What is an SLP?

The Constitution of India, under article 136, gives the Supreme Court the power to grant special
permission or leave to an aggrieved party to appeal against an order passed in any of the lower
courts or tribunals in India.

Through the SLP, an aggrieved party can appeal to higher authorities against any judgement
passed by any court or tribunal. This leave is granted when the case involves a question of law
relevant to the general public as well.

The aggrieved party or the petitioner filing the SLP has to give a brief synopsis of the facts and
issues presented in the case along with a list of dates specifying the chronology of events
pertinent to the judgement. Along with this are questions of law raised by the petitioner to appeal
against the judgement. These questions should pertain to laws relevant to the general public as
well.

Once registered and presented in the court, the petitioner will get a hearing before the court.
Subsequently, depending on the merits of the case, the court will issue a notice to the opposite
parties who will then file a counter affidavit stating their views. Its at this point that the court
will decide whether to grant leave to the petitioner or not. If the court grants leave, the case is
then converted into a civil appeal and will be argued afresh in the Supreme Court.

The court can rescind or revoke the earlier judgement, modify it or stick by it. The court can also
send the case back to the relevant lower court for fresh adjudication in light of principles laid
down by it or on account of any issues missed out by the lower court.

According to article 141 of the Indian Constitution, the Supreme Courts judgement is declared
as law of the land and is binding on all courts in India.

The petitioner usually gets 90 days from the date of receiving the final copy of the judgement of
the court or relevant tribunal to file an SLP. But the court may be flexible on this deadline

Writ
A writ is a direction that the Court issues, which is to be obeyed by the authority/person to whom
it is issued.

Writ Petition
A petition seeking issuance of a writ is a writ petition. Pits in the first instance in the High Courts
and the Supreme Court are writ petitions.

A writ of habeas corpus is issued to an authority or person to produce in court a person who is
either missing or kept in illegal custody. Where the detention is found to be without authority of
law, the Court may order compensation to the person illegally detained.

A writ of mandamus is a direction to an authority to either do or refrain from doing a particular

act. For instance, a writ to the Pollution Control Board to strictly enforce the Pollution Control
Acts. For a mandamus to be issued, it must be shown:
a) That the authority was under obligation, statutory or otherwise to act in a particular manner;
b) that the said authority failed in performing such obligation;
c) that such failure has resulted in some specific violation of a fundamental right of either the
petitioner or an indeterminate class of persons.

A writ of certiorari is a direction to an authority to produce before the Court the records on the
basis of which a decision under challenge in the writ petition has been taken. By looking into
those records, the Court will examine whether the authority applied its mind to the relevant
materials before it took the decision. If the Court finds that no reasonable person could come to
the decision in question, it will set aside (quash) that decision and give a further direction to the
authority to consider the matter afresh.
For instance, the permission given by an authority to operate a distillery next to a school can be
challenged by filing a petition asking for a writ of certiorari.

A writ of prohibition issues to prevent a judicial authority subordinate to the High Court from
exercising jurisdiction over a matter pending before it. This could be on the ground that the
authority lacks jurisdiction and further that prejudice would be caused if the authority proceeds
to decide the matter. Where the authority is found to be biased and refuses to rescue, a writ of
prohibition may issue.

A petition seeking a writ of quo warranto questions the legal basis and authority of a person
appointed to public office. For instance, the appointment of a member of a Public Service
Commission not qualified to hold the post can be questioned by a writ of quo warranto and
appointment nullified if found to be illegal.

A writ of declaration issues to declare an executive, legislative or quasi- judicial act to be invalid
in law. For instance, a court could declare S. 81 of the Mental Health Act, 1987 that permits use
of mentally ill patients for experimentation to be violative of the fundamental rights of the
mentally ill and therefore illegal and void. A petition seeking such declaratory relief must also
necessarily seek certain consequential reliefs. For instance, immediate discontinuance of the
illegal practice and appropriate remedial compensation.

