Judgment Kapadia, J.—The short question which arises for determination in these civil appeals by grant of special leave by Calcutta Municipal Corporation is - whether the imposition for the process of change in the name of the owner in the assessment books of the corporation is in the nature of “a fee” or “tax”. 2. For the sake of convenience, we refer to the facts of Civil Appeal No. 5631 of 2000. Premises bearing No. 9A, Jatindra Mohan Avenue, Calcutta - 700 006 belonged to Tapas Ghosh, Meenakshi Sinha and Gayatri Chandra. By several deeds of conveyance, they sold the said premises to M/s Shrey Mercantile (P) Ltd., M/s Drishti Mercantile (P) Ltd. and M/s KIC Resources Ltd. (hereinafter referred to as “the developers”). The building in the premises was very old and was in a dilapidated condition. The developers decided to construct a new building after demolishing the existing old structure. The developers submitted the building plan for sanction which the corporation refused to accept without the names of the developers being brought on record by way of mutation. On 21.3.1997, the developers applied for mutation by deletion of the names of the previous owners and substitution of their names for which the corporation demanded mutation fees of Rs. 3 lacs under Calcutta Corporation (Taxation) Regulations, 1989. This demand was challenged by filing of writ petition in the Calcutta High Court. 3. The Calcutta Municipal Corporation (Amendment) Act, 1988 was passed by the State Legislature, which was published in the gazette on 9.1.1989 and which came into effect from 20.2.1989. Section 7 of the Amendment Act (XXI of 1988) provided as under : “Section 7. Amendment of Section 183—In sub-section of the Principal Act— (1) after the words “Under this Section”, the words “and upon payment of such fees as may be determined by regulation” shall be inserted, and (2) the words “in such form and in such manner as may be prescribed” shall be omitted.” 4. In terms of the aforestated Amendment Act, the corporation made Calcutta Corporation (Taxation) Regulations, 1989, in purported exercise of the powers conferred by section 602 read with section 183(5). In terms of the aforestated Amendment Act, the corporation made Calcutta Corporation (Taxation) Regulations, 1989, in purported exercise of the powers conferred by section 602 read with section 183(5). The said regulations inter alia provided that fees for recording of transfer or devolution of title of any land or building under section 183 shall be as per the schedule reproduced hereunder : “SCHEDULE” 1) In the case of transfer/agreement for sale or cost of acquisition or in the case where there is certificate or in the case of testamentary succession— Amount of fee in rupees (a) If the price/value of 0.5 of the price/ the property declared value. does not exceed rupees fifty thousand. (b) Where such price/ 1 of the price/value. value exceeds rupees fifty thousand but does not exceed rupees one lakh. (c) Where such price/ 1.5 of the price/ value exceeds rupees value. one lakh but does not exceed rupees three lakh. (d) Where such price/ 2 of the price/value. value exceeds rupees three lakhs but does not exceed rupees five lakhs. (e) Where such price/ 2.5 of the price/ value exceed rupees value. five lakhs. (2) In the case of transfer by a deed of lease/sub-lease/assignment or such other similar instrument, the amount to be paid will be at the same rates as at (1) above, on the value shown in the document for Stamp Duty : Provided that in calculating the amount of fee to be paid under (1) or (2) above any fraction of a rupee amounting to fifty paise or more shall be rounded off to the nearest rupee. (3) In the case of intestate succession— Amount of fee (a) If the last decided Rs. 25 annual valuation does not exceed rupees three thousand. (b) If such valuation Rs. 50 exceeds rupees three thousand but does not exceed rupees six thousand. (c) If such valuation Rs. 100 exceeds rupees six thousand but does not exceed rupees ten thousand (d) If such valuation Rs. 200 exceeds rupees ten thousand but does not exceed rupees fifteen thousand. (e) If such   valuation Rs. 250 exceeds rupees fifteen thousand 4. In case of thika Rs. 20" tenant/hut owner in a Bustee hut premises. 5. (c) If such valuation Rs. 100 exceeds rupees six thousand but does not exceed rupees ten thousand (d) If such valuation Rs. 200 exceeds rupees ten thousand but does not exceed rupees fifteen thousand. (e) If such   valuation Rs. 250 exceeds rupees fifteen thousand 4. In case of thika Rs. 20" tenant/hut owner in a Bustee hut premises. 5. In the writ petition, the developers pleaded that the said regulations in the guise of imposing “a fee” had in fact imposed a tax without sanction of law; that the impost was on ad valorem basis and not in commen­suration with the expenses incurred by the corporation in rendering the alleged services; that prior to the amendment of section 183 by Act XXI of 1988, no fee was imposed for mutation; that after the amendment and framing of the aforestated regulations, enormous amounts were sought to be levied on ad valorem basis in the case of mutations consequent upon inter-vivos transfers vis-a-vis mutations on account of intestate successions where fees were charged at a flat rate, particularly when the functions performed by the corporation with regard to the mutations remained the same. That, whether the property was valued below Rs. 50,000/- or whether it was valued above Rs. 2 lacs, the function of the corporation with regard to mutation was the same. It was further averred that whatever may be the cause of mutation, whether it is because of transfer or change of ownership due to succession or otherwise, the function of the corporation in the matter of mutation remained the same and even the expenses, if