Rectification of register of members and restoration of shares upheld where duplicate certificates and deficient transfer procedures proved fraudulent.

Rectification of the register of members was sustained where duplicate share certificates were issued and transfers occurred without prescribed procedure or due diligence; the legal basis relied on statutory provisions governing certificates and transfers and precedent permitting tribunal relief in clear frauds, and the effect is restoration of shares to the registered shareholder or payment of market-value damages and costs. The tribunal found failures in indemnity formats, notice and communication, address records, and inconsistent loss claims, and rejected limitation, exclusive civil jurisdiction and non-joinder objections, allowing tribunal adjudication and consequential relief in favour of the registered shareholder.

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Issues: Whether the National Company Law Tribunal correctly exercised its power under Section 59 of the Companies Act, 2013 to order rectification of the register of members, restore the shares to the registered shareholder and award damages/costs where duplicate share certificates were issued and shares were transferred without following prescribed procedure and due diligence.

Analysis: The Tribunal examined statutory provisions governing certificates and transfers (Sections 46, 56 and 59 of the Companies Act, 2013) and applicable regulatory guidelines (including SEBI Circular No. 1 (2000-2001) dated 09.05.2001 and transfer norms). The Tribunal analysed factual findings that the registered shareholder remained in possession of the original share certificate until dematerialisation request in 2018; that duplicate certificates were issued on the basis of belated/defective documents; that prescribed indemnity formats, notice and communication requirements and other prescribed checks were not complied with; that communications from the company/RTA were sent to an outdated address; and that material discrepancies existed in the documents submitted by the claimant (multiple inconsistent reasons for loss, non-standard indemnity, lack of evidence of payment). The Tribunal considered precedent (including Adesh Kaur v. Eicher Motors and Chalasani Udaya Shankar v. Lexus Technologies) establishing that where an open-and-shut case of fraud is shown and the aggrieved person is the victim, the Tribunal may exercise powers under Section 59 and order rectification and consequential reliefs. It rejected arguments that the petition was time-barred, that civil courts alone have jurisdiction over disputed title/forgery, or that non-joinder of the transferee barred relief, on the facts that the fraud was discovered only on dematerialisation and the statutory scheme and authorities permit Tribunal adjudication where powers are vested in it.

Conclusion: The Tribunal's order directing rectification of the register, restoration of the shares to the registered shareholder, or alternatively awarding damages equivalent to market value, together with costs, is upheld. The appeal is dismissed and the Tribunal's remedy under Section 59 in favour of the registered shareholder is affirmed.

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