These apart, a writ petition could seek other writs, orders and directions which the Court may
fashion in response to the facts placed before it

TRANSFER OF SHARES

Section 108 in The Companies Act, 1956

108. Transfer not to be registered except on production of instrument of transfer.
(1) A company shall not register a transfer of shares in, or debentures of, the company, unless a
proper instrument of transfer duly stamped and executed by or on behalf of the transferor and by
or on behalf of the transferee and specifying the name, address and occupation, if any, of the
transferee, has been delivered to the company along with the certificate relating to the shares or
debentures, or if no such certificate is in existence, along with the letter of allotment of the shares
or debentures: Provided that where, on an application in writing made to the company by the
transferee and bearing the stamp required for an instrument of transfer, it is proved to the
satisfaction of the Board of directors that the instrument of transfer signed by or on behalf of the
transferor and by or on behalf of the transferee has been lost, the company may register the
transfer on such terms as to indemnity as the Board may think fit: Provided further that nothing
in this section shall prejudice any power of the company to register as shareholder or debenture
holder any person to whom the right to any shares in, or debentures of, the company has been
transmitted by operation of law. 23 (1A) Every instrument of transfer of shares shall be in such
form as may be prescribed, and-
(a)every such form shall, before it is signed by or on behalf of the transferor and before any entry
is made therein, be presented to the prescribed authority, being a person
1. Subs. by Act 31 of 1965, s. 62 and Sch., for" fifteen" (w. e. f. 15- 10- 1965 ).
2. Ins. by s. 13, ibid. (w. e. f. 1- 4- 1966 ).
3. Subs. by Act 37 of 1966, s. 2. for sub- sections (1A), (1B) and (1C) (w. e. f. 1- 4- 1966 ).
already in the service of the Government, who shall stamp or otherwise endorse thereon the date
on which it is so presented, and
(b) every instrument of transfer in the prescribed form with the date of such presentation stamped
or otherwise en- dorsed thereon shall, after it is executed by or on behalf of the transferor and the
transferee and completed in all other respects, be delivered to the company,-
(i) in the case of shares dealt in or quoted on a re- cognised stock exchange, at any time before
the date on which the register of members is closed, in accordance with law, for the first time
after the date of the presentation of the prescribed form to the prescribed authority under clause
(a) or within 1 twelve months] from the date of such presentation, whichever is latter;
(ii)in any other case, within two months from the date of such presentation.
(1B) Notwithstanding anything contained in sub- section (1A),- an instrument of transfer of
shares, executed before the commencement of section 13 of the Companies (Amendment) Act,
1965 , (31 of 1965 ). or executed after such commencement in a form other than the prescribed
form, shall be accepted by a company,-
(a) in the case of shares dealt in or quoted on a recognised stock exchange, at any time not later
than the expiry of six months from such commencement or the date on which the register of
members is closed, in accordance with law, for the first time after such commencement,
whichever is later;
(b)in any other case, at any time not later than the expiry of six months from such
commencement.
(1C)Nothing contained in sub- sections (1A) and (1B) shall apply to-
(A)any share-
(i) which is held by a company in any other body corporate in the name of a director or nominee
in pursuance of sub- section (2), or as the case may be, sub- section (3), of section 49, or
(ii) which is held by a corporation, owned or controlled by the Central Government or a State
Government, in any other body corporate in the name of a director or nominee, or
1. Subs. by Act 31 of 1988, s. 15 (w. e. f. 15- 6- 1988 ).
(iii)in respect of which a declaration has been made to the Public Trustee under section 153B, if-
(1) the company or corporation, as the case may be, stamps or otherwise endorses, on the form of
