Transfer of Assets

2025 CLD 587 LAHORE-HIGH-COURT-LAHORE Judicial Precedent

Ss.4, 5, 282(5) & PreambleStamp Act (II of 1899), S.27-A & Schedule IConstitution of Pakistan, Art. 143Intra Court AppealInconsistency in Federal and Provincial lawsMerger of companiesTransfer of assetsStamp duty, charging of

Appellant / company was aggrieved of charging of stamp duty on transfer of assets as a result of merger of two companies under the order of High Court

Validity

Objective to enact Companies Act, 2017 was to protect interests of shareholders, creditors, stakeholders and general public by inculcating principles of good governance and safeguarding minority interests in corporate entities and providing alternate mechanism for expeditious resolution of corporate disputes as well as matters connected thereto, as was mentioned in its preamble, read with the provisions of Ss. 4 & 5 of Companies Act, 2017

Hinderance by way of imposing stamp duty and other taxes would take away companies law jurisdiction from High Court to other Provinces

Conflict of law is created only when the two, i.e. the Federation and the Province, simultaneously have authority and in such circumstances, Federal Law would prevail

Provisions of Ss. 4 & 282(5) of Companies Act, 2017 were part of Federal Law, therefore, it prevailed over the provision of Provincial Law, i.e. S. 27-A of Stamp Act, 1899

High Court directed Chief Secretary of Province of the Punjab to file a detailed report on or before the next date, explaining progress made in the meeting to resolve the matter

High Court further directed that if matter would not be resolved despite efforts of the Chief Secretary of Province of the Punjab, then the same would be decided on its own merits, after discussing legal anthropology of relevant provisions of law, i.e. the Companies Act, 2017 and Stamp Act, 1899

High Court granted interim injunction in favour of appellant / company, since vires of the judgment passed by Judge in Chambers of High Court, in case titled Jadeed Feeds Industries (Pvt.) Limited v. Board of Revenue, Punjab through Chief Inspector of Stamps and others, reported as 2024 CLD 1570 was under challenge and balance of convenience for grant of interim relief also tilted in favour of appellant / company

Interim injunction was allowed accordingly.

2025 CLD 561 KARACHI-HIGH-COURT-SINDH Judicial Precedent

S.23Contract Act (IX of 1872), S. 23Civil Procedure Code (V of 1908), O.VII, R.11Specific Relief Act (I of 1877), S. 12Suit for specific performance of agreement to sellRejection of plaintMortgaged propertyTransfer of assetsRestrictions

Plaintiff company sought specific performance of agreement to sell regarding suit properties which were mortgaged with bank as security for a finance facility

Defendant company sought rejection of plaint on the plea that the suit was not maintainable

Validity

Provision of S. 23 of Financial Institutions (Recovery of Finances) Ordinance, 2001, did not operate retrospectively and transfers that occurred prior to promulgation of Financial Institutions (Recovery of Finances) Ordinance, 2001 were not to be treated as void

General restraints as contained in Ss. 23(1) & 23(2) of Financial Institutions (Recovery of Finances) Ordinance, 2001 could only set aside those registered transfers that had violated provisions of each of those subsections

Properties that were not furnished as security were not impacted by S. 23(2) of Financial Institutions (Recovery of Finances) Ordinance, 2001 prior to any decree passed and were valid transfers

Agreement of sale instituted for sale of a mortgaged property would be void under S. 23 of Contract Act, 1872 as the object of agreement of sale would be to defeat the provision of law i.e., S. 23 of Financial Institutions (Recovery of Finances) Ordinance, 2001

Right of redemption may be recognized in the context of transfers subject to S. 23 of Financial Institutions (Recovery of Finances) Ordinance, 2001

Jurisdiction to determine performance of agreement to sell as entered into between parties, in terms of Ss. 23(1) & 23(2) of Financial Institutions (Recovery of Finances) Ordinance, 2001 at all times vested with Banking Court and Civil Court did not have the requisite jurisdiction to entertain such suit

Plaint seeking specific performance of agreement to sell was barred under the provisions of Ss. 23(1) & 23(2) of Financial Institutions (Recovery of Finances) Ordinance, 2001 and was liable to be rejected under the provisions of O.VII, R. 11(d), C.P.C.

High Court rejected the plaint seeking specific performance of agreement to sell under O. VII, R. 11(d), C.P.C. as jurisdiction to consider the performance on the agreement of sale in respect of mortgaged property vested in Banking Court under Ss.23(1) & 23(2) of Financial Institutions (Recovery of Finances) Ordinance, 2001

Plaint was rejected in circumstances.

2009 CLD 915 KARACHI-HIGH-COURT-SINDH Judicial Precedent

S.23Transfer of Property Act (IV of 1882), S.23(1)Transfer of assetsScope

Restriction put up by S.23(1) of Transfer of Property Act, 1882, on customer relates only to assets or properties furnished to Financial Institutions as security by way of mortgage, lien, etc. whereas under S.23(2) of Financial Institutions (Recovery of Finances) Ordinance, 2001, transfer or alienation of any property by judgment-debtor is void transfer having no legal effect.

1969 PTD 451 MADRAS-HIGH-COURT-INDIA Judicial Precedent

Transfer of Assets Transfer to minor divided son-Applicability of S. 16(3)(a)(iv) Provision whether unconstitutional - Constitution of India, Art. 14.

1969 PTD 475 ANDHRA-PRADESH-HIGH-COURT-INDIA Judicial Precedent

Transfer of Assets Partition between Hindu father and minor sons-Share given to wife also-Whether income of minor sons and wife could be included in father's income-Partition whether "transfer" - Hyderabad Agricultural Income-tax Act, 1959, S. 9.

1965 PTD 633 SUPREME-COURT-INDIA Judicial Precedent

Transfer of Assets Transfer of assets-Personal property-Blending with joint family property and division of assets-Assets allotted to minors

Whether transferred directly or indirectly to minor children

Indian Income-tax Act, 1922, S. 16(3)(a)(iv).

1965 PTD 735 PATNA-HIGH-COURT-INDIA Judicial Precedent

Transfer of Assets Transfer of assets-Transfer of shares in company to wife and minor child - Consideration whether adequate - Break-up value and expected yield of shares whether can be considered-Transfer to Hindu undivided family-Whether indirect transfer to wife and minor children-Sections 16 (3) (a) & 16 (3) (b)-Whether valid

Indian Income-tax Act, 1922, Ss. 16 (3) (a) & 16 (3) (b).

1965 PTD 832 BOMBAY-HIGH-COURT-INDIA Judicial Precedent

Transfer of Assets Transfer of assets-Gift of shares to wife-Shares sold by wife at profit-Capital gains arising on sale-Whether "income arising from assets transferred" and includible in husband's income-Interest received on proceeds of sale-Portion attributable to capital gains, whether includible in husband's income-Indian Income-tax Act, 1922, S. 16(3)(a)(iii).