares of Sukumaran Mani on account of his minority, as Sukumar Mani hasd not effected any transfer directly in favour of Madhusoodhanan. As Sukumaran Mani was at the relevant point of time a minor, his shares were transferred by his mother as guardian to his father, Mani, who had in turn transferred the shares to Madhusoodhanan. The Apepllate Court was wrong when it held that the transfer of the shares of Sukumaran Mani was "an absolute nullity in the eye of law" on the ground that the initial transfer by Sukumaran Mani was invalid because it was sought to be effected by Sukumaranmother who was not his legal guardian and who ‘figured as a guardian only as a ruse for getting over the statutory provision". The transfer of Sukumaranshare through his mother to Mani has not been challenged. Therefore the issue of Sukumaranminority and hiscompetence to act as his legal guardian, were not issues which could be relevantly raised before, or decided by the appellate court.There is no dispute that the machines were in fact lifted by Mani, pursuant to Ex. P.1324. Exhibit R-14 evidences payment by Kerala Kaumudi of Rs. 3 lakhs to Madhusoodhanan for, ostensibly purchasing property at Cochin for Kerala Kaumudi. The Division Bench holds that "it is this money that is utilised for payment to Mani as part consideration of the shares to be transferred by Mani and his group". However, the Division Bench discounts this payment because "They very transactions itself may be open to serious challenge. The money of the company cannot be appropriated for a personal purpose of a person having a fiduciary capacity vis-a-vis the company". As a statement of law this is a doubtful proposition. Be that as it may, it is apparent that Mani received some consideration for the transfers although the consideration may have moved from Kerala Kaumudi to Mani. To sum up - the transfers by Mani and his children were effected validly to Madhusoodhanan.93. Since the further resolution to delete Art. 74 formed no part of the notice of the Extraordinary General Meeting, which in all fairness it should have, we have no doubt in our minds that the special resolution on the basis of such defective notice is insupportable in law and cannot be given effect to. This finding is sufficient to hold that the deletion of article 74 of the Articles of the company was invalid and that therefore Madhusoodhanan continued to be the managing director of Kerala Kaumudi as claimed by him in CS 3/89.In the circumstances we hold that Madhusoodhanan and his group were not served with the notice dated 1.8.86. It is therefore unnecessary to decide whether the period prescribed in the notice to apply for the shares was too short or contrary to the Article of Association of Kerala Kaumudi.124. Once we have held that Madhusoodhanan and his group all of whom heldshares in KeralaKaumudi, were not given notice to apply for allotment of the additional shares, it must be held that the subsequent allotment of the shares to Ravi and Srinivasan at the meeting held on 8.8.86 and the affirmation of such allotment at the meeting allegedly held on 16.6.86 were vitiated thereby and invalid.As far as the question of consideration is concerned, we have already held that parties can agree to subsequently determine the price at which the were sold and section 9 of the Sale of Goods Act, 1930 expressly provides that such contracts are perfectly legal. Besides, the Karar in terms does not call upon parties to determine the consideration. All it says is that once the consideration was determined by Madhusoodhanan and Mani, it would be made known to the others. Since there was no such determination, there was no question of informing anyone. The finding that there was no determination of the consideration in respect of the inherited shares as a ground for holding that the Karar was not specifically performable is similarly incorrect as the determination of the price formed no part of the Karar.This section is an instance of such legislative clarity that it needs no paraphrasing to highlight its intent. The Division Bench was clearly wrong in its foray into the question of the value of the assets allotted under the Karar. It has, despite Explanation 1 to Section 20(2) refused specific performance of the Karar on one of the excluded grounds viz., inadequacy of consideration.Although the learned Single Judge in disposing of CP 26/87 gave directions for the appointment of Arbitrators, to determine the value of the shares, in our view it would be more appropriate to do so in decreeing the suit for specific performance of the Karar. It is also not clear from the material on record, in which of the brothers name 9 shares of the late Sukumaran and the 3 shares of Madhavi now stand. Who ever is recorded as the owner of the shares shall further transfer six of those shares to Madhusoodhanan.The explanation given by Laisa that she used to sign whatever papers had been sent by Madhusoodhanan is unbelievable. The Division Bench by relying upon a narrative in a biography of Norman Birkett (The Life of Lord Birkett of Ulverston by H. Montgomery Hyde) chose to accept it. According to Laisa herself, she had been a director of the