transfer in respect of such share, the date on which it decides that such share shall not be held in
the name of the said director or nominee or, as the case may be, in the case of any share in
respect of which any such declaration has been made to the Public Trustee, the Public Trustee
stamps or otherwise endorses, on the form of transfer in respect of such share under his seal, the
date on which the form is presented to him, and
(2)the instrument of transfer in such form, duly completed in all respects, is delivered to the-
(a) body corporate in, whose share such company or corporation has made investment in the
name of its director or nominee, or
(b) company in which such share is held in trust, within two months of the date so stamped or
otherwise endorsed; or
(B)any share deposited by any person with-
(i)the State Bank of India, or
(ii)any scheduled bank, or
(iii) any banking company (other than a scheduled bank) or financial institution approved by the
Central Government by notification in the Official Gazette (and any such approval may be
accorded so as to be retros- pective to any date not earlier than the 1st day of April, 1966 ), or
(iv) the Central Government or a State Government or any corporation owned or controlled by
the Central Government or a State Government, by way of security for the repayment of any loan
or ad- vance to, or for the performance of any obligation undertaken by, such person, if-
(1)the bank, institution, Government or corporation, as the case may be, stamps or otherwise
endorses on the form of transfer of such share-
(a)the date on which such share is returned by it to the depositor, or
(b)in the case of failure on the part of the depositor to repay the loan or advance or to perform the
obligation, the date on which such share is released for sale by such bank. institution,
Government or corporation, as the case may be, or
(c) where the bank, institution, Government or corporation, as the case may be, intends to get
such share registered in its own name, the date on which the instrument of transfer relating to
such share is executed by it; and
(2)the instrument of transfer in such form, duly completed in all respects, is delivered to the
company within two months from the date so stamped or endorsed. Explanation.- Where any
investment by a company or a cor- poration in the name of its director or nominee referred to in
clause (A) (i) or clause (A) (ii), or any declaration referred to in clause (A) (iii), or any deposit
referred to in clause (B), of this sub- section is made after the expiry of the period or date
mentioned in clause (a) of sub- section (1B) or after the expiry of the period mentioned in clause
(b) of that sub- section, as the case may be, the form of transfer, in respect of the share which is
the subject of such investment, declaration or deposit, means the prescribed form; or
(C)any share which is held in any company by the Central Government or a State Government in
the name of its nominee, except that every instrument of transfer which is executed on or after
the 1st day of October, 1966 , in respect of any such share shall be in the prescribed form.]
(1D) Notwithstanding anything in sub- section (1A) or sub- section (1B) 1 or sub- section (1C)],
where in the opinion of the Central Gov- ernment it is necessary so to do to avoid hardship in
any case, that Government may on an application made to it in that behalf, extend the periods
mentioned in those sub- sections by such further time as it may deem fit 1 whether such
application is made before or after the expiry of the periods aforesaid]; and the number of
extensions
1. Ins. by Act 37 of 1966, s. 2 (w. e. f. 1- 4- 1966 ).
granted hereunder and the period of each such extension shall be shown in the annual report laid
before the Houses of Parliament under section 638.]
(2) In the case of a company having no share capital, sub- section (1) shall apply as if the
references therein to shares were references instead to the interest of the member in the company.
(3) 1Nothing contained in this section shall apply to transfer of security effected by the transferor
and the transferee both of whome are entered as beneficial owners in the records of a depository.]
Restriction on acquisition of certain shares.