any, incurred by the corporation in performing such functions did not vary, whatever may be the value of the property or the cause of mutation. It was further averred in the writ petition that under the provisions of the Act, the owner was primarily responsible to the corporation to pay the consolidated rate and, therefore, it was necessary a complete contract for the sale and purchase of the freehold reversion was constituted”. IV.2.4 There was thus a concluded contract which was breached by the ­respondent Nos. 2, 3 and 4 when they purported to sell their shares to the Pawar group. IV.2.5 If the notices issued by the respondent Nos. 2, 3 and 4 were not under Article 58, then it was not open to the respondent Nos. IV.2.4 There was thus a concluded contract which was breached by the ­respondent Nos. 2, 3 and 4 when they purported to sell their shares to the Pawar group. IV.2.5 If the notices issued by the respondent Nos. 2, 3 and 4 were not under Article 58, then it was not open to the respondent Nos. 2, 3 and 4 to have sold the shares to the Pawar Group without issuing such notices. Hence irrespective of whether there was a concluded contract between the appellants and the respondent Nos. 2, 3 and 4 in respect of the 3417 and 93 shares, the shares could not have been sold to the Pawar Group. Apart from the lack of notice under Article 58, as we have already noticed, the right of a transferor in terms of the Articles of the company to sell the shares to a person of the transferor’s choice is required to be exercised within the period specified in the Articles. This is clear from Article 63. According to the respondents the appellants had repudiated the contract by challenging the certification of the auditor in February, 1985. If that were so then the Directors were required to give the notice to the transferor or if no such notices were given, the transferors could sell within the period of 30 days thereafter. Those 30 days had long since expired much before the date on which the sale of the shares is said to have taken place between the respondent Nos. 2, 3 and 4 and the Pawar Group. IV. 3 We are of the view that there was also no repudiation of the contract by the appellants as contended by the respondents on account of the appellants alleged failure to pay the price within the time fixed by the respondent Nos. 2, 3 and 4 by their notices dated 21.2.1985. IV.3.1 Section 11 of the Sale of Goods Act, 1930 expressly says : “11. Stipulation as to time.—Unless a different intention appears from the terms of the contract, stipulations as to time of payment are not deemed to be of the essence of a contract of sale. Whether any other stipulation as to time is of the essence of the contract or not depends on the terms of the contract”. Stipulation as to time.—Unless a different intention appears from the terms of the contract, stipulations as to time of payment are not deemed to be of the essence of a contract of sale. Whether any other stipulation as to time is of the essence of the contract or not depends on the terms of the contract”. IV.3.2 As there was no time fixed either under Article 57-A or in the offer letters, the question of time being of the essence did not at all arise. As was held in S.C. Gomathinayagam Pillai v. Palaniswami Nadar 1967 AIR 1967 SC 868 - “the stipulation must show that the intention was to make the rights of the parties depend on the observation of the time limits prescribed in a fashion which is unmistakable.” If there is no stipulation as to time, it is not open to a party to unilaterally stipulate a time and then cancel the contract because of an alleged failure of the other party to act within the time stipulated. [See: National Co-operative Sugar Mills Ltd., Alanganallur v. M/s. Albert & Co. AIR 1981 MAD 172 (D.B.) IV.3.3 Of course if time is fixed by the contract but it is not originally of the essence, a party could by notice served upon the other call upon him to complete the transaction within the time fixed and intimate that in default of compliance with the requisition the contract will be treated as cancelled (ibid p. 872). But where no time is fixed for completion, it is not open to either the vendor or purchaser to serve notice limiting a time at the expiration of which he will treat the contract as at an end. IV.3.4 In the circumstances, the contract for sale of the shares to the appellants could not be avoided by reason of any alleged failure on the part of the appellants to pay the price fixed by the Auditor. IV.4 Furthermore for an act to constitute a repudiation of a contract it must be “.....such an act as indicated an intention to refuse to perform the contract and to set the other party free from performing his part...... an act by which the party renounced all intention to perform his part of the contract, and thereby set free the other party ......... an act by which the party renounced all intention to perform his part of the contract, and thereby set free the other party ......... or an intimation that it was no use for you to go on, because I tell you that I do not mean to keep to the contract”. [See: Freeth v. Burr (Lord Coleridge, CJ (1874-80) All ER. 753]. The question to be asked is “.....is the act to be relied on as rescission, an act which on the part of the person doing it amounts to an abandonment, or refusal by him to perform his part of the contract?” (ibid at pg. 754) IV.4.1 Repudiation of a contract is “a serious matter, not to be lightly found or inferred”. From the facts as narrated earlier, it is clear that there was no such repudiation on the part of the appellants. The letters exchanged, the suits filed do not show that the appellants were renouncing the contract nor that they were absolutely refusing to perform the contract. The question is not whether the valuation by the