Firm's shares not saleable securities

Mrs. Justice Sujata Manohar of the Bombay High Court has ruled that the shares of a private limited company are not "marketable securities" within the meaning of the Securities Contracts (Regulation) Act. The judge held so while decreeing a suit for the recovery of the price of shares of A. MacRae and Company Private Limited. The defendants claimed the contract was illegal and that they had suffered damages due to undisclosed tax liabilities. However, the judge noted that the word "marketable" implies an ease in selling and a high degree of liquidity, which private company shares do not possess. Ultimately, the court rejected the claim for a reduction in price and decreed the suit against the defendants.

You may find interesting

The government of India have appointed a Controller and a Deputy Controller of Capital issues in place of the Examiner and Deputy Examiner, respectively. The Controller and Deputy Controller will exercise the same powers in regard to capital issues as were exercised by the Examiner and his deputy immediately before the Capital Issues (Continuance of Control) Act, 1947, took effect.

The government has decided to renew the recognition of the Delhi Stock Exchange Association Ltd. under Section 4 of the Securities Contracts (Regulation) Act, 1956.

With the Shroff Committee's report on short-term finance for the private sector due soon, there is speculation among small and medium industries regarding their status in the recommendations. Banks have shown some inclination to modify their orthodox policy towards industrial banking, but with many conditions. It is accepted that checking unemployment largely hinges on the assistance these industries receive, as they have the largest scope for providing fresh employment. While the overall economy shows encouraging features, new industries have been few, and many smaller units have closed down due to lack of finance. Mr. S. G. Sathe is afraid new high-denomination notes may bring several evils, including internal unsocial activity and easy escape out of India to smuggle scarce and banned commodities