Transfer of shares or debentures (SEC 82)

Section 82 of Companies Act, 1956 - Nature of shares. The shares or other interest
of any member in a company shall be movable property, transferable in the manner
provided by the articles of the company.

The shares or debentures or other interest of any member in a company shall be

movable property, transferable by the articles of the company.

According to sec 82 of companies act, 1956 shares or debentures of any member in

a company shall be movable property, transferable in the manner provided by the
articles of the company. It means that subject to the restrictions, if any, which may
have been imposed by the articles, a shareholder has an absolute right to dispose
of his shares or debentures. ( Smith Knight Co. (1868) 4 A.C. 20). Generally, the
articles f the private company stipulate that a shareholder desiring to transfer his
shares should offer the same to an existing members. In Lyle& Scott Ltd. Vs.
Scotts Trustees [(1959) A.C. 763], the articles provided that a person desiring
to transfer his shares must inform the secretary about the same, and must sell his
shares to a member willing to buy them. A shareholder agreed to sell his shares to
an outsider, without informing the secretary. It was held that the shareholder was
bound by the Articles, and he couldnt transfer the shares against the articles.

If the Articles of a company give an absolute discretion to the directors to refuse to

register the transfer without specifying any reasons, the provisions of the articles
are binding not only on transferring member, but also on the outsider transferee,
and therefore, if the directors refuse to transfer without giving any reasons, neither
the transferor nor the transferee of the shares can question the same in the court of
law. (Berry and Stewart vs. Tottenham, (1935) 5 Comp. Cas. 472 [ch. D] ) In
re Smith and Fawcett Ltd. [(1942) 1 All E.R. 524] the articles provided that,
the directors may in their absolute and uncontrolled discretion refuse to register
any transfer of shares. The company had only 2 directors and each one of them
also held half of the companys capital. On the death of one of these directors, his
executor applied for the transfer of shares n his own name. The surviving director
refused to transfer of the whole holding offering to register the transfer of a part
only and buy the remainder himself. It was held that in view of the language of the
article and also the fact that the power was being exercised bona fide in the interest
of the company, the court could not interfere.

The discretion of the directors to decline to register a transfer without giving any
reasons does not mean the power to act arbitrarily. Discretion implies just and
proper consideration of the proposal on ythe facts and circumstances of the case.
[(Bajaj Auto Ltd. Vs. N.K. Firodia, AIR 1971 S.C. 321; Discoverers Finance
Corporation Ltd., Re (1910) 1 ch 207; Lindlars case (1910) 1 Ch. 312
(C.A.)} The directrs are in a fiduciary position both towards the company and the
shareholders. They should exercise the discretion in the interest of the company,
and moreover they should act bona fide. In Bajaj Auto Ltd. Vs. N.K. Firodia,
[Smith and Fawcett Ltd., Balwant Transport Co. vs. Deshpande, AIR 1956
Nag. 20; Harinagar Sugar Mills vsShyam Sunder, AIR 1961 SC 1669], Art. 52
of the appellant company provided that the directors might at their absolute an
uncontrolled discretion decline to register any transfer of shares. The directors
refused to register the transfer of shares in the name of the respondents, mainly on
the ground that the respondents, who already hold substantial no of shares in the
appellant company, would get more numerical strength in the company. The
Supreme Court held that the directors acted arbitrarily and unjustifiably in refusing
the transfer, and therefore, they could not refuse to register the transfer of shares in
this case.

It has been held by the Supreme Court in Bajaj Auto Ltd. Vs Company Law
Board ( AIR 1999 SC 345), that the power of the Board of Directors to refuse
registration of transfer must be exercised in the interest of the company and the
general body of shareholders.

The ground that the company purchasing the shares of another company wanted to
get controlling interest in the other company, that itself cannot be a ground to
refuse to transfer the shares unless and until it can be shown that the purchasers
were undesirable persons and after gaining control of the company they will act
against the company and the shareholders interest.

It was further held that if registration of certain shares of Company A in favour of

Company B, would not reach a stage where inter-connection between the two
companies is established, the refusal to transfer the shares will not be considered to
be valid.

Debt
A corporation borrows money to fund current operations or expand the business.
The use of debt allows a company to earn a higher return on equity or shareholder
capital. Mezzanine debt is a form of subordinated debt. Mezzanine is a fancy name,
and this type of debt can provide fancy benefits for both borrowers and lenders.
Senior Debt & Subordinate Debt
The different types of funding a corporation can access are based on the level of
protection given to the provider of the money. Senior debt has first rights to a
company's assets in the case of bankruptcy. Subordinated debt will be paid out of
assets left after the senior debt lender has recovered its claims. Equity financing is
share ownership, and in the event of bankruptcy, shareholders are last in line for
any proceeds out of bankruptcy. A company can also have secured debt, which as
specific assets pledged against the debt. In most cases, the senior debt lender has a
say whether or not a company can borrow through the secured debt route.

Definition of 'EQUITY'
1. A stock or any other security representing an ownership interest.