company’s auditors was correct. The Division Bench held that it could not be said to be incorrect. But the question which should have been asked was, was the challenge permissible in law and if so was it made bonafide? The Division Bench did not answer this question in the negative. There was in fact no refusal to perform the contract, but a questioning of the mode of performance. It may be that they were mistaken in their challenge to the Auditors’ certificate, but that is a long way from saying that they were unwilling to pay. As was said in Sweet & Maxwell Ltd. vs. Universal News Services Ltd. 1964 QBD 699 (CA) 179 “their view might have been a wrong one, but that does not justify it being treated as a repudiation of the contract”1.... As was said in Sweet & Maxwell Ltd. vs. Universal News Services Ltd. 1964 QBD 699 (CA) 179 “their view might have been a wrong one, but that does not justify it being treated as a repudiation of the contract”1.... If A and B, parties to a contract, form different views as to the construction and effect of their contract, and A demands performance by B of some act which B denies he is obliged to perform upon the true interpretation of the contract, then, if B says “I am ready and willing to “perform the contract according to its true tenor, but I contend that what you, A, require of me is not obligatory upon me “according to the true construction of the contract,” and if in so saying he is acting in good faith, he does not manifest the intention to refuse to perform the contract. On the contrary, he affirms his readiness to perform the contract, but merely puts in issue the true effect of the contract.” (ibid pg. 737) IV.4.2 There would have been no point in the appellant challenging the valuation of the shares by the auditors if they were not interested in completing the transaction. There would have been also no point in their offering to deposit Rs. 20 lakhs as proof of their continued interest in purchasing the shares. The filing of the suit in Pune is not conduct in keeping with an intention of not performing the contract. If the offers were in terms of Article 58, as is now contended by the respondents, then, as we have said, the acceptance of that offer must also be understood to be under Article 58. In that case it was for the parties to negotiate the price for the shares and not for the auditors to determine. The challenge to the certification may be taken as a method of negotiating a fair value under Article 58. Be that as it may, the appellants in fact accepted the price as certified by the auditors on 1st October,­ 1985. IV.5 The respondents have relied on the resolution at the Executor’s meeting on 27.11.1984 at which it was determined that the sale of the shares would be made. The resolution of the executors was that one of the executors could implement the sale and execute the transfer forms but did not name anyone. IV.5 The respondents have relied on the resolution at the Executor’s meeting on 27.11.1984 at which it was determined that the sale of the shares would be made. The resolution of the executors was that one of the executors could implement the sale and execute the transfer forms but did not name anyone. Before the sale of the 3417 shares was made to the Pawars by the Executors, it was abundantly clear from the conduct of Shanta (i) that she had revoked consent she may have given qua Executor and Trustee to the sale of the 3417 shares to third parties and (ii) that the appellants were desirous of purchasing the shares themselves in whatever capacity. IV.5.1 In any event the Executors’ resolution dated 27.11.84 authorizing one of them of effect the transfer of the shares could not override the provisions of Section 108 of the Companies Act which prohibits a company from registering or transferring of shares in the company “unless a proper instrument of transfer duly stamped and executed by and on behalf of the transferor and by and on behalf of the transferee and specifying the name, address and occupation if any of the transferee, has been delivered to the company. IV 5.2 For the purposes of registration of the transfer under Section 108 the instrument of transfer must be executed by the transferor or it must be executed on behalf of the transferor. But there must be execution. The learned single Judge has found as a fact that the instrument of transfer had been signed by only three of the joint shareholders. Shanta had not signed. There were three signatures on the transfer deed. Each transferor had therefore, executed qua shareholders in respect of their own interest. There was no 4th signature on behalf of the 4th joint shareholder. This was also the finding of the Division Bench. But the Division Bench held that it was a mere irregularity which did not vitiate the registration. It was also held that the irregularity could be cured by one of the Executors signing on his behalf. IV.5.3 But compliance with the provisions of Section 108 was and is mandatory. As held in Mannalal Khetan & Ors. vs. Kedar Nath Khetan & Ors. (1977) 2 SCC 424 :– “The words “shall not register” are mandatory in character. The mandatory character is strengthened by the negative form of the language. IV.5.3 But compliance with the provisions of Section 108 was and is mandatory. As held in Mannalal Khetan & Ors. vs. Kedar Nath Khetan & Ors. (1977) 2 SCC 424 :– “The words “shall not register” are mandatory in character. The mandatory character is strengthened by the negative form of the language. The prohibition against transfer without complying with the provisions of the Act is emphasized by the negative language. Negative language is worded to emphasise the insistence of compliance with the provisions of the Act.... The provisions contained in section 108 of the Act are for the reasons indicated earlier