2018 (1) TMI 922 - Tri - Companies Law

Tribunal Allows Petition Against SBI Under Companies Act

Kamlesh Kalidas Shah Versus State Bank of India

The Tribunal found the petition maintainable against State Bank of India (SBI) under the Companies Act, 2013, rejecting the argument that SBI is governed ... Transfer of shares - due to mismatch of signatures the Bank had refused to transfer those shares and put “Stop mark” - whether this Petition is not maintainable against the State Bank of India being not incorporated as a Company under the provisions of the Companies Act? - Held that:- Respondent No. 5 has stated in the Affidavit in Reply that the shares were lost by him and the claimant Petitioner is not a bona fide person to lodge the claim in SBI records. A question has been raised that if the shares were lost then why a Police Complaint or FIR was not lodged?. Otherwise also, there is no corroborative evidence in support of the alleged claim of loss of shares. In the absence of any substantial proof we are not persuaded by this argument of the Respondent. This Petition is maintainable against the State Bank of India as per the in-depth discussion made hereinabove and that the question of Limitation in respect of the impugned transaction in question is concerned do not apply because the transaction has happened at the period when the Old Companies Act, 1956 was in operation. However, the Petition filed against State Bank of India revolves around the lodging of claim in respect of only 100 shares as per the specifications supra and not in respect of total 200 shares. As a result, our Order is confined to those 100 shares only, details as per supra, which were lodged for transfer in the prescribed record by the State Bank of India. The Petition is therefore, partly allowed Issues Involved:1. Maintainability of the petition against State Bank of India (SBI) under the Companies Act, 2013.2. Barred by limitation.3. Merits and facts regarding the transfer of shares.Issue-wise Detailed Analysis:1. Maintainability of the Petition Against SBI:The primary issue was whether the petition filed under Section 58(4) of the Companies Act, 2013, for the transfer of shares was maintainable against SBI, which is constituted under the State Bank of India Act, 1955, and not the Companies Act, 2013. The respondent argued that the provisions of the Companies Act do not apply to SBI, as it is governed by its own Act, which is a complete code in itself. The respondent cited a previous order by the Company Law Board (CLB) which held that SBI is not a company under the Companies Act, thus the petition was not maintainable.The petitioner countered by arguing that Section 1(4)(c) of the Companies Act, 2013, applies to banking companies, including SBI, and there is no inconsistency between the SBI Act and the Companies Act regarding the transfer of shares. The petitioner also cited a divergent view from another CLB order which directed SBI to issue duplicate shares to the petitioner.The Tribunal concluded that the provisions of the Companies Act, 2013, apply to banking companies, including SBI, as there is no inconsistency between the two Acts. The Tribunal noted that the SBI Act does not provide an overriding provision that excludes the application of the Companies Act. Therefore, the petition was maintainable under the Companies Act, 2013.2. Barred by Limitation:The respondent argued that the petition was barred by limitation as it was filed 18 years after the refusal of the share transfer by SBI. The petitioner explained that the delay was due to ongoing civil and criminal proceedings, and Section 14 of the Limitation Act, 1963, allows the exclusion of the time during which the petitioner was pursuing other legal remedies. The Tribunal agreed with the petitioner, noting that under the old Companies Act, 1956, there was no specific time limit for filing an appeal regarding the rectification of the register of shares. The Tribunal held that it would be unfair and unjust to dismiss the petition on the grounds of limitation, especially when the petitioner was actively pursuing other legal remedies.3. Merits and Facts Regarding the Transfer of Shares:The petitioner sought the transfer of 200 shares of SBI, but the Tribunal found that only 100 shares were lodged for transfer with SBI. The petitioner had submitted claims for 50 shares purchased from Mr. Jolly Champaklal Shah and another 50 shares purchased from Rukmaniben Babulal. The Tribunal noted that the mismatch of signatures was the reason for the refusal of the transfer by SBI. The Tribunal also considered the ongoing civil and criminal cases related to these shares.The Tribunal concluded that the petition was maintainable for the 100 shares that were lodged for transfer, and not for the entire 200 shares claimed by the petitioner. The Tribunal directed SBI to transfer the 100 shares to the petitioner and to provide any corporate benefits associated with these shares.Conclusion:The Tribunal held that the petition was maintainable under the Companies Act, 2013, and the issue of limitation did not apply due to the ongoing legal proceedings and the provisions of the old Companies Act, 1956. The Tribunal allowed the petition for the transfer of 100 shares and directed SBI to take necessary actions accordingly. The petition was partly allowed and disposed of.