AIR 1964 SUPREME COURT 250

Supreme Court Of India

(From Calcutta :64 Cal WN 591)

Hon'ble Judge(s): Ajit Kumar Sarkar, M. Hidayatullah, J. C. Shah , JJJ

Companies Act (1 of 1956) , S.75(1)— Allotment - Meaning of - Re-issue of forfeited shares is not allotment - No question of filing any return arises in such case - Provision of S. 75(5) is ex abundanti cautela - S. 75(1) to be interpreted without reference to S. 75(5). In Company law allotment means the appropriation, out of the previously unappropriated capital of a company, of a certain number of shares to a person. Till such allotment the shares do not exist as such. It is on allotment in this sense that the shares come into existence. It would be impossible to give to the word "allotment" in S. 75(1) a different meaning.(Para 8) Articles 22, 24, and 27 of the Article of Association of Calcutta Stock Exchange Association Ltd. dealing with forfeiture of shares are valid. The company could validly forfeit shares in terms of these articles. The reason why the forfeiture was valid was that on such forfeiture all that happened was that the right of the particular shareholder disappeared but the share considered as a unit of issued capital continued to exist and was kept in suspense until another shareholder was found for it. When a share is forfeited and reissued it is not "allotment" in the sense of appropriation of share out of the authorised and unappropriated capital so as to being the shares into existence. Q....