Tribunal orders Company to register share transfer, directs compliance within specified timelines

The Tribunal found the Company's refusal to register the transfer of shares arbitrary and unjustifiable. It directed the respondents to register the transfers and rectify the register of shareholders accordingly. The Petitioner was instructed to submit necessary documents within three weeks, and the Company was ordered to comply within three weeks thereafter. The Petitioner was entitled to all consequential benefits from the transfer of shares. No costs were awarded.

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Issues Involved:
1. Registration of transfer of 20,000 equity shares.
2. Rectification of the register of shareholders for 20,000 equity shares.
3. Registration of transfer of 12,500 equity shares.
4. Rectification of the register of shareholders for 12,500 equity shares.
5. Validity of the rejection of share transfer by the Company.
6. Delay in filing the Company Petition.

Issue-wise Detailed Analysis:

1. Registration of transfer of 20,000 equity shares:
The Petitioner purchased 20,000 equity shares from Mr. T. Shahul Hameed on 10.04.2015 and complied with all statutory formalities, including public notices and submission of necessary documents to the Company. The Company rejected the transfer request citing non-enclosure of share certificates and the Petitioner's alleged disruptive conduct. The Tribunal found that the transferor provided affidavits and indemnity bonds declaring the loss of original share certificates and requested duplicate certificates. The Tribunal held that the Company could not insist on original certificates when the transferor had declared them lost and requested duplicates.

2. Rectification of the register of shareholders for 20,000 equity shares:
The Tribunal directed the respondents to rectify the register of shareholders by incorporating the Petitioner's name in place of Mr. T. Shahul Hameed for the 20,000 equity shares, effective from the lodgement of the share transfer request on 13.08.2015.

3. Registration of transfer of 12,500 equity shares:
The Petitioner purchased 12,500 equity shares from Mr. P.A. Ibrahim Haji on 30.06.2015, following all necessary formalities. The Company rejected this transfer on similar grounds as the previous one. The Tribunal noted that the transferor also provided affidavits and indemnity bonds for the lost share certificates. The Tribunal ruled that the Company’s insistence on original certificates was unjustified under these circumstances.

4. Rectification of the register of shareholders for 12,500 equity shares:
The Tribunal directed the respondents to rectify the register of shareholders by incorporating the Petitioner's name in place of Mr. P.A. Ibrahim Haji for the 12,500 equity shares, effective from the lodgement of the share transfer request on 13.08.2015.

5. Validity of the rejection of share transfer by the Company:
The Company cited several reasons for rejecting the transfer requests, including the Petitioner's alleged disruptive behavior and pending criminal and civil cases. The Tribunal found these reasons untenable, emphasizing that personal and family disputes should not interfere with legal processes. The Tribunal highlighted that the Company’s actions must be fair and sensible, referencing the Supreme Court's judgment in Bajaj Auto Limited Vs. N.K. Firodia, which states that the discretion of the Board of Directors should not be exercised arbitrarily.

6. Delay in filing the Company Petition:
The respondents argued that the petition was barred by laches and limitation. However, the Tribunal had already condoned the delay in its order dated 30.09.2016, and this could not be reopened. The Tribunal confirmed that the petition was filed within the limitation period, considering the effective date of Section 434 of the Companies Act, 2013.

Conclusion:
The Tribunal concluded that the Company's refusal to register the transfer of shares was arbitrary and unjustifiable. It directed the respondents to register the transfers and rectify the register of shareholders accordingly. The Petitioner was instructed to submit all necessary documents within three weeks, and the Company was ordered to comply within three weeks thereafter. The Petitioner was entitled to all consequential benefits from the transfer of shares. No order as to costs was made.

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