In Brief
Mackintosh Burn Limited, a government-owned company, sought to prevent registration of 100 shares purchased by Sarkar & Chowdhury Enterprises, fearing loss of control and breach of confidentiality due to their business rivalry. The Company Law Board directed registration. On appeal, the High Court dismissed the challenge on a technical ground (limitation), without addressing whether conflict of interest and mala fide intent constituted sufficient cause for refusal. The Supreme Court held that 'sufficient cause' for refusing share transfer is not limited to illegality but includes conflict of interest and mala fide intentions. The High Court erred in considering only the limitation question instead of all legal issues raised. The matter was remitted to the National Company Law Tribunal for fresh consideration of the substantive questions.
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