TaxTMI 
TaxTMI 
2018 (1) TMI 922
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....o. SB25412954) Certificate No. 1634923 Dist. No. 333094801 To 333094850 and; (ii) 50 Shares from Urvi B. Shah Share Certificate No. 1643232 (Folio No. SB 2549950) Dist. Nos. 333510251 to 333510300 and; (iii) 50 Shares from Mr. Jolly Champaklal Shah, Share certificate No. 871509 (Folio No. SB 1797766) Distt. Nos. 294924101 to 294924150 and; (iv) 50 Shares from Mr. Kamlesh Bhuderji Thakker, Certificate No. 386109 (Folio No. SB 1329225, Distt. Nos. 270654101 to 270654150." 3. The above listed shares of State Bank of India totalling 200 in number, claimed to have been purchased through Ahmedabad Stock Exchange. The Petitioner had made an attempt to get some shares transferred in his name, however, due to mismatch of signatures the Bank had refused to transfer those shares and put "Stop mark". We shall discuss the merits and facts of the case but before that a legal question has been raised that this Petition is not maintainable against the State Bank of India being not incorporated as a Company under the provisions of the Companies Act. This legal question is to be answered first, because of the reason that the Respondent No. l i.e. State Bank of India, ha....
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....r persons as may from time to time become shareholders in the State Bank in accordance with the provisions of this Act, shall, so long as they are shareholders in the State Bank, constitute body corporate with perpetual succession and a common seal under the name of the State Bank of India, and shall sue and be sued in the name." d. Therefore, the argument is that as per Sub-section 2 (supra) State Bank can sue and can be sued only in respect of persons as specified therein. Since the Petitioner is not within the ambits of the said provisions hence not entitled to raise any cause of action against the Bank. e. Under this Act (SBI Act) vide Chapter IV Section 10, provisions are in respect of 'Transfer of Shares', Section 13 is for 'Register of shareholders'. Further vide 'The State Bank of India General Regulations, 1955' in Chapter II under Rule 15 is 'Transfer of Shares' and under Rule 16 is for "Power to Refuse or Suspend Transfers" and Rule 19 is for "Transmission of Shares in the event of death, insolvency etc. of a Shareholder." It is thus argued that the SBI Act is a complete Code in itself hence not to be guided by any other Act. The SBI Act has prescribed ....
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....cedure for transfer of shares, refusal of transfer, registration of shareholder, etc. are not in variance with each other. Therefore, the Companies Act can apply on those issues which can be dealt without creating distinction between the provisions of two Acts. c. The next argument is that the erstwhile CLB had taken divergent views about the applicability of provisions of Companies Act on SBI. In one such Order, CLB, Western Region, Mumbai, in the case of Natali Dashrathbhai Patel v. State Bank of India (Company Petition No. 13/111A/CLB/WR/2005), Order dated 14.06.2006 (also authored by that very respected Ld. Member Mr. CD. Paik) has directed the SBI to issue duplicate shares in the name of the Petitioner, although the question of jurisdiction to rectify the Register of Members by SBI was raised. "2. ** ** ** The Petitioner purchased 200 shares from her family members and sent the share certificates and share transfer deed to SBI for transfer on 14.7.2001. M/s. MCS Limited (Respondent No. 2), the transfer agent of SBI informed the petitione....
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.... not entitle for the impugned shares. The SBI is directed to cancel the 150 shares in the name of the petitioner. The SBI is further directed to transfer the balance 50 shares which are under objection in the name of the petitioner within 30 days from the date of receipt of this order. The SBI is directed to pay dividend, if any, declared on the said shares to the petitioner. The Petition is accordingly disposed of and no order to cost." 6. FINDINGS ON THE QUESTION OF 'MAINTAINABILITY':- Our view is summarized as per the following points:- a. On examination of the language of Sub-section (c) of section 1(4) of the Companies Act, 2013, it is prescribed that the provisions of Companies Act, 2013 shall apply to Banking Companies, except insofar as the said provisions are inconsistent with the provisions of the Banking Regulation Act, 1949. There is no limitation under the Companies Act, 2013 in dealing with the shares of State Bank of India. For all intents and purposes, the provisions of SBI are akin to the provisions of Companies Act, particularly when the procedure for listing of shares, allotment of shares, issuance of shares, transfer of shares and other such proce....
