MIS. JOHN TINSON AND CO., PVT. LTD. AND ORS. ETC. versus MRS. SURJEET MALHAN AND ANR. ETC.

Citation: [1997] 1 S.C.R. 842 · Decided: 03-02-1997 · Supreme Court of India · Bench: K. RAMASWAMY, G.T. NANAVATI · Disposal: Dismissed

Judgment (excerpt)

A 
MIS. JOHN TINSON AND CO., PVT. LTD. AND ORS. ETC. 
B 
v. 
MRS. SURJEET MALHAN AND ANR. ETC. 
FEBRUARY 3, 1997 
(K. RAMASWAMY AND G.T. NANAVATI, JJ.) 
Contract Act, 1872: S. 25(1)-Shares in the name of wife-Husband 
transferring the shares to third party without wriUen authority from wife-Held: 
Plea of Implied consent rejected-Transfer invalid-Transfer for a considera-
C tion of Re. 1 only-In the eye of law, this is no consideration and hence the 
trans[ er agreement itself is void. 
D 
E 
F 
G 
H 
Balloishan Gupta v. Swadeshi Polytex Ltd., [1985] 2 SCC 167, distin-
guished .. 
Vasudev Ramchandra Shelat v. Pranlal Jayanand 1)1akar & Ors., 
[1974] 2 SCC 323 & M.P. Barucha v. W. Sarabhai & CO., 53 (IA) 92, held 
inapplicable. 
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 737-38 of 
1997. 
From the Judgment and Order dated 14.11.96 of the Himachal 
Pr<idesh High Court in R.F.A. Nos. 230-31 of 1985 . 
. .. 
P.N. Lekhi, R.K. Chadha and Praveen Jain for the Appellants. 
Soli .J. Sorabjee, Ms. Suruchi Agarwal and Mrs. Pratima Malhotra 
for the Respondents. 
The following; Order of the Court was delivered : 
Leave granted. We have heard learned counsel on both sides. 
These appeals by special leave arise from the judgment of the 
Division Bench of the High Court of Himachal Pradesh, made on Novem-
ber 14, 1996 in RFA Nos. 230 and 231of1985. 
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The admitted position is that the respondents, Mrs. Surjeel MalhaiP 
and Mr. B.K. Malhan, wife and husb:.md respectively, laid two suits for 
842 
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JOHN TINSON AND CO. v. MRS. SURJEET MALHAN 
843 
declaration and permanent and mandatory injunction. The learned single A 
Judge of the High Court dismissed the suits. But on appeal, the Division 
Bench has decreed the suits. Thus, these appeals by special leave. 
The first respondent, Mrs. Surjeet Malhan, held 1500 shares in total 
- 900 in her name and 600 in the name of other relatives - and 10 
preferential shares. The second respondent, B.K Malhan, had held 2230 
ordinary shares -and 64 preferential shares. It would appear that there was 
an agreement between B.K. Malhan and Shri R.D. Bhagat, the appellant 
for transfer of the shares and completion of the transaction to put on rails 
the company which was running in losses. It would appear that· as per the 
agreement, subsequent transactions were to be completed and in fur-
therance thereof, it appears that the shares, admittedly, were entrusted to 
Mr. Bhagat with a blank transfer form. Thereafter, the disputes arose 
between them. It consequence, the suits came to be laid by the respondents 
against the appellants. 
B· 
c 
D 
The principal contention raised by Shri P.N. Lekhi, learned senior 
counsel for the appellant, is that Mrs. Malhan had admitted in her evidence 
that her husband had delivered her shares to Bhagat and that she never 
objected to the transfer and that, therefore, there was an implied consent 
for the transfer of her shares in favour of Bhagat. Equally, it is contended 
that when B.K. Malhan had transferred the shares, though they were not E 
registered with the previous consent of the Board of Directors and they 
were not duly registered in the register maintained by the Registrar in that 
behalf, there was a complete transaction; the Division Bench, therefore, is 
not right in reversing the judgment of the single Judge. We find no force 
in the contentions. 
F 
There should be consensus ad idem for a concluded contract and it 
is seen that Section 25(1) of the Contract Act contemplates that when a 
transfer is without consideration, it is a void contract. It is an admitted 
position that there is no concluded contract between Smt. Surjeet and G 
Bhagat. The acquiescence did not amount to consent unless Smt. Surjeet 
Malhan expressly authorised her husband to transfer her shares. The 
transfer as contemplated in this case is only for a sum of Re 1. As a 
consequence, in the eye of law, there is no consideration and, therefore, 
the transfer agreement is void. The question then is : whether the wife had 
consented to the transfer? It is an admitted position that she had not given H /, 
.-( 
844 
SUPREME COURT REPORTS 
[1997] 1 s. C.R. 
A authority by any letter in writing or otherwise to her husband to transfer 
her shares in favour of Mr. Bhagat. Shri Lekhi sought to rely upon a 
judgment of this Court in Vasudev Ramchandra Shelat v. Pranlal Jayanand 
Thakur & Ors., [1974] 2 SCC 323 in which the Privy Council judgment 
B 

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