mandatory. The High Court erred in holding that the provisions are directory”. (See also: Halsbury’s Law of England 4th edn. Vol. 7 para 1632, Palmers Company Law 24th Edn. Pg. 638, Jarnail Singh Vs. Bakshi Singh (1960) 30 C.C. 192 ; L. Janakirama Iyer Vs. P.M. Nilkanta Iyer and ­Others (1962) Supp. 1 SCR 206.) IV.5.4 The power to act by majority qua executors and authorizing someone to act as a shareholder on another’s behalf are distinct. There is no question of transferring shares by signature of a majority. Whatever the agreement between the executors was inter-se, the agreement could not over-ride the provisions of the Companies Act and under Section 108 the Company is bound to recognize only those transfers for the purpose of registration which are executed in terms of that section. It is true that they were in fact executors, and that, with regard to the beneficiaries mentioned in the will, they would be trustees of the stock, but the company does not take notice of any trust, and must act in accordance with the Act of Parliament, under which it is constituted, with regard to placing persons upon the register.” [See Barton v. London and North Western Railway Co. 1889(24) QBD 77 (CA)]. IV.5.5 Even if the four executors had wanted registration only in the capacity of executors and the company also acquiesced in it, the four executors would continue to be ordinary share holders and the limitation would be illegal and of no effect. Being on the register as joint share holders, there is no escape from the proposition that a transfer by one of them only would be an invalid transfer. [See : Barton v. London and Northern Western Railway Co. (1889 24 QBD 77)]. Being on the register as joint share holders, there is no escape from the proposition that a transfer by one of them only would be an invalid transfer. [See : Barton v. London and Northern Western Railway Co. (1889 24 QBD 77)]. IV.5.6 As far as the company is concerned, the requirement of execution of the transfer form by each of the joint share holders could not be met by execution of the transfer form by one of the shareholders even though between the share holders inter-se there was an agreement that one share holder could sign on behalf of all the other share holders unless the executant signs for himself and for on behalf of the other share holders/transferors. It would be of no consequence as far as Section 108 is concerned to exclude the reluctant share holder on the ground that the share holder had refused to execute the form. The remedy of the other joint share holders to compel the reluctant share holder to sign the transfer form would lie elsewhere and not in a breach of the requirement of Section 108 of the Companies Act. IV.5.7 Here the instruments of transfer had admittedly been improperly executed. Both the Courts have so held. It was therefore not lawful for the company to register the transfer. The principle that a Court will not interfere in the affairs of the company if the defect complained of can be cured would apply if the defect is a technicality and is curable. The non-compliance of Section 108 is not a technicality. IV.6 Apart from the violation of Section 108 as far as the registration of shares is concerned, the meeting of the Board of Directors at which the company recorded the transfer was invalidly held: IV.6.1 According to the Article 93 of the Articles of the Association of the Company:– “Every notice of a meeting of the Company shall specify a place, date and hour of the meeting, and shall contain a statement of the business to be transacted thereat. No General Meeting, Annual or Extraordinary, shall be competent to enter upon, discuss or transact any business which has not been specifically mentioned in the notice or notices upon which it was convened. No General Meeting, Annual or Extraordinary, shall be competent to enter upon, discuss or transact any business which has not been specifically mentioned in the notice or notices upon which it was convened. In every notice there shall appear with reasonable prominence a statement that a member entitled to attend and vote is entitled to appoint a proxy or, where one or more proxies are allowed, to attend and vote instead of himself and that the proxy need not be a member of the Company”. IV.6.2 In the notice for the meeting held on 21st September, 1985, there was no mention whatsoever, let alone a statement, relating to the transfer of the 3417 and 93 shares to the Pawars. At the same meeting, the respondents Nos. 5 and 10, were appointed as Additional Directors although their shares were not yet entered in the Company’s register of members. IV.7 As we have found several legal infirmities in the sale of the 3417 and 93 shares to the Pawars, it is not necessary to consider whether the respondent No. 5 and his group were pur­chasers of the shares. IV.8 The Division Bench erred in holding that the violation of Section 108 was ratified at the Board Meeting held on 13th October, 1985. Ratification is possible in respect of an act which is incompetent, by a person who would have been competent to do such act. The violation of Section 108 could not be ratified by the Board of Directors as the act was one which the Board was incompetent to allow. The Board of Directors never had the legal capacity to direct the registration of shares invalidly transferred. IV.9 It is the respondent’s final submission that neither of the appellants could have purchased the shares under Article 57A because Shanta was one of the named executors and trustees of inter alia shares of Dr. Paruleker under his will. IV.9.1 A trust is created under Section 6 of the Indian Trust Act, 1882 “.. IV.9 It is the respondent’s final submission that neither of the appellants could have purchased the shares under Article 57A because Shanta was one of the