Ref. SMD/6059
October 17, 1994


President / Executive Directors
All the Stock Exchanges

Dear Sir,

Emblem of SE not necessary on the TD

A few Stock Exchanges have sought clarification from us regarding Item No. 1 of the guidelines for good or bad delivery of documents circulated by the Ministry of Finance to all Stock Exchanges vide letter F. No. 1/9/SE/90 dated August 30, 1991. The guideline stipulates that “Transfer Deeds in the prescribed form and printed with the words “For the ……. Stock Exchange” are to be considered as “good” delivery and that the stock exchange emblem may or may not be printed and month & year of printing may or may not be put on the reverse of the Transfer Deed”. However, it is observed that some of the Stock Exchanges are treating transfer deeds printed without the names of the stock exchange on the reserve as bad delivery. The guidelines are quite clear. The reverse inference that where the name of the stock exchange is not printed on the Transfer Deed, the document is to be treated as bad delivery, is incorrect.

In this connection, we enclose a copy of the clarification issued by the Registrar of Companies, Gujarat, Ahmedabad on the subject vide his letter No. ROC/GUJ/94-95 dated September 22, 1994, the contents of which are self-explanatory.

You are therefore, advised to please treat all Transfer Deeds with or without the inscription of the name of the Stock Exchange on the reverse as good delivery provided they are complete in all other respects and otherwise in order.

Please acknowledge receipt of the letter.

Yours faithfully,

C. B. Bhave
Sr. Executive Director

Encl: a/a





No.ROC/GUJ/94-95 Dated 22.9.94

Saurashtra Kutch Stock Exchange Ltd
21 New Jagnath
Dr. Yagnik Road
Rajkot 1

Regarding date stamping of Share Transfer Forms

With reference to your letter No. SKSE/SE/94-95/1260 dated 21.9.94, and letter No.UPSE/94-95 dated 20.9.94 of Shri (Dr) J. N. Gupta, Executive Director of the U. P. Stock Exchange Association Limited, addressed to M/s. Dalal & Co., Kanpur, (copy of which was faxed to me) regarding date stamping of share transfer form, I am to advise you as follows :-

As per Section 108(1A) of the Companies Act, 1956, every instrument of transfer of shares shall be in such form as may be prescribed. As per Clause 33 of Section 2 ibid, “prescribed” means prescribed by Rules made by the Central Government. The Central Government for the purposes of Companies Act, according to allocation of Business Rules made by the President of India pursuant to Article 77 of the constitution, means the Department of Company Affairs of Government of India and therefore, Ministry of Finance and for that matter, any other Department, has no authority to prescribe any instrument of transfer of shares. The Central Government in the Department of Company Affairs has by Rule 5-A(2) of Companies (Central Government), General Rules and Forms, 1956 prescribed Form No. 7-B, as the form for execution of the instrument of transfer of shares for the purposes of Section 108 of the Act, Form No. 7-B nowhere requires the name of any Stock Exchange to be printed anywhere in the instrument of transfer. In fact, there is no provision in any other law of the land requiring the name of any Stock Exchange to be printed on form 7-B. Instead, Clause (a) of sub-Section (1A) of Section 108 of the act, requires form 7-B to be presented to the prescribed authority (i.e. Registrar of Companies etc.) before any entry is made therein. Strictly speaking, name of any Stock Exchange also can not be entered in the Form before it is presented to the Registrar of Companies. However, item No. 1 of circular No. 1/9/SE/90 dated 30.8.91 of Ministry of Finance, suggests to ignore if the name of Stock Exchange on the reverse of the Form 7-B is printed, may be, for administrative reasons and given a concession that even if name of Stock Exchange in this manner is printed, the instrument would not be treated as bad delivery on the ground that already entry of the name of Stock Exchange has been made on the Form.

For better appreciation, Item No. 1 of the aforesaid circular is reproduced here-under :-

Sr. No.     Good or bad delivery         Remarks

Transfer deeds in the prescribed Stock Exchange emblem form and printed with the words Good may or may not be printed.
“for the Stock Exchange” Month and year of printing may or may not be put on the reverse of the transfer deed.

For valid reasons, there is no item in this circular which says that if the name of Stock Exchange is not printed on Form 7-B, the instrument would be a bad delivery.

Thus, the view of Shri (Dr.) J. N. Gupta, Executive Director of U. P. Stock Exchange Association Ltd., Kanpur, is erroneous being not supported by any provision of law. Incidentally, it may also be pointed out that Form 7-B need not be printed. It can be typed, cyclostyled , printed or legibly handwritten. If it is presented in blank, to the prescribed authority, the statutes requires the prescribed authority to stamp or otherwise endorse thereon, the date on which it is presented to him.

I hope this would amply make clear the legal position.

Yours faithfully,


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