JUDGMENT

1. A firm, known as Sawan Mal-Gopi. Chand, sold 20 shares of the Lahore Bank, Limited, worth Rs. 2,00,0 to Shiv Charan Das on the 12th or 13th September, 1913. They had paid only Rs. 100 to the Bank on account of the said shares up to that time and a sum of Rs. 8 was due to them as dividend. They sold the shares for Rs. 80 only and it was agreed that the defendant would be entitled to receive the dividend. A deed of transfer was duly executed and signed by the parties and was made over to the defendant to enable him to have his name registered in the books of the Bank in place of Sawan Mal-Gopi Chand. In November, 1913, however, the Bank failed and went into liquidation before the transferee had presented his deed of transfer to the Bank and thus the shares continued to stand in the name of Sawan Mal-Gopi Chand as before. It may be mentioned that the sum of Rs. 80 had not been paid by the defendant at the time of the transfer. In October, 1916, about three years after the above transaction, Sawan Mal-Gopi Chand brought a suit against Shiv Charan Das for the recovery of Rs. 80 as the price of the shares sold, and for establishing that the defendant was liable for any demands that the liquidators of the Bank may make from the person owning the said shares. The suit was described as one for specific performance of a contract. The defendant denied having entered into the contract and pleaded that the suit was barred by time and that the contract could not be specifically performed. The trial Court held that the suit was within time, bub that the transfer of the shares was not complete, because it required the sanction of the Bank and that, therefore, the contract could not be specifically enforced. The plaintiff appealed against this decision and the learned District Judge upheld the decision of the Court of first instance and dismissed the appeal. The plaintiffs have now preferred a second appeal to this Court and we have heard Mr. M.S. Bhagat on their behalf and Mr. M.N. Mukerji for the respondent. It was noticed that the memorandum of appeal was insufficiently stamped and the appellants have made good the deficiency.

2. It has been found as a matter of fact that a deed of transfer selling the 20 shares was drawn up between the parties and handed over to Shiv Charan Das. He has failed to produce that deed in Court and the production of secondary evidence as to that deed has, therefore, been permitted and it is proved that the transfer did take place. The only point in dispute in the case is, whether in the eye of the law this transfer amounted to a complete transaction binding on the parties or not. Mr. Bhagat draws our attention to Section 44 of the old Act VI of 1882, which corresponds to Section 28 of the present Indian Companies Act VII of 1913, and provides that the shares of any member in a Company shall be moveable property, transferable in manner provided by the Articles of the Company. The Articles of Association of the Lahore Bank, Limited, are on the record, and provide for a transfer of shares in the Company in a form prescribed in Article 30. He urges that the shares were transferred by his clients according to law and nothing further remained to be done by them. He relies on a note given under Section 34 of Mr. Ranga Chariar's Indian Companies Act, which says that the transferor is only bound to execute a valid transfer and hand it to the transferee and that there is no warranty on his part that the Company will accept the transferee, nor is the transferor under any obligation to get the transfer registered. He argues, therefore, that, according to this test, the contract as between his clients and Shiv Charan Das was quite complete and, though it was open to the Company to refuse to register the name of the transferee in place of the transferor, such refusal could not render the sale incomplete. He goes on to say that if such refusal had taken place and the Bank had given any reasons for its refusal it woul