2. On a company's balance sheet, the amount of the funds contributed by the

owners (the stockholders) plus the retained earnings (or losses). Also referred to as
"shareholders' equity".

3. In the context of margin trading, the value of securities in a margin account

minus what has been borrowed from the brokerage.

4. In the context of real estate, the difference between the current market value of
the property and the amount the owner still owes on the mortgage. It is the amount
that the owner would receive after selling a property and paying off the mortgage.

5. In terms of investment strategies, equity (stocks) is one of the principal asset

classes. The other two are fixed-income (bonds) and cash/cash-equivalents. These
are used in asset allocation planning to structure a desired risk and return profile for
an investor's portfolio.

'EQUITY' explained:
The term's meaning depends very much on the context. In finance, in general, you
can think of equity as ownership in any asset after all debts associated with that
asset are paid off. For example, a car or house with no outstanding debt is
considered the owner's equity because he or she can readily sell the item for cash.
Stocks are equity because they represent ownership in a company.

Definition of 'Debt/Equity Ratio'

A measure of a company's financial leverage, calculated by dividing its total
liabilities by stockholders' equity.It indicates what proportion of equity and debt the
company is using to finance its assets.
Note: Sometimes only interest-bearing, long-term debt is used instead of total
liabilities in the calculation.

Also known as the Personal Debt/Equity Ratio, this ratio can be applied to personal
financial statements as well as corporate ones.

'Debt/Equity Ratio' explained:

A high debt/equity ratio generally means that a company has been aggressive in
financing its growth with debt. This can result in volatile earnings as a result of the
additional interest expense.

If a lot of debt is used to finance increased operations (high debt to equity), the
company could potentially generate more earnings than it would have without this
outside financing. If this were to increase earnings by a greater amount than the
debt cost (interest), then the shareholders benefit as more earnings are being
spread among the same amount of shareholders. However, the cost of this debt
financing may outweigh the return that the company generates on the debt through
investment and business activities and become too much for the company to
handle. This can lead to bankruptcy, which would leave shareholders with nothing.

The debt/equity ratio also depends on the industry in which the company operates.
For example, capital-intensive industries such as auto manufacturing tend to have a
debt/equity ratio above 2, while personal computer companies have a debt/equity
of under 0.5.

Definition of 'Corporate Debt Restructuring'

The reorganization of a company's outstanding obligations, often achieved by
reducing the burden of the debts on the company by decreasing the rates paid and
increasing the time the company has to pay the obligation back. This allows a
company to increase its ability to meet the obligations. Also, some of the debt may
be forgiven by creditors in exchange for an equity position in the company.

'Corporate Debt Restructuring' explained:

The need for a corporate debt restructuring often arises when a company is going
through financial hardship and is having difficulty in meeting its obligations. If the
troubles are enough to pose a high risk of the company going bankrupt, it can
negotiate with its creditors to reduce these burdens and increase its chances of
avoiding bankruptcy. In the U.S., Chapter 11 proceedings allow for a company to get
protection from creditors with the hopes of renegotiating the terms on the debt
agreements and survive as a going concern. Even if the creditors don't agree to the
terms of a plan put forth, if the court determines that it is fair it may impose the
plan on creditors.

Articles of associations: India

In the Table A of Schedule 1 of the Companies Act, 1956 is given a model regulations for the
management of the company limited by shares. All or any of the regulations contained in

The Article of Association contains the following details:

1. The powers of directors, officers and the shareholders as to voting etc.,

2. The mode and form in which the business of the company is to be carried out.

3. The mode and form in which the changes in the internal regulations can be
made.

4. The rights, duties and powers of the company as well as the members who
are included in the Articles of Association.

The article is binding not only to the existing members, but also to the future members who may
join in the future. The hires of members, successors and legal representatives are also bound by
whatever is contained in the Article. The Articles bind the company and its members as soon as
they sign the document. It is a contract between the company and its members. Members have
certain rights and duties towards the company and the company have certain obligations towards
its members. At the same time the company also expects some duties and obligations which the
member has to fulfil for the smooth functioning of the company.