Case Analysis: Share Certificates are movable property under Sale of Goods Act
Sonali Bank vs Bengal Liner Ltd. & Ors
Reference: 42 DLR (HCD) (1990) 487
An application was filed by United Commercial Bank Limited (UCBL), the petitioner bank before the Hon’able Court for vacating the order of attachment and sale in respect of 25000 share certificates which are lying with the petitioner-bank in order to satisfy its loan given to the judgment debtor. In order to determine the case an important issue was to determine whether the Share Certificates were goods under the Sale of Goods Act or not. In this connection the Petitioner Lawyer Mr. Rafiq-ul-Huq submitted that the share certificates is defined as goods in section 2(7) of the Sale of Goods Act which runs as follows,
“’goods’ means every kind of movable property other than actionable claims and money; and includes electricity, water, gas, stock and shares, growing crops, grass, and things attached to or forming part of the land which are agreed to be severed before sale or under the contract of sale”
From the aforesaid provision of the Sale of Goods Act it appears that the shares of a company are also goods and as such this is movable property.
He also submitted that the share certificates being movable property within the meaning of section 2(7) of the Sale of Goods Act, the transaction of the same becomes complete as soon as the same along with the documents to transfer is delivered.
The Hon’able Court inter alia accepted this contention of Mr. Rafiqul Haque and declared that the attachment of the share certificates of judgment debtor 02 which are lying with the petitioner-bank in order to satisfy its loan given to the judgment debtor long before the attachment order cannot be sustainable in law.