named executors and trustees of inter alia shares of Dr. Paruleker under his will. IV.9.1 A trust is created under Section 6 of the Indian Trust Act, 1882 “.. when the author of the trust indicates with reasonable certainty by any words or acts (a) an intention on his party to create thereby a trust, (b) the purpose of the trust, (c) the beneficiary, and (d) the trust-property, and (unless the trust is declared by will or the author of the trust is himself to be the trustee) transfers the trust-property to the trustee.” According to the appellant no valid trust was created as the beneficiaries had not been named. We do not propose to go into this question in these proceedings. IV.9.2 Under Sections 51 and 52 of the 1882 Act a trustee may not use or deal with trust property for his own profit or any other purpose in connection with the trust. And no trustee whose duty it is to sell trust property may directly or indirectly buy the same or any interest therein, on his own account or through his agent or third person. IV.9.3 Article 57-A does not envisage Shanta purchasing the shares through her nominee. One of hers rights under Article 57-A was no doubt to purchase the shares herself. But she could also nominate any other person to purchase the shares. The transferor then would have to make an offer to such other person who would then, independently of Shanta, be entitled to a transfer of the shares. In the latter case there is no question of any conflict of interest between Shanta in her capacity as trustee under the will of Dr. Paruleker and as a nominator under Article 57-A. Here, Shanta was not purchasing the shares. It is true that she could have done so in exercise of her preemptive right under Article 57-A, but she did not and only nominated her daughter as the person to whom shares should be sold. IV.9.4 This was also how the parties understood the situation as the correspondence exchanged between the parties evidences. It is true that she could have done so in exercise of her preemptive right under Article 57-A, but she did not and only nominated her daughter as the person to whom shares should be sold. IV.9.4 This was also how the parties understood the situation as the correspondence exchanged between the parties evidences. As we have noted the resolution relied upon by the respondents authorizing one of them to sell the trust shares, was taken of a meeting held on 27th November, 1984 which was attended only by two of the four Executors. Shanta could not attend because she was ill. Her prayer for adjournment was rejected by the two executors on the ground that her interest would not be jeopardized since she would be given notice under Article 57-A. It was then resolved that notice should be given under Article 57-A to Shanta. If she exercised her right under that Article, the executor was to sell the shares to her at Rs. 2,250 per share. If she did not agree to purchase the shares at the price of Rs. 2,250 then the price should be fixed in accordance with Article 61. The resolution further records that only if Shanta did not buy the shares at such fixed price then the executors “do sell the shares to any other person or persons at or for the price of Rs. 2,250 per share”. Since the meeting was not adjourned because Article 57-A protected Shanta, it follows that if Shanta’s rights were not to be protected under Article 57-A, then the meeting should have been postponed. IV.9.5 Indeed the matter was referred to the company’s auditors in purported compliance with Article 57-A. Certification of the price was made by the auditors also under that Article. The notice of the respondent Nos. 2, 3 and 4 calling upon the appellants to pay the certificate price was also under Article 57-A. The present stand of the respondent Nos. 2, 3 and 4 with regard to the disqualification of Shanta as a purchaser for the shares under Article 57-A is thus wholly inconsistent with their conduct ante litem. IV.9.6 The respondents now say that Article 58-A has no application. If it does not then Article 58 would. 2, 3 and 4 with regard to the disqualification of Shanta as a purchaser for the shares under Article 57-A is thus wholly inconsistent with their conduct ante litem. IV.9.6 The respondents now say that Article 58-A has no application. If it does not then Article 58 would. In that event, the certification by the auditors was entirely premature as the willing shareholder (the appellant No. 2 in this case) would be at liberty to negotiate the price with the respondent Nos. 2, 3 and 4 and it would only be in default of any agreement being reached that a “fair value” would have to be fixed by the auditors. In the circumstances the principle that the trustee not directly or indirectly buying the trust property as contained in Section 57-A of the 1882 Act would also not have any application because irrespective of her right as a nominee of Shanta, the present appellant could undoubtedly have purchased the shares being in the second category in the hierarchy of purchasers provided under Articles 57-A to 64. V. This bring us to the second branch of the appellant’s challenge viz. the issuance of 17,666 equity shares. V.1 The decision to raise the issued capital of the company and to allot the shares at par was taken at an Annual General Meeting held on 16.11.1985. It was resolved at that meeting to immediately issue increased share capital of Rs. 17,66,600 of 17,666 equity shares of Rs. 100/- each to any person whether a member of the company or not. It was further resolved that the decision would be ratified by convening a general body meeting preferably in the month of January/February, 1986 after giving proper notice and explanatory statement. V.2 The notice of the Annual General Meeting was given on 13.10.1985. Although details of ordinary business and special