INDIAN CHEMICAL PRODUCTS vs STATE OF ORISSA & ANR.

The Supreme Court held that under Section 38 of the Indian Companies Act, 1913, the ownership of shares can pass by operation of law, and the Board of Directors cannot refuse to amend the share register in such cases. The Court clarified that 'transmission' differs from 'transfer', with the former not requiring an instrument of transfer. The refusal by the directors to register the State of Orissa as the holder of shares was deemed mala fide, leading to the High Court's order for rectification being upheld.