| Citation(s) |
|---|
| 2003 SLG 2856 2003 SLD 2856 2003 CLD 183 |
Supreme Court of Pakistan
Civil Petition No.86 K of 2000, decision dated: 10-07-2002.
SYED DEEDAR HUSSAIN SHAH, HAMID ALI MIRZA AND ABDUL HAMEED DOGAR,
Kamal Azfar, Advocate Supreme Court with Ahmadullah Faruqi, Advocate on-Record for Petitioners. A.I. Chundrigar, Advocate Supreme Court and M.S. Ghaury, Advocate on-Record for
Respondents Nos. 1 and 2.
Civil Petition No.86 K of 2000, decision dated: 10-07-2002.
SYED DEEDAR HUSSAIN SHAH, HAMID ALI MIRZA AND ABDUL HAMEED DOGAR,
Kamal Azfar, Advocate Supreme Court with Ahmadullah Faruqi, Advocate on-Record for Petitioners. A.I. Chundrigar, Advocate Supreme Court and M.S. Ghaury, Advocate on-Record for
Respondents Nos. 1 and 2.
others ers
VS
. Miss MAHENAU AGHA and 8 others --Respondents Lal Khan v. Ghulam Muhammad 1973 SCMR 252 and Ladli Prasad Jaiswal v. The Karnal Distillery Co. Ltd. PLD 1965 SC 221 ref.
Law:
Section:
(a) Companies Ordinance (XLVII of 1984) -- Ss. 26, 27 & 28 Articles of association Object and Scope Articles of Association of a company are terms contract between the members and the terms are legally binding upon the members Such right is enforceable in law provided the terms are not forbidden bylaw. Rayfield v. Hands and others (1958) 2 WLR 851 and In re: Hartley Baird Ltd. (1955) Ch. 143; (1954) 3 WLR 964; (1954) 3 All ER 695 ref. (b) Companies Ordinance (XLVII of 1984) - S. 2(28) Transfer of shares of private limited company Principles Transfer of shares in any manner otherwise pan that provided in Articles of Association would be valid and contrary to the terms of contract agreed upon by the members of the company/shareholders. Hickman v. Kent and Romney Marsh Sheepbreeders' Association (1915) 1 Ch. 881 ref. (c) Ordinance (XLVII of 1984) Ss. 2(28) & 89 Transfer of shares of private limited company Inclusion of pre emptive right for transfer and purchase of shares in Articles of Association Validity --Such restriction is legal and valid covenant in the Articles of Association. Ontario Jockey Club Ltd. v. Samuel McBrdie AIR 1928 PC 291; Introduction Company Law by L.H. Leigh, V. H. Joffe and D. Goldberg, Second Edn., p.266 and The Principles of Modern Company Law by LCB Gower, Third Edn., pp.392 393 ref. (d) Companies Ordinance (XLVII of 1984) Ss. 2(28) & 89 Constitution of Pakistan (1973), Art.185(3) Transfer of shares of private limited company¬---Pre emptive right of existing shareholders/Directors of the company No objection by State Bank of Pakistan to sell the shares Defendants without offering his shares to the existing shareholders/Directors of the company sold the same to third party Plaintiffs assailed the sale of shares on the ground that they were willing to purchase the shares but no notice as required by Articles of Association of the company, had been given either to the Secretary of the company or to them High Court in exercise of original civil jurisdiction dismissed the suit but Division Bench of High Court allowed the appeal and suit was decreed in favour of the plaintiffs Plea raised by the defendants was that the shares were…
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