A gift of shares is complete and valid even though the transfer is not registered in the company's books.

SUHAS CHANDRA SEN, J.

( 1 ) THIS is an appeal from a judgment dated August 17, 1982. The facts of this case are a little unusual. A suit was filed by Smt. Sheila Devi Chamaria against Bajranglal Khemka, Tarachand Saraogi, Ram Kumar Sakseria, Sundarlal Nahata, Suganchand Saraogi, Champalal Jain, Smt. Gomti Sethani, Smt. Sabitri Dhandhania, Bijoy Kumar Dhandhania and East India Film Co. Pvt. Ltd. , a company incorporated under the Companies Act, for declaration that the plaintiff was the owner of 900 equity shares of East India Film Co. Pvt. Ltd. and for a decree directing rectification of the share register of the company by inserting the plaintiff's name in respect of those shares. After the suit was instituted, a written statement was filed on behalf of the defendants. It appears that there were protracted litigation between the parties in other proceedings. But ultimately when this suit came up for hearing, the defendants chose not to contest the suit. The propounders of the will of Motilal Chamaria, defendants Nos. 1 and 2, were dead at the time the suit was taken up for hearing. The advocate-on-record on behalf of defendants Nos. 3, 4, 5 and 6 stated in court that he had no instructions in the matter and took leave to retire from the suit. Nobody appeared on behalf of defendants Nos. 7, 9 and 10. Mr. P. L. Kedia appeared on behalf of defendant No. 8 and submitted that he had no instructions in the matter.

( 2 ) UNDER these circumstances, the case was taken up for hearing without any contest. Evidence was given in this case by the plaintiff and also by one Indrajit Raikhy, an employee of Swastika Construction Firm. It has been stated in the plaint by the plaintiff that she married Motilal Chamaria on April 5, 1953, according to Hindu rites. Motilal was the beneficial owner of the entire issued share capital of East India Film Company Private Limited. Out of 900 shares issued by the company, 875 shares were held by Motilal in his own name : 10 shares each stood in the names of Harilal Banerjee and Tarachand Saraogi and 5 shares stood in the name of Champa Lal Jain. It is the case of the plaintiff that Harilal Banerjee, Tarachand Saraogi and Champalal Jain were mere benamidars of Motilal. It is the further case of the plaintiff that Motilal made a gift of the said 900 shares to the plaintiff. The share certificates were handed over to the plaintiff along with a blank transfer form duly signed by Motilal. It was agreed between Motilal and the company that the shares would be transferred to the name of the plaintiff in the books of the company after the death of Motilal; but the entire dividend had to be paid to the plaintiff and the dividend was accordingly paid to the plaintiff on the 900 shares even during the lifetime of Motilal. This arrangement was confirmed by a writing on or about January 8, 1961, and that writing is set out in annexure " A " to the plaint. Motilal Chamaria died intestate on June 22, 1967. The plaintiff's case is that after the death of Motilal, the company has not rectified the share register by inserting the name of the plaintiff as the holder of the said 900 shares nor has the company returned the share scrips to the plaintiff. The plaintiff prayed for declaration that she was the owner of the said 900 equity shares of the defendant company as well as a direction for rectification of the share register.

( 3 ) THE plaintiff stated in her deposition that Motilal during his lifetime held 875 shares in the company in his own name; but the other 25 shares which stood in the name of his employees also belonged to him. The consideration money for the shares was paid by Motilal and the benamidars did not get any dividend at all. The plaintiff also stated that at the beginning of January, 1961, Motilal handed over the share scrips to the plaintiff as well as the transfer deeds in the presence of Sushil Kumar Haldar and Mr. Raikhy. Motilal told the plaintiff that she was the actual owner of the shares. She a

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