(1) SPECIAL leave granted.

(2) THIS appeal by special leave has been preferred against the judg- ment dated 4/05/1988 of a division bench of the Calcutta High court in Appeal No. 806 of 1987. Facts in brief necessary for consideration of the submissions made by learned counsel for the parties are that the respondent, Pradip Kumar Sarkar made an application under Section 155 of the Companies Act, 1956 (hereinafter referred to as the Act) for rectification of the share register of the appellant-company by inserting his name therein as a registered shareholder of certain shares transferred in his favour. These shares were fully paid up and the company had no lien over them. According to the respondent, notwithstanding the shares being duly lodged with the company along with the transfer deeds and requisite fees for registration being paid the Board of Directors of the Company disapproved of the registration of the said shares. This dis- approval led the respondent to make the application under S. 155 of the Act for rectification of the share register. The case of the respon- dent was that the shares in question being fully paid up and the company having no lien over them the registration of the transfer of the shares in his favour could not be refused under Article 39 of the Articles of Asso- ciation of the company which was the article relevant for the purpose.

(3) THE application aforesaid was contested by the company on various grounds. Overruling the objections raised by the company a learned Single Judge allowed the application. Aggrieved, the company preferred the appeal aforesaid before a division bench of the High Court which has been dismissed by the judgment appealed against.

(4) IT has been urged by learned counsel for the appellant that even if the Articles of Association do not make any specific provision in this behalf the company had residuary inherent power to refuse registration of the transfer of the shares for the benefit of the company and its exist- ing shareholders. Power of refusal to register the transfer of shares was also sought to be derived from the words "or otherwise" used in Article 42 of the Articles of Association and S. 111(2 of the Act. The transferor not being made a party to the application under S. 155 of the Act was also pleaded in justification of the submission that the said application deserved to be dismissed. It was also urged that in view of Section 108 of the Act the company was entitled to go into the question as to whether the consideration for transfer of shares as shown in the transfer deeds was real consideration for purposes of finding out as to whether the transfer deeds were duly stamped and refuse registration of the transfer of the shares if the company was of the view that the transfer deeds were not duly stamped. For the respondent on the other hand it was urged by his learned counsel that in view of the specific provision contained in this behalf in Article 39 of the Articles of Association and no residuary power whatsoever having been conferred on the company or its Directors to refuse registration of the transfer of shares it did not have the power claimed by it in aid of refusal of registration of the shares transferred to the respondent.

(5) HAVING heard learned counsel for the parties we are of the opinion that unless there is any impediment in the transfer of a share of a public limited company, such as the appellant, a shareholder has the right to transfer his share. Correspondingly, in the absence of any impediment in this behalf the transferee of a share, in order to enable him to exercise the rights of a shareholder as against the company and third parties, which is not possible until the transfer is registered in the companyS register, is entitled to have a rectification of the share register of the company by inserting his name therein as a registered shareholder of the share transferred to him. To have such rectification c