BHAGWATI DEVELOPERS PVT. LTD. versus PEERLESS GENERAL FINANCE & INVESTMENT COMPANY LTD AND ANR.

BHAGWATI DEVELOPERS PVT. LTD. versus PEERLESS GENERAL FINANCE & INVESTMENT COMPANY LTD AND ANR.

The Supreme Court held that the provisions of the Securities Contracts (Regulation) Act, 1956 apply to unlisted shares of public limited companies, and the contract for transfer in question was not a spot delivery contract due to delayed payment of consideration; thus, the transfer was in violation of Sections 13 and 16 and the appeal must fail.

Parties
Appellant: Bhagwati Developers Pvt. Ltd.; Respondent No. 1: Peerless General Finance & Investment Company Ltd.; Respondent No. 2: Tuhin Kanti Ghose
Jurisdiction
India
Judgment Date
15 July 2013
Procedural Posture
Civil Appeal / Supreme Court Final Decision
Outcome
Appeal dismissed
Legal Topics
Share Transfer, Securities Contracts Regulation Act, Spot Delivery Contract, Marketability of Shares
Company Law Securities Law Share Transfer Securities Contracts Regulation Act Spot Delivery Contract Marketability of Shares

Case Brief

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Parties

Bhagwati Developers Pvt. Ltd.

Appellant

Peerless General Finance & Investment Company Ltd.

Respondent No. 1

Tuhin Kanti Ghose

Respondent No. 2

Procedural Posture

Civil Appeal / Supreme Court Final Decision

Legal Issues

  1. 1 Whether provisions of Securities Contracts (Regulation) Act, 1956 apply to shares of a public limited company not listed on any stock exchange
  2. 2 Whether the contract in question qualifies as a spot delivery contract

Ratio Decidendi

The Supreme Court held that the provisions of the Securities Contracts (Regulation) Act, 1956 apply to unlisted shares of public limited companies, and the contract for transfer in question was not a spot delivery contract due to delayed payment of consideration; thus, the transfer was in violation of Sections 13 and 16 and the appeal must fail.

Court Disposition

Appeal dismissed

Orders

  • No order as to costs