Forfeiture and Surrender of Shares

Introduction:

Forfeiture of shares alludes to the circumstance where the distribution of shares is dropped for the investors because of the non-payment of instalment of any portions. As opposed to that, surrender of shares happens when investors return the shares to the company for crossing out.

Surrender of shares is an alternate way system to stay away from the Forfeiture of shares. Shares that have the chance of being relinquished due to defaulting in instalments can be willfully given up by the investors.

Such a surrender of shares can be acknowledged by the company in case there is an arrangement for such a plan in the Articles of Association (AOA) of the company.

Forfeiture of Shares	Surrender of Shares
Definition
Forfeiture of shares refers to the cancellation of allotment of shares to the shareholders by the company due to non-payment of instalments (application money or call money)	Surrender of shares refers to the voluntary act of surrender of shares by the shareholder for cancelling the allotment of shares
Type of Action
It is a compulsory action	It is a voluntary action
Initiated by
Company	Shareholder
Reason
Forfeiture occurs due to the non-payment of call money	Surrender of shares occurs due to the inability of a shareholder to pay the call money
Time Taken
Forfeiture of shares takes a long time to settle	Surrender of shares is a relatively quicker process
Impact on Reputation
Forfeiture of shares impacts the reputation of the shareholders as it is a penalty that is charged on the shareholders due to non-payment of instalment money	Surrender of shares does not create issues with a reputation as it is a voluntary act by the shareholder

Forfeiture and surrender of shares are discrete ideas that produce completely various outcomes. In relinquishment, the company starts the procedures. In surrender, it is the investor who is the initiator. There is little uncertainty that a company has no innate power to relinquish portions of a delinquent investor. At the point when it has the force, the company should get it straightforward from a rule or the instrument making it or its guidelines. Both the Dominion and the Ontario company’s acts make arrangements for the forfeiture of shares for non-payment of instalment. Be that as it may, on the issue of surrender there is less assurance whence the ability to acknowledge a surrender is inferred. The forces are not legal, not even in the English company’s acts. The cases appear to be clear, nonetheless, that a company may by uncommon goal give itself the ability to acknowledge gives up. However, this force may exist, the law gives certain exceptionally distinct impediments upon its activity.

Illustration 1

Assume Mr. A purchases 100 portions of a company however for the time being the company requests that he pay just half of that sum. The company makes an arrangement with Mr. A that at whatever point is required, the remainder of the cash will be requested. A few months some other time when the company requests the leftover half sum, Mr. A says that he is unequipped for paying. The company gives him some more opportunity to pay yet he actually can’t pay. The company holds onto his shares and he never again is an investor of the company. He loses the half he had effectively paid. This capture of shares is called share relinquishment.

Forfeiture of share issued at par:

Share capital A/C Dr.(a)

To share forfeiture A/C (b)

To share allotment A/C   (c)

To share calls A/C           (d)

Note   

(a) = No. of forfeited shares × Amount called per share

(b) = Amount already paid by the shareholders on the shares

(c) = Arrear on the allotment

(d) = Arrear on the calls

For instance: The heads of Dhungana Ltd. company relinquish 500 portions of Rs.100 each for non-payment of instalment of Rs.20 on the first call and Rs.30 on conclusive call. The application and assignment cash were paid. Required: passage for Forfeiture of shares.

Share capital A/C   Dr. (500×100)	50,000
To Share forfeiture A/C (500×50)	25,000
To Share first call A/C (500×20)	10,000
To Share final call A/C (500×30)	15,000

In spite of the fact that Forfeiture ordinarily happens because of non-payment of instalment, it can likewise be made for some other explanation determined in the company’s articles. A company can relinquish shares as indicated by the arrangements given in its articles. In the event that the articles don’t contain such arrangements, guidelines 29-35 of Table an of the Companies Act, apply. The arrangements in regards to calls and Forfeiture are examined in the accompanying sub-areas.

As clarified over, the company may call up the neglected sum from the investors every now and then. The board is needed to pass a goal for settling on a decision. The articles of the company have arrangements in regards to calls. On the off chance that nothing is referenced in the articles, the arrangements set down in Articles 13-18 of Table An are material while settling on decisions. These are recorded underneath:

• The sum called should not be more than one-fourth of the presumptive worth.
• The dates of two sequential calls should vary by something like a month.
• At least 14 days’ notification should be given to the individuals.
• The notification should specify the time, spot of instalment and the sum called.

