2001 (1) TMI 872 - Commission - Companies Law

Supreme Court sets aside Forum's jurisdiction, advises seeking redress in share transfer dispute

The Supreme Court allowed the appeal, setting aside the Forum's judgment due to lack of jurisdiction in Calcutta. The complainant was advised to seek ... Territorial jurisdiction - cause of action - registered office principle in share transfer disputes - place of registration as locus of cause of action - jurisdiction of consumer forum in transfer of sharesTerritorial jurisdiction - cause of action - registered office principle in share transfer disputes - Calcutta Consumer Forum lacked territorial jurisdiction to entertain complaint concerning transfer of share certificates. - HELD THAT: - The Court applied the ratio in H.V. Jayaram (as cited in the judgment) that the cause of action for failure to deliver or effect transfer of share certificates arises at the place where the company's registered office is situated. The register of shares and the processes of transfer and registration were accepted to be maintained and effected at the company's registered office in Mumbai. Because the substantive act giving rise to the complaint (transfer/registration of shares) took place at the registered office, the Calcutta Forum did not have territorial jurisdiction to adjudicate the dispute. Consequently the Forum ought not to have entertained the complaint and its judgment cannot be upheld.Appeal allowed; judgment of the Forum set aside for lack of territorial jurisdiction and complainant may approach the appropriate Forum at the place of the company's registered office.Final Conclusion: The appeal is allowed and the consumer forum's order is set aside for lack of territorial jurisdiction; the complainant is at liberty to seek redress before the proper Forum at the company's registered office. The case involved a dispute over the transfer of shares. The complainant purchased 400 equity shares, but only 300 were transferred to his name. The opposite party objected to the jurisdiction of the Forum and raised concerns about fraud. The Forum ruled in favor of the complainant, but the opposite party appealed, arguing that the Forum in Calcutta lacked jurisdiction. Citing a Supreme Court decision, the appeal was allowed, and the judgment of the Forum was set aside due to lack of jurisdiction. The complainant was advised to seek redress before the proper Forum.