Law: Companies Ordinance, 1984

Section: 74

Companies Ordinance (XLVII of 1984)--Ss. 74 & 476--- Allotment of shares--- Transfer of shares---Limitation of time for issuance of certificate---Complaint was lodged with the Commission regarding non-receipt of shares from the company after being held successful in the share balloting---Commission found that company had prima facie contravened the provisions of subsection (1) of S.74 of the Companies Ordinance, 1984 and a fine of Rs.5,000 was imposed on each Director including the Chief Executive of the company---Validity---Company had allotted 500 shares under allotment letter in the name of the complainant and said shares later on were transferred through a verified transfer deed in the name of the transferee---Company had sufficient record to prove that the complainant was once the legal owner of the shares which were received and subsequently were sold for value---Issue was about 20 years old---Since the allotment of shares, the complainant had never attempted to communicate with the company regarding her holding and other ancillary matter such as dividend and right shares---Due diligence was carried out before transferring the said shares in the name of the transferee---Complainant had renounced her shares in favour of the transferee who had the subject allotment letter as well as a transfer deed---Under provisions of S.74(1) of the Companies Ordinance, certificates were required to be issued to the shareholders within 90 days of the date of allotment---Ample evidence was available that the company had allotted the shares under allotment letters in the name of the complainant and the share certificates were in fact issued---Penalty should not have been imposed on the ground that the company had failed to produce documentary evidence pertaining to receipt of the share certificates where the shares had been duly transferred after allotment to the complainant in the name of the transferee through transfer deed---Issue relating to verification of signatures or dispute about fraudulent entry or omission from the register of members of the company could not become the subject of dispute before the Commission, as the jurisdiction to decide such issues rested…

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