On the off chance that an individual neglects to settle on decision instalment by the due date, he/she might be responsible to pay interest consequently. Further, the Board may likewise acknowledge all or part of the cash uncalled and neglected upon the shares from a part. This is called brings ahead of time.

Illustration 2

The portions of a company have an assumed worth of Rs100. Out of this, the investors need to pay Rs25 on the application and Rs35 additional on apportioning. Further, the governing body passes a goal to settle on the main decision of Rs20, which is properly gotten by the company. Accordingly, on this offer, an amount of Rs80 has been called and settled up. In any case, an amount of Rs20 actually remains uncalled on the offer. The company may call up this sum any time later on.

On settling on a decision assuming a part defaults in making an instalment by the due date, the Board may send him/her a notification illuminating him/her that the instalment should be made by a later date or, in all likelihood the shares will be relinquished. This new date can’t be sooner than the expiry of 14 days from the date of administration of the notification. On the off chance that the defaulter neglects to make the instalment even at such a date, the board will pass a goal to relinquish the shares. The Forfeited shares are normally reissued by the company. A substantial Forfeiture will have the accompanying ramifications:

• The defaulter stops being an individual from the company.
• The defaulter keeps on being obligated for all sums which, at the date of the relinquishment, were payable by him/her to the company in regard to the shares.
• The defaulter isn’t qualified for a discount of the sum settled up by him/her in regard to the relinquished shares.
• A substantial Forfeiture should be as per the articles (or Table A) and should be made true blue to assist the company.

Illustration 3

Mayur Ltd. has issued 10,000 equity shares of face value Rs100 each to the public. The company duly receives Rs10 per share on application, Rs20 per share on the allotment, and Rs30 per share on making the first call from Ketan who has been allotted 300 shares in the company. However, when the company makes the final call of Rs40 per share, Ketan failed to pay the amount within the stipulated time and the company forfeits his shares. Thus, Ketan ceases to be a member of the company and will not be refunded the money paid by him (Rs60) in respect of the forfeited shares.

Once the shares are forfeited, they may be either cancelled or reissued to some other person. The person who purchases the forfeited shares becomes a member of the company. His / her title is not affected by any irregularity in the proceedings with reference to the forfeiture, sale, or disposal of the share. While reissuing the forfeited shares the company should fix the price of reissue such that the total amount received in respect of the shares (i.e. price of the reissued of shares + amount paid by the previous owner in respect of the shares) is not below its face value. This is done to ensure that reissue does not amount to issue at a discount or the provisions of section 79 would become applicable.

Forfeiture of Shares

Forfeiture of Shares implies the end of enrolment of an investor and removing his shares via a punishment for not paying any call or portion or premium on the shares. At whatever point a company settles on any, the decision on the shares, then, at that point investors need to pay the call cash inside a specified time. On the off chance that any investor neglects to pay any such call cash even after updates and notification, the company has a right, ordinarily under its Articles of Association, to relinquish his shares. In such a case the company has an option to relinquish the sum previously paid by the investor.

Rules Relating to Valid Forfeiture Shares

In the event that the Articles grant for Forfeiture of shares, important guidelines of ‘Table F’ will apply (except if given in any case in the Articles of the company). which give the accompanying principles identifying with a substantial Forfeiture of shares. Shares can be relinquished distinctly for non-payment of instalment of call due in regard to the shares and not for different obligations. Appropriate notification should be given to the defaulting part mentioning him to pay the extraordinary measure of call. This notification must give somewhere around 14 days’ the ideal opportunity for the instalment of such sum and should illuminate the part that in case of non-payment of instalment, his shares will be relinquished. On the off chance that the part doesn’t follow the notification, the Board of Directors will pass a conventional goal of Forfeiture and a notification of a similar will be served on the defaulting investor. In the event that this goal isn’t passed, the Forfeiture is invalid. The ability to relinquish shares should be practised by the chiefs in accordance with some basic honesty and to help the company. In the event that a company is ended up following one year from the date of the relinquishment, the part whose shares have been relinquished can’t be held at risk as a contributory.

Effects of Valid Forfeiture Shares

The defaulting investor, whose shares are relinquished, stops to be an individual from the company and his name is struck off the register of individuals. The responsibility of the individual whose shares have been relinquished stops just when the company gets an instalment in brimming with all such cash in regard to the shares relinquished. Along these lines, a part stays at risk to the company for all such cash, which at the hour of relinquishment, were payable by him to the company in regard to shares relinquished. The previous investor will stay obligated as a previous part to pay calls if liquidation happens within one year of the relinquishment. On relinquishment, the Forfeited shares become the property of the company and they are either regiven or discarded.