business were given, there was no indication whatsoever that there would be any decision taken with regard to the increase in the issued capital and allotment of shares in the notice. According to the respondents, after the notice of the Annual General Meeting had been issued on 13.10.85, on 5.11.85, the Ministry of Finance gave notice to the company extending the validity of a sanction for foreign exchange loan to 30.11.85 and stating that no further extension would be granted. According to the respondents, after the notice of the Annual General Meeting had been issued on 13.10.85, on 5.11.85, the Ministry of Finance gave notice to the company extending the validity of a sanction for foreign exchange loan to 30.11.85 and stating that no further extension would be granted. On 9.11.1985 a letter dated 7.11.1985 was sent to the company by Modular Finance and Consultancy Private Limited (the respondent No. 12 before us and a member of Pawar Group) proposing that the share capital of the company be increased and requesting the issue to be decided at an ensuing AGM. On 11.11.1985 a letter was also received by the company from the United Western Bank advising the company in view of its expansion programme, to increase its share capital. V.3 According to the respondents, the increase was by reason of the urgent need of the Company to purchase machinery. We are unable to agree. The purchase of the machinery was in contemplation of the company from much prior to the date of the notice. The alleged letter from the Ministry of Finance was not produced before the High Court and we are not prepared to allow the same to be brought on record at this stage. V.3.1 The Division Bench affirmed the finding of the learned Single Judge that the need to increase the issued capital from Rs. 7,33,400 to Rs. 25 lakhs was not established. Indeed the Division Bench went on to find that the action of issuing the increased share capital clearly indicated that the respondent No. 5 and his group who were in control of the company, had decided to make a fresh issue of share capital to themselves at par so as to strengthen their control over the company. V.4 We have already noticed that Article 93 specifically provides inter alia that every notice of a meeting of the Company shall contain a statement of the business to be transacted thereat and no General Meeting, Annual or Extraordinary, shall be competent to enter upon, discuss or transact any business which has not been specifically mentioned in the notice or notices upon which it was convened. V.4.1 Additionally, in terms of Article 94, the relevant extract whereof is quoted hereunder : “94(a) In the case of an Annual General Meeting all business to be transacted at the meeting shall be deemed special except....... V.4.1 Additionally, in terms of Article 94, the relevant extract whereof is quoted hereunder : “94(a) In the case of an Annual General Meeting all business to be transacted at the meeting shall be deemed special except....... b) xxx xxx xxx xxx c) Where any item or business to be transacted at the meeting is deemed to be special as aforesaid, there shall be annexed to the notice of the meeting a statement setting out all material facts concerning ach special item of business, including in particular the nature and extent of the interest, if any, therein, or every Director, Secretaries and Treasurers, if any, and the manager, if any. V.4.2 The increase in issuance of share capital does not fall within the exceptions carved out in Article 94 as not being special business. Article 94 reflects the substance of Section 173 of the Companies Act, 1956 and it was therefore, incumbent for notice to be given not only indicating the issuance of the share capital as a special item of ­business but also giving a statement setting out all material facts relating thereto. The violation of this Article by the company is patent and the Annual General Meeting is to the extent of the violation vitiated thereby. V.4.3 In Pacific Coast Coal Mines Ltd. vs. Arbuthnot & Ors. (1917) AC 607 PC, the Privy Council was of the opinion : “that to render the notice a compliance with the Act under which it was given it ought to have told the shareholders, including those who gave proxies, more than it did. It ought to have put them in position in which each of them could have judged for himself whether he would consent, not only to buying out the shares of directors, but to releasing possible claims against them. Now this is just what it did not do and therefore, quite apart from the fact that the meeting was held in half an hour from the time the Act passed and before the shareholders could have had a proper opportunity of learning the particulars of what the Legislature had authorized, their Lordships are of opinion that the notice was bad, and that what was done was consequently ultra vires”. (pg. (pg. 282) V.4.4 Again in Baillie vs. Oriental Telephone and Electric Company Ltd., (1915) 1 Ch.D. 503 (CA) it was said by the Court of Appeal; “.....I feel no difficulty in saying that special resolutions obtained by means of a notice which did not substantially put the shareholders in the position to know what they were voting about cannot be supported, and in so far as these special resolutions were passed on the faith and footing of such a notice the defendants cannot can upon them.” (See also LIC vs. Escorts (1986) 1 SCC 246 at pg. 343]. V.5.1 The respondents have relied on Article 94(e) which says that “the company shall also carry out the requirements of Section 188 of the Act” to contend that due notice was given under Article 94 because the letter of Modular Finance had been forwarded to the shareholders. V.5.2 Section 188 provides that a meeting could be requisitioned by the prescribed number of members, after notice of any resolution