Wan Suleiman FJ

(delivering the Judgment of the Court): The appellant had sought by notice of motion an order under section 162 of the Companies Act 1965 to rectify the Register of Members of the respondent company by striking out the name of the First Nominees (Pte.) Ltd., and in lieu thereof to substitute the name of the appellant as holder of 10,000 shares in the company.

The respondent company was incorporated in 1971 under the Act with an authorised capital of $3,000,000 divided into 30,000 shares of $100 each. The appellant obtained by transfer to him 10,000 shares in the respondent company from the First Nominees (Pte.) Ltd. on April 12, 1983.

On June 12, 1982, appellant lodged the transfer together with 11 share certificates for the 10,000 shares to the Company Secretary for the purpose of registration. In reply the respondent company sent a letter dated September 21, 1982, and received by the appellant on September 30, 1982, that the Board of Directors, in exercise of their discretion under Article 32 of the Company's Articles of Association had declined to register the transfer.

The abovementioned Article 32 reads:—

"32. The Directors may in their absolute discretion and without specifying any reason therefor decline to register any transfer of shares whether fully paid or not and whether in favour of an existing Member or not. The Directors may also refuse to register any transfer of shares on which the Company has a lien."

In the Court below and again before us the appellant's stand was that the Directors of the Company in refusing to register the transfer had not exercised their discretion reasonably and in good faith and that in any event their discretion had been lost by unreasonable delay because they took more than 3½ months to send the notice of refusal to him contrary to the requirement of s. 105 of the Companies Act.

The learned Judge held that in the circumstances pertaining to this particular case the directors' discretion had not been lost by the delay in sending the notice of refusal, and dismissed the motion with costs.

Whilst this right to refuse the registering of a. transfer without specifying any reason was not disputed, Mr. Anantham for the appellant argues that it is subject to what is provided in s. 105 of the Act and Article 33.

That section reads as follows:

"105.(1) If a company refuses to register a transfer of any shares debentures or other interest in the company it shall, within one month after the date on which the transfer was lodged with it, send to the transferor and to the transferee notice of the refusal.

(2) If default is made in complying with this section the company and every officer of the company who is in default shall be guilty of an offence against this Act."

"33 If the Directors refuse to register a transfer of any share, they shall within one month after the date on which the transfer was lodged with the Company send to the transferee notice of the refusal, as required by Section 105 of the Act."

Mr. Anantham submits that the decision in Re Swaledale Cleaners Ltd [1968] 3 All ER 619 applies here.

Swaledale Cleaners Ltd., a private company, was incorporated in 1946 with an authorised and issued capital of ten thousand shares of £1 each. The company's articles incorporated, with certain variations Table A of the Companies Act, 1929. Article 8 provided that the directors might refuse to register any transfer of shares and that cl. 19 of Table A should be modified accordingly. Clause 19 contained the following provision which was not altered by the articles; "If the directors refuse to register a transfer of any shares, they shall within two months after the date on which the transfer was lodged with the company send to the transferee notice of the refusal." A corresponding provision was re-enacted in s. 78(1) of the Companies Act, 1948. By Clause 82 of Table A, the quorum necessary for the transaction of the business of the directors was two, and cl. 83 provided that the con