Re-issue of Forfeited Shares

Forfeited shares become the property of the company. They might be dropped or re-issued at any cost they will bring, yet the measure of markdown can’t surpass the genuine, sum relinquished on these shares, else it would add up to the issue of shares at a rebate which is denied under Section 53. After the re-issue, the new holder turns into an investor of the company and his name will be enrolled in the register of individuals. For the re-issue of shares, the Board needs to pass a goal. The title of the buyer to the Forfeited shares isn’t influenced by any inconsistency or shortcoming in the Forfeiture or offer of the shares. The re-issue of Forfeited shares is treated as redeal and not the apportioning, and in this way, no arrival of designation of re-issue of Forfeited shares need be documented with the Registrar of Companies.

The Relationship Between Shareholder and Company

Presently in the event that we take a gander at the connection between an investor and the company, it is a legally binding relationship. The investor applies for a proposal from the company and gets shares distributed. This cycle is only the investor going into an agreement with the company as the offer and acknowledgement alongside some thought become a substantial agreement between him and the company. This agreement makes it restricting the investor to settle up the sum due to the issue cost of the offer when the company calls for it through the approach shares.

So, the non-payment of approach shares adds up to a penetrate of the agreement by the investor, and thusly according to the agreements of the issue of shares and subsequent to permitting the investor recommended time and opportunity, in the event that he actually neglects to pay the cash due, the company can relinquish the portions of that investor. Shares that are relinquished will presently don’t stay the portions of that investor. The cash paid by that investor is additionally not refundable by the company.

What Happens After the Shares are Forfeited? 

After the shares are relinquished, they might be either discarded or they might be reissued to some other individual. The lone condition in reissuing the Forfeited shares is that the value which will be fixed by the company for reissue of the relinquished offer (i.e., the cost of the reissued share plus sum paid by the previous proprietor of the offer) ought not to be exactly the presumptive worth of the offer. This is done to guarantee that the shares are not designated at a rebate.

In the event that the past investor (whose shares have been relinquished) demands the company to drop the relinquishment, the governing body can any time before the re-issue or removal of such shares can drop the Forfeiture of Shares in wording as it thinks fit. For this, the directorate needs to pass a goal to drop the relinquishment.

Procedure for Forfeiture of Shares

Forfeiture of Shares is a genuine advance since it includes denying an individual of his property as a punishment of some demonstration or oversight. Appropriately, portions of individuals can’t be relinquished except if the articles of the company give such force to the chiefs. The Forfeiture of an offer ought to happen just for the non-payment of instalment of the approach shares by the individuals and as per articles of the company. Yet, Forfeiture can likewise be made for whatever other reasons which are determined in the articles of the company. Companies ordinarily have their own guidelines and guidelines with respect to the Forfeiture of Shares and on the off chance that assuming those arrangements are absent, the Regulations 28-34 of Table F of Schedule 1 of Companies Act, 2013 will apply.

The following is the procedure:

In Accordance with Articles

Forfeiture of Shares should be as per the arrangements contained in the articles of the company to be treated as legitimate relinquishment. The force of Forfeiture of Shares should be practiced real and in light of a legitimate concern for the company. Along these lines, where the articles of the company approve the chiefs to relinquish the portions of, an investor activity against the company or the chiefs, by making an instalment of everything of his shares, was held that such a statement was invalid as it was against the privileges of an investor [Hope v. InternationalFinance Society^[1]].

Proper Notice

A legitimate notification under the authority of the board should be served on the defaulting investor. The notification should make reference to that the investor needs to pay the sum on a day determined which would not be sooner than fourteen days from the date of the notice served. This is given under Regulation 29 of Table F. the notification ought to likewise make reference to that in case of non-payment of instalment, the shares will be responsible to be relinquished.

The goal of sending the notification is to offer the defaulting investor a chance to pay the call cash, premium, and some other costs and subsequently notice ought to reveal sufficient data with specifics to the investor.

 “A proper notice is a condition precedent to the forfeiture of shares and even the slightest defect in the notice will invalidate the forfeiture”. [Public Passenger Services Ltd. v. M.A. Khader^[2]]

A notice sent for forfeiture by registered post was returned unserved, the forfeiture will be held invalid” [Promiela Bansali v. Wearwell Cycle Co. Ltd.^[3].] 