which may properly be moved and is intended to be moved at a meeting together with a statement with respect to the matter referred to in any proposed resolution. Assuming that Modular Finance’s letter was in fact circulated, this could hardly be termed to be compliance with the requirement of Section 188 of the Act which deals with meetings called at the instance of requisitionist and circulation of a statement by the requisitionist of a proposed resolution and a statement in support thereof. Moreover, such a notice in terms of the proviso of Sub Section 3 of Section 188 is required to be given “in the same manner and, so far as practicable, at the same time as notice of the meeting, and where it is not practicable for it to be served or given at that time, it shall be served or given as soon as practicable thereafter”. Further it is clear from Article 94(e) that compliance with Section 188 was in addition to the requirements with the other parts of Article 94 which admittedly have not been complied with. V.5.3 The Division Bench found that there was no explanatory statement annexed to the notice and held that the respondents certainly committed an irregularity in not mentioning the proposal to increase and allot the share capital on the agenda of the annual general meeting. V.5.3 The Division Bench found that there was no explanatory statement annexed to the notice and held that the respondents certainly committed an irregularity in not mentioning the proposal to increase and allot the share capital on the agenda of the annual general meeting. However, it went on to hold that the irregularity did not vitiate the decision because it could be cured since the Pawar group already had majority control and also because the decision had been taken at the annual general meeting that an extraordinary general meeting would be called after proper notice to ratify the fresh issue of 17666 shares at Pawars. V.5.4 We are unable to accept the reasoning of the Division Bench. The two grounds which persuaded them not to interfere with the fresh issue are questionable. For one, we have already come to the conclusion that the sale of 3417 and 93 share to the Pawar Group was bad. The Pawar group did not legally have the majority to push through the decision to increase the share capital or to allot the further shares to themselves. For another, the majority cannot be permitted to ride rough shod over the provisions of the Articles and the Companies Act merely because they could if they so desired follow the proper procedure. The haste with which the Pawar Group sought to ensure their position in the company is evident from the fact that a Board Meeting was held immediately after the Annual General Meeting on 16.11.1985 at which the Board resolved to issue the additional 17,666 shares at par to the Pawar Group. There was no notice given of the Board meeting at all. V.6.1 The Respondent Company was bound to offer the further shares on a fresh issue of capital to the existing equity share holders in proportion to the capital paid up on the shares at that date. The Division Bench noted that this was provided in Section 81 of the Companies Act. However, because Section 81(3) does not apply to a private limited company (which the company was at that stage) and since according to the Division Bench, the Articles of Association did not require such further issue of shares to be allotted in any particular manner to the existing share holders, the allocation of the further issue to the respondent No. 5 and his group was not illegal or contrary to law. V.6.2 As a matter of fact the finding as to the absence of such a requirement in the Articles of Association of the Company was erroneous. Increase of share capital is dealt with in Articles 14 and 15. Article 15 says : “Subject to the directions that may be given by the meeting that sanctions the increase of capital (i) such new shares shall be offered to the persons who are at the date of the offer members of the Company in proposition as nearly as circumstances admit to the capital paid up on their shares at that date, (ii) the offer aforesaid shall be made by notice specifying the number of shares to which the member is entitled and limiting a time not less than fifteen days from the date of the ­offer, within which the offer, if not accepted, will be deemed to have been declined, (iii) after expiry of the time specified in the notice aforesaid or on the earlier intimation from the member to whom such notice is given that he declines to accept the shares offered, the Directors may dispose of the same in such manner as they think most beneficial to the Company.” (emphasis added) V.6.3 No offer was made by notice in writing in terms of this Article. The fresh shares were, as we have seen, allotted on the day they were issued before the expiry of 15 days without waiting for the expiry of the period. The allocation of shares to the Pawars’ group contrary to this Article was invalid. V.6.4 No court could possibly object to a ­decision on merits provided it is taken in accordance with law. The decision to issue all the additional shares to the Pawar Group at par may not by itself have warranted interference were it not for the manner in which the entire exercise was undertaken. V.6.5 During the course of the hearing both before the Division Bench and before this Court, the respondents offered to make an allotment of the issued capital to the appellants to participate prorata in the additional issuance. The offer did no more than what the company’s articles required to have been undertaken. VI Having effectively held in favour of the appellants, the question finally to be determined is what reliefs can be granted to them. The offer did no more than what the company’s articles required to have been undertaken. VI Having effectively