TaxTMI 
TaxTMI 
2008 (6) TMI 351
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....red to dispose of the said 200 shares, but he allegedly lost the same. On 21-9-1993, the appellant got a police report registered in the Sihani Gate Police Station, Ghaziabad. On or about 22-9-1993, the appellant approached and requested the fourth respondent-company for issue of duplicate Certificates in lieu of his lost shares along with all supporting documents, indemnity bonds and affidavits, etc. 3. On 5-1-1994. the fourth respondent-company got an Advertisement/Public Notice published in Newspapers calling upon to file objections, if any, against issue of duplicate Share Certificates to the appellant and also striking a note of caution to the public at large not to deal with the shares so specified in the advertisement. Having not received any objection from any one, the fourth respondent-company on 3-2-1994 issued duplicate Share Certificates to the appellant. The appellant transferred his shares in favour of Jayant Davar - the first respondent herein, which were registered in his name by the fourth respondent-company on 18-10-1994. The first respondent had been offered 50 Bonus Shares by the fourth respondent-company, which offer was profitably availed by him. The first ....
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.... same, came to know that 117335 shares of fourth respondent-company belonged to the Notified Persons of the group of late Harshad S. Mehta which were seized by CBI and remained in their custody. The letter also revealed that late Harshad S. Mehta and his group were notified by the Custodian on 8-6-1992 under the provisions of the Act and all properties belonging to them stood attached simultaneously with the issue of the notification and the fourth respondent-company was informed not to deal with those shares in any manner including transfer, pledge, issue of duplicate etc. and all corporate benefits admissible on these shares may be held in abeyance till the orders passed by the learned Special Judge. 5. In view of the above stated circumstances, the first respondent requested the fourth respondent-company to transfer the shares in the name of the buyer who purchased the same in the open market. The fourth respondent-company vide their letter dated 8th October, 1997 informed the first respondent that one Mr. Mahendra Pal Tyagi - appellant herein was holding the said 200 shares under Ledger Folio No. 128027 bearing Share Certificate Nos. 58193, 46706, 179855 which he claimed hav....
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....ned order dated 10-10-2003, the learned Special Judge allowed Misc. Application 186 of 2000 filed by the first respondent. It was directed :- "This application relates to 250 shares of respondent No. 3 company. It appears that the respondent No. 4 who was holding these shares had sold the shares on the Stock Exchange which were purchased by the notified party. Taking advantage of the fact that the notified party because of the notification could not apply for transfer of the shares, the respondent No. 4 applied for duplicate shares by making a misrepresentation that he has lost the shares and received from the Company the duplicate shares. Those duplicate shares were again sold and they were now purchased by the applicant. The principal prayer in the application is for lifting of attachment on these 250 shares. It is obvious that these 250 duplicate shares have been issued by the Company because of misrepresentation made by the respondent No. 4. By an order dated 16-7-2003, the respondent No. 4 was directed to deposit in this Court an amount of Rs. 6,00,000. The respondent No. 4 has not obeyed this order. In the affidavit filed by the respondent No. 4. the explanation that has b....
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....ence, the appellant has assailed the above-said three orders before this Court in these appeals preferred under section 10 of the Act. 10. During the pendency of the appeals in this Court, the legal representatives of late Harshad Mehta are substituted as respondent Nos. 3(i), (ii ) and (iii). 11. Mr. Abhishek Vikas Singh, learned counsel appearing on behalf of the appellant, in assailing the orders of the learned Special Judge, inter alia, contended that the learned Special Judge did not appreciate the fact that the original shares were not valid and legal and had come to the hands of the notified person (deceased Harshad Mehta) in illegal and wrongful manner and were never transferred and registered in his name in accordance with law and as such, the appellant could not have been penalized for the acts and deeds of a third person, who had acquired the shares in illegal and clandestine manner. He submitted that the action of the appellant being bona fide and reasonable, he had faced loss at last stage, even when the duplicate shares were already stood transferred in his name in due course after following all legal procedures and due application of law. The learned counsel th....
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....hares. Late Harshad S. Mehta, who was a party - third respondent herein, is represented through his legal representatives Nos. 3(i), (ii) and (iii ) respectively. Indisputably, deceased Harshad Mehta was a notified person under sub-section (2) of section 3 of the Act and the appellant transacted the said shares with the deceased Harshad S. Mehta entered after the first day of April, 1991 and on or before 1-6-1992, the stipulated period covered under the Act. Claim submitted by the first respondent before the learned Special Judge would arise out of the transaction of the said 250 shares between late Harshad S. Mehta and the appellant during the aforesaid period. The entire properties belonging to the notified party on the day of notification would stand attached in terms of section 3(2) of the Act. The appellant knowing fully well that he has already sold the shares to late Hashad S. Mehta, he made a false representation to the fourth respondent-company that as the appellant had lost original shares, therefore, duplicate shares were allotted to him which stood in his name since late Harshad S. Mehta had not applied for change of the name. The whole exercise was done by the appellan....