Saturday, April 11, 2009

Companies Act_Practical Problems_73

Vivek purchased 5,000 equity shares of Prosperous Ltd. and lodged the same for transfer with the company. The company returned these shares under objection that the share transfer stamps affixed on the transfer deed were not cancelled. Vivek thereafter cancelled the stamps and re-lodged the shares for transfer. At this time, the company effected the transfer and returned the duly transferred shares to Vivek. In the meantime, the market price of the shares went down substantially. Vivek filed a case against the company claiming that, due to unwarranted objection raised by the company, he was deprived of the profits which he could have earned by disposing of the shares at higher price. State with reasons whether the claim of Vivek is tenable.

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