Company Law Board orders share transfer and issuance of duplicate certificates to rectify register of members

The company was directed by the Company Law Board to transfer 100 shares and 100 bonus shares to the petitioner, a share and stock broker, due to bad delivery issues. Despite difficulties faced by the petitioner in effecting the transfer and loss of the original share certificate, the company was instructed to issue duplicate share certificates for the lost shares and rectify the register of members within 21 days. The order emphasized the petitioner's bona fide acquisition of the shares and outlined the process for the company to update the register of members accordingly.

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Issues:
Transfer of shares, bad delivery, loss of share certificate, issuance of duplicate share certificates, rectification of register of members.

Transfer of Shares:
The petitioner, a share and stock broker, sought directions against a company to transfer 100 shares and 100 bonus shares in its favor due to bad delivery issues. The petitioner had purchased shares on behalf of various constituents, including the shares in question, and faced difficulties when the company returned shares as bad delivery due to signature discrepancies. Despite efforts to rectify the situation, the company advised the petitioner to obtain court orders for the transfer. The company was directed to register the shares in the petitioner's name and issue duplicate share certificates as per the Companies Act, 1956.

Loss of Share Certificate:
The petitioner, having lost the original share certificate during office shifting, faced challenges in effecting the transfer of shares. The company required the petitioner to provide appropriate orders from a competent court to process the transfer request. Despite the loss of the original certificate, the company was directed to issue duplicate share certificates in lieu of the lost shares and rectify the register of members accordingly.

Issuance of Duplicate Share Certificates:
The issuance of duplicate share certificates was governed by rule 4(3) of the Companies (Issue of Share Certificates) Rules, 1960. The company was directed to issue duplicate share certificates for the lost shares and the bonus shares, and register the impugned shares in favor of the petitioner within 21 days. The company was further instructed to cancel the original shares and inform the concerned shareholder about the cancellation.

Rectification of Register of Members:
In light of the petitioner's bona fide acquisition of the shares, and the lack of response from the registered shareholder, the company was directed to rectify the register of members by registering the shares in the petitioner's name. The order provided clarity on the process to be followed by the company in canceling the original shares and updating the register of members accordingly.

This comprehensive analysis of the judgment highlights the issues related to the transfer of shares, loss of share certificate, issuance of duplicate share certificates, and rectification of the register of members, providing a detailed overview of the legal proceedings and directives issued by the Company Law Board, Chennai.

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