JUDGMENT :

Shah J. - (along with S. K. Das, Kapur, and Venkatarama Ayyar, JJ.) M/s. Harinagar Sugar Mills, Ltd. is a public limited company incorporated under the Indian Companies Act 7 of 1913. Article 47B of the Articles of Association of the company invests the directors of the company with absolute discretion to refuse to register any transfer of shares. That Article is in the following terms :

"The directors may in their absolute discretion and without giving any reason refuse to register any transfer of any shares whether such shares be fully paid or not. If the directors refuse to register the transfer of any shares, they shall within two months, after the date on which the transfer was lodged with the company, send to the transferees and the transferor notice of the refusal."

2. One Banarasi Prasad Jhunjhunwala is the holder of a block of 9500 fully paid up shares of the company. In January 1953, he executed transfers in respect of 2500 out of those shares in favour of his son Shyam Sunder and in respect of 2100 shares in favour of his daughter-in law Savitadevi and lodged the transfers with the company for registration of the shares in the names of the transferees. The direct