A notice sent to the holder of a partly paid share after his death is not proper notice. Notice in this kind of situation is to be sent to the legal heir [George Mathai Noorani v. Federal Bank Ltd.^[4].]

Resolution for Forfeiture

In the event that the defaulting investor doesn’t pay the sum inside the predefined period referenced in the notification appropriately served to him, the heads of the company may pass a goal relinquishing the shares under guideline 30 of Table F. without such goal the Forfeiture will be invalid except if the notification of Forfeiture joins the goal of Forfeiture also. For instance, the notification may express that in case of default the shares will be considered to have been relinquished.

Effects of Forfeiture

Cessation of Membership

A person whose shares have been forfeited ceases to be a member in respect of forfeited shares. This is provided under regulation 32(1) of Table F of Schedule 1 of Companies Act, 2013.

Cessation of Liability

The liability of a person whose shares have been forfeited comes to an end when the company receives the payment in full of all such money in respect of shares forfeited. This is provided in Regulation 32(2) of Table F.

However, notwithstanding the forfeiture of shares, the shareholder remains liable to pay to the company all money which, at the date of forfeiture, were payable by him to the company in respect of forfeited shares. Thus, the liability of unpaid calls remains even after the forfeiture of shares.

Liability as a Past Member

The liability of a former shareholder remains as a liability of a past member to pay calls if liquidation of the company takes place within one year of the forfeiture.

Forfeited Shares Become Company’s Property

The Forfeited shares become the property of the company on relinquishment. As needs are, these might be regiven or in any case discarded on such terms and in such way which the governing body thinks fit. This gave under Regulation 31(1) of Table F.

In a similar Regulation proviso (2) gives that any time of time before a deal or removal of Forfeited shares the load up may drop the Forfeiture of Shares in wording as they might suspect fit.

Shah J. in Naresh Chandra Sanyal v. Calcutta Stock Exchange Assn. Ltd^[5]., according to Regulation 29 of Table A [Corresponds to Regulation 28 of Table F of Schedule I to the Companies Act, 2013], shares can be relinquished uniquely against non-payment of instalment of any call, or portions of a call. The Articles of a company may, nonetheless, legitimately join some other grounds of relinquishment.

Linkmen Services (P.) Ltd. v. Tapas Sinha^[6], a company revised its articles of relationship with the end goal of:

(i) relinquishing the portions of any defaulting part and

(ii) removing part who desert the company by not working with it.

The respondents tested the above corrections on the grounds of mistreatment. The CLB (Replaced by the Tribunal under the Companies Act, 2013] held that the articles of company couldn’t engage to relinquish the shares because of levy other than neglected calls. The litigant company spoke to the High Court. Permitting the allure the Court held that Forfeiture on grounds as referenced in the articles of the company isn’t strange to the corporate statute as the CLB found in the criticized judgment. It is a force that the articles can present.

Expectation v. Global Finance Society, where the articles approve the chiefs to relinquish the portions of an investor’s activity against the company or the chiefs, by making an instalment of the full market worth of his shares, it was held that such a provision was invalid as it was against the privileges of an investor.

Re Exparto Trading Co^[7]., where two chiefs were allocated capability shares, with no instalment, and these shares were relinquished by a Board goal passed in line with those two chiefs, the Forfeiture was held to be invalid and the chiefs were held responsible to pay the ostensible worth of the shares.

Public Passenger Services Ltd. v. M.A. Khader^[8] 1 Comp LJ 1: A legitimate notification is a condition point of reference to the relinquishment, and surprisingly the smallest imperfection in the notification will refute the relinquishment.

Johnson v. Lyttle’s Iron Agency^[9] ., the court held that the notice should mention that the payment of interest should be made from the date of the call.

Sparks v. Liverpool Water Works Co^[10].,. Accidental non-receipt of notice of forfeiture by the defaulter is not a ground for relief against forfeiture regularly effected.

Sha Mulchand & Co. v. Jawahar Mills Ltd^[11]. Com Cases 1 (SC). Even a slight irregularity in effecting a forfeiture would be fatal and render the forfeiture null and void. The aggrieved shareholder may bring an action for setting aside the forfeiture as well as for damages. Mere waiver or surrender would not deprive him of his rights against an invalid forfeiture of his shares.

Surrender of Shares

A company cannot accept a surrender of its shares “as every surrender of shares, whether fully paid-up or not involves a reduction of capital which is unlawful…forfeiture is a statutory exception and is the only exception”. [Bellerby v. Rowland and Marwood’s S.S. Co. Ltd.,^[12]].