held in favour of the appellants, the question finally to be determined is what reliefs can be granted to them. Reliefs VI.1 The respondents contended that the relief of cancellation of 17,666 shares cannot be granted in a petition under Section 155 petition as any reduction of capital must be made strictly in accordance with Sections 100 to 104 or Section 402 of the Companies Act. VI.2 The issue need not detain us as there was no such prayer made by the appellants. They have asked only for rectification of the share register by deletion of the names of the Pawar Group as shareholders in the company. The learned Single Judge merely directed the Board of Directors to dispose of the fresh shares, one can only assume, in accordance with the Articles of the Company and the Act. VI.3 Having effectively held on all issues in favour of the appellant the question remains as to whether we should, in exercise of our discretion under Section 155, grant the appellant the relief of rectification of the shares as claimed. Although the logical conclusion of our findings would be to set aside the transfers and restore the status quo ante, the question is should the share register of the company be directed to be rectified now in respect of shares, the impugned transfer of which took place more than 20 years ago? The respondents have submitted in the course of the hearing that this Court should not in any event disturb the status quo but should mould the relief by awarding compensation, if necessary as prayed for by the appellant. They have referred to the decision in Needle Industries (India) Ltd. V. Needle Industries (Newey) India Holding Ltd. 1981(3) SCC 333 in support of this submission. We agree. There has been a sea change in the factual scenario. Shantha has died. The company has become a public limited company. The respondents have been at the helm of the company more than two decades during the legal struggle. Many decisions must of necessity have been taken and implemented. The situation cannot now be unscrambled. It is a course of action which would make the company disfunctional harming the interests of the whole body of share holders, affect company’s employees, its creditors and customers. Many decisions must of necessity have been taken and implemented. The situation cannot now be unscrambled. It is a course of action which would make the company disfunctional harming the interests of the whole body of share holders, affect company’s employees, its creditors and customers. It is not as if we are able to grant any relief directly to the appellant except to the extent of setting aside the transfer. The appellant will still have to pursue her remedies for effective relief in the two pending suits in the District Court of Pune in which the appellant has prayed for specific performance of the contracts for sale of the shares. The outcome of the suits is uncertain. What is certain is that whatever the outcome of the litigation it will be another long round of litigation. Yet another factor to be borne in mind is that the appellant had her own role to play in contributing to the situation which she had to face eventually. Admittedly, Shanta and the appellant ultimately accepted the Chartered Accountant’s report. As we have noted, no reason whatsoever was given for the sudden change of attitude. If they could agree subsequently to pay the price they could have done so earlier, paid the price and then challenged the value. Further, the Single Judge also gave the appellant and Shanta an opportunity of paying the share price into the Court within a period of six weeks. Had the appellant and Shanta done so, they might have been in a stronger position vis-a-vis the Pawars in the appeal Court. VI.4 In these circumstances and weighing in the balance the comparative advantages and disadvantages of granting the appellant the relief of rectification, we are of the view that it would not be appropriate at this stage to exercise our discretion to grant the relief of rectification. However, the fact remains that the appellant has been wronged and she is entitled to be compensated. Section 155 of the Companies Act, allows the giving of damages in addition to or in lieu of rectification. In the pending suits, the appellant has put forward alternative prayers for payment of compensation of Rs. 3 crores on account of the 3417 shares and Rs. 1 crore for the transfer of the 93 shares in the event specific performance of the contracts was not grantable. In the pending suits, the appellant has put forward alternative prayers for payment of compensation of Rs. 3 crores on account of the 3417 shares and Rs. 1 crore for the transfer of the 93 shares in the event specific performance of the contracts was not grantable. It was pointed out by some of the respondents’ counsel, without prejudice to their contentions on merits, that the figure specified in the plaint, though on the higher side, could form a rough and ready basis to quantify the compensation. Having due regard to these submissions and in order to give a quietus to the litigation we are of the view that the ends of justice would be met by directing that the appellant should be compensated with an amount of Rs. 3 crores to be paid by the company to the appellant in full and final settlement of the appellant’s claims in respect of the 3417 and 93 shares. Additionally, the company will also allot shares to the appellant out of the 17,666 shares on par proportionate with the appellant’s present share holding. We are told that the appellant is at present employed by the company and is also a Director of the company. The appellant shall continue in this capacity for the appellant’s life time. VI.5 The appeals are accordingly disposed of without any order as to costs. Appeals accordingly disposed of. ****************