Malafied Ltd. would like to forfeit the shares allotted to a shareholder for non-payment of final call. The company has sent the notice to the address as per the records of the company and forfeited the shares. The defau

Forfeiture of shares means taking back of shares by the Company from the shareholders. Article 28 of Table-F of Schedule-I of the Companies Act, 2013 stipulates that, if a member of the company fails to pay any call, or instalment of a call, on the day appointed for payment thereof, the Board may, at any time thereafter during such time as any part of the call or instalment remains unpaid, serve a notice on him requiring payment of so much of the call or instalment as is unpaid, together with any interest which may have accrued. For a valid forfeiture, satisfaction of following conditions is necessary: Articles of Association must authorize the forfeiture of shares; Proper Notice is required to be sent to the shareholder; Board Resolution is required to be passed for forfeiture of shares; Power of forfeiture must be exercised bona fide and for the benefit of the company. In terms of Article 29 of Table F, the notice shall specify a further day, which shall not be earlier than the expiry of 14 days from the date of service of notice, on or before which the payment required by the notice is to be made. Further, the notice shall also mention that in the event of non-payment, on or before the day so named, the shares in respect of which the call was made shall be liable to be forfeited. According to Article 30 of Table F, if the requirements of any such notice as aforesaid are not complied with, any share in respect of which the notice has been given may, at any time thereafter, before the payment required by the notice has been made, be forfeited by a resolution of the Board to that effect. As per the conditions stipulated as above, the Malafied Ltd. has sent the notice to the shareholders at the address available as per records of the Company. In the case of Sparks vs. Liverpool Water Works Co. , Accidental non-receipt of notice of forfeiture by the defaulter is not a ground for relief against forfeiture regularly effected. Thus, the objection of defaulter is not valid .