But a surrender may be dealt with in the manner indicated in Re Castiglione’s Willtrusts, Hunter v. Mackenzie^[13], viz., directing that the shares be held in the name of a nominee as trustee for the company.

However, surrender can be accepted in circumstances absolutely parallel to the requirements of forfeiture, the only difference being that instead of going to the length of the formalities of forfeiture, the company accepts in good faith in its own interest the shares which the shareholder is voluntarily surrendering. The other advantage to the company is that the shareholder becomes estopped from questioning the validity. [Collector of Moradabad v. Equity Insurance Co. Ltd.,^[14]].

At the point when an investor of a company deliberately leaves his shares for the company, he is said to have given up those shares to the company. At the end of the day, after the portion of shares, if an investor cannot pay the further, he can return his shares to the company for the abrogation of such shares.

The Companies Act doesn’t contain any arrangement for the surrender of shares since, supposing that a company acknowledges such surrender of shares it adds up to the acquisition of its shares by the company which isn’t permitted. Notwithstanding, a company may acknowledge the surrender of shares in case it is approved by the Articles of a company.

A surrender is ultra vires in case shares are given up for some thought as instalment of cash or cash’s worth as it adds up to the company buying its shares.

Surrender outcomes at the end of the enrolment of such investor giving up his shares. Surrender has a similar impact as relinquishment. The lone distinction is that a surrender of shares is done intentionally at the occasion of the investor while Forfeiture of Shares is a correctional activity taken by the company against the investor by taking his shares.

A simple refusal by the investor to take up recently gave shares to which the investor is entitled can’t be known as the surrender of shares by him.

Conditions for Valid Surrender of Shares

In the instance of incompletely settled up shares where Forfeiture is called for and surrender is acknowledged by the company to keep away from the customs of relinquishment, the surrender is substantial. Here, the investor will surrender his shares to the company. The decrease of shares capital in such a case is considered substantial.

In the instance of completely settled up shares, where the shares are traded for new portions of similar ostensible worth. Completely settled up shares can be given up without the authorization of the Court as in such a case there is no decrease of shares capital.

On the off chance that a company ends up inside a year of a legitimate surrender of shares, the part who gave up the shares can be held obligated as a rundown B contributory. The offer which has been given up truly can be reissued similarly as Forfeited shares are reissued.

Regardless, be given up to the company in light of the instalment of cash or cash’s worth by the company. Such a surrender will be ultra-vires the company since it would add up to buy by the company of its own shares. There are just two situations where the surrender of shares will be legitimate given its acknowledgement by the company is approved by the Articles of Association—

(I) When shares are given up in the return of the new portions of similar ostensible worth. There would be no decrease of shares capital in such a case; and

(ii) When shares are given up as an easy route to Forfeiture of Shares when every one of the conditions for Forfeiture has emerged. A decrease of capital in such a case will be legitimate.

Arrangements in the articles, for the acknowledgement of surrender of shares in any remaining cases with the exception of the over two, will be void.

A part truly giving up his shares to the company can by and by be held obligated as a rundown B contributory in case of ending up of the company inside a year of his surrender of shares. The court may arrange for the reclamation of the offended party’s name in the Register of Members after passing of quite a few years if the surrender of shares ends up being illicit and given that the shares have not been reissued meanwhile or in any case managed by the company.

The company act doesn’t accommodate the surrender of shares. Shares are supposed to be given up when they are intentionally surrendered. The articles of a company may approve the chiefs to acknowledge the surrender of shares. The surrender of shares is substantial where it is done to remember the company from going through the convention of Forfeiture of Shares and the investor will surrender the shares. A surrender and a Forfeiture have for all intents and purposes a similar impact, the solitary distinction being that the previous is finished with the consent of the investor while the last is done at the occurrence of the company.

Surrender of shares will be void on the off chance that it adds up to an acquisition of shares by the company or then again in case it is acknowledged to soothe an individual from his liabilities. Each surrender of shares if completely settled up, includes a decrease of capital which is unlawful with the exception of when authorized by the court. Be that as it may, completely paid shares can be given up without leave of the court gave the surrender is given up without leave of the court gave the surrender does not include the decrease of capital i.e., in return for different portions of similar ostensible worth.

An individual stops to be an individual from the company on a legitimate surrender of shares. However, he will be responsible as a contributory as a previous individual from the company in case it is ended up inside a year of his giving up his shares. Shares that have been legitimately given up can be reissued similarly as relinquished shares.