company, operated the banking accounts and otherwise done whatever was necessary in the discharge of her duties as a director since 1972. As we have noted earlier, differences between the 4 brothers had been simmering for a long time which manifested itself in 1984. This was also noted by the Division Bench when it said, "in the year 1984, differences became somewhat apparent". In the circumstances,facile explanation, that she signed every document in 1985 because of her faith and trust in Madhusoodhanan is clearly false.162. The next reason given by the Division Bench for allowing the application for rectification was that the original share transfer deeds had not been produced. Madhusoodhanan had filed an application for production of the original share transfer deeds. He said that he could not produce the share transfer deeds because they were in the administrative office of KIPL and that he had been prevented from entering that office. That the administrative office of KIPL is within the Kerala Kaumudi premises in a separate room was also the finding of the Division Bench. Madhusoodhanan and isgrievance that they were being denied access tooffice since April, 1986 was not rejected by the Division Bench as not genuine. But the Division Bench observed "A mere alibi of inability to enter the office, cannot be accepted as a sufficiently strong reason for their grievous omission". This conclusion is as starting as it is unreasonable. For the reasons given earlier in connection with transfer ofshares in KeralaKaumudi, we are of the view that here also, the minutes and the other records of the company, which prima facie raise a presumption of their veracity, have not been sufficiently disproved by the evidence tendered on behalf of the petitioners in the application for rectification.The next reason given by the Division Bench for permitting rectification of the share register of KIPL was that no price had been fixed for the shares and that there were not even negotiations with parties regarding such fixation of price. This is, for reasons already stated, an incorrect statement of the law. Moreover, in this case there is the additional factor which has persuaded us to hold that the Division Bench was wrong, namely Article 16 of the Articles of Association of KIPL whichBoard of Directors shall fix price at which the shares for the time being forming part of the capital of the company may be purchased in pursuance of transfer notice and the price thus fixed shall be known as the ‘fairUntil the ‘fairhas been fixed as herein provided, a sum equal to the capital paid up on any share shall be deemed to be the fair value of such share".final conclusion that there had been a non-compliance with section 108 of Companies Act because there was no indication about any purchase of stamps or about the share transfer deeds having been duly stamped, is an exercise in speculation. The Articles of Association of KIPL themselves require compliance with section 108 before any transfer can be effected. When the minutes recorded that share transfer deeds had been placed before the Board, when the transfers were approved by the Board in the presence of the only witness for the petitioners, and when none of the documents which were duly maintained by the company recording the transfers of the shares had been disproved, we cannot uphold a finding that the share transfer deeds must have been improperly stamped or executed in violation of the provisions of Section 108 of Companiessee no reason to interfere with this finding of fact. It is true that the Division Bench proceeded on an erroneous basis then it held that the learned Single Judge had dismissed the application on the ground of delay. Since we have upheld the factual finding of the court of the first instance, this misreading of the Trialjudgment by the Division Bench is of no consequence.Logically the Division Bench should have also rejected the appeal preferred from the decree in CS No. 4/49. However, the Division Bench rejected the appeal on the sole ground that although KIPL had been denied access in 1986, the suit had been filed only in 1966. According to the Division Bench "The inaction for a period of two years can be taken to have resulted in the extinction of the present possession. If the plaintiff does not have present possession, injunction could not be an available relief". This nature piece of reasoning appears to proceed on the basis that the period of limitation for extinction of a possessory right is two years which it is not. Besides the claim of KIPL was that it was being denied access. The denial was s continuous one. It was therefore open to KIPL to file a suit while such denial continued by seeking to injunct the obstructers from continuing with the obstruction.evidence and the documents referred to hereinabove prove beyond a shadow of doubt, that the administrative office of KIPL was in Kaumudi Buildings. That is also the Division Bench has held. Having come to this conclusion the division bench erred grievously in denying KIPL the relief it claimed only on the ground of delay, as if what was being with by the Division Bench were an interlocutory application for interim relief.