TaxTMI 
TaxTMI 
2017 (7) TMI 225
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.... is situated at Symphony House, Bodakdev, Ahmedabad, Gujarat. The second respondent is the Share Transfer Agent of the first respondent company with effect from 1.4.2016. The third respondent was the Share Transfer Agent of the first respondent company from 1st March, 2010 to 31st March, 2016. The fourth respondent is the present Company Secretary of the first respondent company whereas the fifth respondent is the erstwhile Company Secretary of the first respondent company. 4. The petitioner was originally holding 1000 equity shares of Rs. 10/- each of the first respondent company. Later, the shares were sub-divided by dividing one equity share of Rs. 10/- each to 5 equity shares of Rs. 2/- each, as per the Board resolution dated 29.07.2011 and, thereby, the shareholding of the petitioner, as per the Register of Members of the first respondent company, as on 30th June, 2015, was 5000 equity shares. 5. According to the petitioner, the shares of the petitioner were misplaced. The petitioner, therefore, by his letter dated 12.05.2016, requested the second respondent for issuance of duplicate shares. The second respondent, by its letter dated 9.7.2016, asked the petitioner to produce....
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....icate share certificates. 6. The first respondent admitted that the third respondent was its Share Transfer Agent from 1.3.2010. It is the plea of the first respondent company that when the petitioner claims to have lost his shares or misplaced his shares, it was incumbent upon him to lodge a complaint with police, but the petitioner has not taken such steps. From the documents provided by the third respondent to the first respondent company, it appears that the petitioner has transacted his shares way back in the year 1998, whereby one Rajgopal BV has purchased the shares of the petitioner through a broker by name M/s Taneja State Company. Therefore, at that point of time, the first respondent company had every reason to believe that the petitioner would have signed a transfer form prevailing then. In December, 2015, Mr. Rajgopal BV presented the shares for transfer along with transfer form signed by the petitioner, which is of the year 1998. These facts were stated in the report of Ernst & Young, Auditors appointed by the first respondent company for conducting special audit of the transactions handled by the third respondent. At present, investigation is being carried on agains....
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.... stand cancelled. 7. In the rejoinder, the petitioner stated that the first respondent company never provided the address of Mr. Rajgopal BV. It is also stated in the rejoinder that the Register of Members is conclusive evidence as to the shareholding of a member of a company. In the rejoinder, the petitioner referred to the interim order passed by this Bench on 23.11.2016 freezing all transactions in respect of the shares in Folio No.024442 owned by the petitioner and all consequential benefits arising therefrom till the disposal of the petition. According to the petitioner, as on 30.6.2015, his name appears as Member of the Company and the interim order would come to his rescue. The Company Secretary, at that point of time, failed to mention in the Annual Report about the suspicious transfer of shares as on 31st December, 2015, 31st March, 2016 and 30th June, 2016. 8. This petition is filed under Sections 58 and 59 of the Companies Act, 2013 and Rule 70 of the National Company Law Tribunal Rules. But the relief sought in the petition relates to issuance of duplicate shares. Section 56 of the Companies Act, 2013, which came into force with effect from 1.4.2015, reads as under :-....
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....nbsp;(d) within a period of six months from the date of allotment in the case of any allotment of debenture: Provided that where the securities are dealt with in a depository, the company shall intimate the details of allotment of securities to depository immediately on allotment of such securities. (5) The transfer of any security or other interest of a deceased person in a company made by his legal representative shall, even if the legal representative shall, even if the legal representative is not a holder thereof, be valid as if he had been the holder at the time of the execution of the instrument of transfer. (6) Where any default is made in complying with the provisions of sub-sections (1) to (5), the company shall be punishable with fine which shall not be less than twenty-five thousand rupees but which may extend to five lakh rupees and every officer of the company who is in default shall be punishable with fine which shall not be less than ten thousand rupees but which may extend to one lakh rupees. (7) Without prejudice to any liability under the Depositories Act, 1996 (22 of 1996), where any depositor or depository participant, with an intention to defraud ....
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.... the filing of this petition seeking relief of duplicate shares, did not give report to police. Even after the petitioner came to know that his shares were transferred to Mr. Rajgopal BV, he did not choose to give any report to police. Therefore, the petitioner is not entitled to duplicate shares. 12. Now, coming to the reliefs claimed under Sections 58 and 59 of the Act, it is necessary to find out whether the petitioner is entitled to the relief under Section 59. Section 59 of the Act deals with the rectification of register of members, if the name of any person, without sufficient cause, entered into the register of members of a company or, without sufficient cause, omitted the name of a member from the register of members or in case where a default was made or unnecessary delay was made in making entry in the register of members. 13. It is contended by the learned counsel for the petitioner that transferring of his shares to the name of Mr. Rajgopal BV amounts to deleting or omitting the name of the petitioner from the register of members without sufficient cause. 14. The crucial question is whether the transfer of shares of the petitioner to Mr. Rajgopal BV amounts to trans....
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....nt of the learned counsel for the company that the transferee was not added as a party did not find favour with the Honourable High Court on the ground that the share of the petitioner had not been transferred to any person validly and, therefore, the petitioner was still the holder of the share. In that case, it was held that the share of the petitioner was not validly transferred on the basis of interpretation that forfeiting the shares of an expelled member was not valid. In the case on hand, the shares of the petitioner were transferred to Mr. Rajgopal BV on the basis of a share transfer form, which may be genuine or may not genuine. Therefore, the said decision is not applicable to the facts of the present case. 16. Learned counsel for the petitioner relied upon the decision in Mannalal Khetan v. Kedar Nath Khetan [1977] 47 Comp. Cas. 185 (SC). In that case, shares were transferred without proper instrument of transfer. In the case on hand, the shares were transferred on a proper instrument of transfer, but the question whether the petitioner, in fact, transferred the shares or not in the year 1998. Therefore, that decision is not applicable to the facts of this case. 17. I....
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....ection 10, it is the Company Court alone which has exclusive jurisdiction." In Para 31, the following observations are also made: "So whenever a question is raised Court has to adjudicate on the facts and circumstances of each case. If it truly is rectification all matter raised in that connection should be decided by the Court under section 155 and if it finds adjudication of any matter not falling under it, it may direct a party to get his right adjudicated by Civil Court." Thereafter, the Hon'ble Apex Court has observed as under: "We have already held above the jurisdiction of the Court under section 155, to the extent it has exclusive jurisdiction of Civil Court is impliedly barred. For what is not covered as aforesaid the Civil Court would have jurisdiction." Therefore, it is clear from the Judgment of the Hon'ble Apex Court in Ammonia Supplies Corporation Private Ltd. (supra) that, insofar as matters of rectification are concerned, it is the Company Court only has jurisdiction. If issues which have to be answered are not peripheral to rectification but issues regarding title, etc., then such other issues will have to be decided by the Civil Court. The Apex Court....