Right Shares

Right shares are the shares that are given by a company to its current investors. The current investors reserve their privilege to buy into these shares except if some unique rights hold them for some different people.

Right shares must be given following two years of the arrangement of the nation or following one year of the primary issue of the shares whichever is prior, according to Section 81 of the Indian Companies Act. The right shares are generally given in the proportion of the value shares held by the current investors. Typically given with 15 days’ notification and cannot be opened over 60 days according to the SEBI rules.

The Benefits of Right Shares are Recorded Beneath

• Greater control on the current investors.
• Increase in the worth of shares and subsequently no deficiency of existing investors.
• Increases company generosity and brand insight.
• There is no expense associated with the issuance of the shares.
• The company has simple admittance to any capital needed any time of time.
• The appropriation procedure engaged with the right shares is more logical.

The Disadvantages of the Right Shares Incorporate

• The weakening of the worth of the shares because of the expanded number of shares.
• It shares just an impermanent answer for any administration issue yet not a perpetual answer for it.

Once in a while in the issuance of the right shares, the company’s works with guarantors (monetary foundations, significant investors, and so on) who guarantee that if the current investors do not accept the offer offered to them, they will get them.

Conclusion

From the above discussion, we can conclude that a company may make a call on shares asking the shareholder to pay the balance remaining unpaid on each share within a specified period. If a shareholder fails to make such payment a company may either exercise the right of lien on such unpaid shares or may forfeit his shares. A shareholder can surrender his shares by voluntarily returning them to the company.

Forfeiture and surrender of shares are discrete ideas that produce completely various outcomes. In relinquishment, the organization starts the procedures. In surrender, it is the investor who is the initiator. There is little uncertainty that an organization has no innate power to relinquish portions of a delinquent investor. At the point when it has the force the organization should get it straightforwardly from resolution or the instrument making it or its guidelines. Both the Dominion and the Ontario company acts to make arrangements for Forfeiture of shares for non-payment instalment of calls. In any case, on the issue of surrender, there is less assurance whence the ability to acknowledge an acquiescence is determined. The forces are not legal, not even in the English company acts. The cases appear to be clear, notwithstanding, that an organization may by extraordinary goal give itself the ability to acknowledge gives up. However this force may exist, the law gives certain exceptionally unequivocal constraints upon its activity.

An appropriately confirmed assertion recorded as a hard copy that the declarant is chief, the administrator, or the secretary of the organization and that an offer in the organization has been properly relinquished out on the town expressed in the presentation will be convincing proof of the realities in that expressed as against all people professing to be qualified for the shares.

The articles of association, in any case, frequently enable the chiefs to acknowledge the acquiescence of shares. Courts also perceive on the rule that it mitigates the heads of the need to go through the convention identifying with relinquishment. Despite the fact that acquiescence and Forfeiture have practically a similar impact, yet they vary from one another. Surrender is affected with the consent of the investor, while Forfeiture is a procedure in invitum (i.e., against a hesitant investor) [Trevor Vs. White-work^[15] ]. Yet, an acquiescence of shares not completely paid must be acknowledged where Forfeiture would be supported [Bellerly and Rawland and Marwoods Steamship Co.^[16]].

Where the organization pays any thought for the acquiescence of incompletely settled up shares, the will be invalid, in however much it will add up to buy by the organization of its own shares. Except if there are exceptional conditions, e.g., where the acquiescence is a piece of giving and take. Each surrender of shares, regardless of whether completely settled up, includes a decrease of capital, which is unlawful without the approval of the Court. Consequently, it could be on the right track to say that acquiescence of shares in an organization is an alternate route to relinquishment.

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References:

[1](1876) 4 Ch. D. 598

[2][1996]

[3][1978] 48 Comp. Cas. 202 (Delhi)

[4][2007] 76 SCL 528 (CLB)

[5]1971 AIR 422, 1971 SCR (2) 483

[6]2008 141 CompCas 198 Cal, (2008) 2 CompLJ 61 Cal, 2008 83 SCL 143 Cal

[7]1999 (85) ECR 683 Tri Mumbai, 2000 (126) ELT 646 Tri Mumbai

[8]1966 AIR 489, 1966 SCR (1) 683

[9]1877 Ch D 687.

[10]1807 13 Ves 428

[11]1953 23

[12](1902) 2 Ch 14

[13](1958) 1 All ER 480

[14]AIR 1948 Oudh 197

[15] (1887) 12 App. Case. 417

[16] (1902) 2 Ch. 14