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....available. Obviously, there is no remedy available against the decision of refusal by the Executive Committee of SBI. According to us, Because of the fundamental reason that an appeal is prescribed under the Companies Act, 2013, hence in the wisdom of Hon'ble Law makers there was no necessity to make identical provision of appeal in two Statutes. If in a Statute, the right of appeal is absent does not mean that the aggrieved person is remediless. Unquestionably, a shareholder is not remediless because he has been granted a right of appeal under section 58 of the Companies Act, 2013 against the refusal of registration by a Company, in the present it is SBI. In the present situation, the Petitioner had sought remedy by invoking the provisions of section 58 to be read with section 59 of the Companies Act, 2013, especially when there was no such remedy available to him under SBI Act, 1955. d. An important distinction has been brought to our notice. There are two connotations generally being used while a Statute is legislated or enacted. The terms are "constituted or established" and the other is "governed in accordance with". A Corporate Body may be brought into existence unde....
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....State Bank of India is established to carry on the business of Banking which is constituted by SBI Act of 1955, but to be governed under the Companies Act. e. Our finding on the issue of divergent view expressed vide orders of the CLB is that the order cited by the Petitioner as well as by the Respondent (SBI), both were passed by the same Learned Member of CLB viz. Mr. CD. Paik. In one case, as quoted by the Petitioner, the SBI was directed to transfer the shares and to pay dividend to the claimant (Petitioner), however, as against that in another case, a divergent view was taken that the Petition against SBI was not maintainable. In a situation when there was no coherence in the said two judgments of CLB then this Bench deem it appropriate to take an independent view after examining exhaustively the facts as well as law, especially when the CLB is no more in existence. Vide section 466 of Companies Act, 2013 the Board of Company Law Administration constituted under the Companies Act, 1956 stood dissolved on the constitution of NCLT. As a result, this Bench is judicially authorised to take an independent view to resolve this legal controversy. f. This Bench has n....
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.... presently a Criminal case (Case No. 39/2007) against Jolly Champak Lai Shah (R-5) in Magistrate Court, Ahmedabad is pending. The Petitioner was not sleeping over his rights. By referring Section 14 of the "Limitation Act, 1963" it is argued that while computing the period of limitation the time during which another proceedings are pending are to be excluded. In the case of Rajkumar Shivhare v. Union of India 108 SCL 589 Hon'ble Bombay High Court (oral judgment per Hon'ble Dr. D.Y. Chandrachud, J.) held that the Statute has unequivocally spelt out its intent that although the period of limitation is prescribed but the Code is vested with the jurisdiction to exclude the period of litigation pending before any Court of Law. It is prescribed to afford protection to a vigilant Litigant. Naturally, this exception under the Limitation Act is to advance the Cause of Justice rather than to abort the legally permissible remedy. On that ground a Petition cannot be thrown out of litigation at the very inception. Moreover, and most importantly, when the claim was lodged before State Bank of India or the Civil/Criminal cases were filed, at that point of time, the Companies Act, 1956 was appl....
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....eror on Transfer Deed. The Petitioner had written a letter on 19-10-1996 to share broker Shri Chiubhai Shah intimating the mismatch of signatures with a request to remove the objection and return the Transfer Deeds. No reply was received from transferors or their Agent. Thereafter Petitioner had written a letter to Datamatic Consultants (R-2) an assignee of State Bank of India (R-l) requesting for "Stop Transfer". To put the facts straight, the State Bank of India's Representative has informed that Public Issue was floated by the Bank in the year 1994. At that time M/s. MCS Limited was appointed as Registrar and Transfer Agent to handle the Public Issue. Later on M/s. MCS Limited ceased to be the Registrar with effect from 30th September, 2003. In his place Respondent No. 2 M/s. Datamatics Financial Services was appointed as Registrar and Share Transfer Agent with effect from 1st October, 2003. 8.1 The Petitioner had also filed a civil suit (No. 1173/2007) in the Civil City Court, Ahmedabad for Share Certificate bearing No. 1634923 for 50 shares standing in the name of Rukmaniben Babulal, seeking injunction restraining Respondent No. l Bank from transferring the impugned shares.....
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....s etc. already made clear in this Judgment. Even in the reply filed by the Datamatics Financial Services (R-2) vide para 6 it is acknowledged that only 100 Share Certificates were lodged and put a Stop Mark and not for rest of the shares. Para 6 is reproduced below:- "6. With reference to para 8 of the petition, it is respectfully submitted that the Petitioner had lodged only two Certificates (i.e. 100 shares) - (i) share Certificate No. 1634923 bearing Distinctive Nos. 33094801 to 33094850 in the year 2002 and (ii) share Certificate No. 386109 bearing Distinctive Nos. 270654101 to 270654150 in the year 2011 for transfer in his name, but because the transferor's signature in the relevant transfer applications being different, the said certificates were returned under objections to the Petitioner. As such, the contentions of the Petitioner that the shares wrongly exist in name of Respondent Nos. 3 to 6 are denied. Further, it is respectfully submitted that since the Petitioner has submitted the transfer applications for only 100 shares out of 200 shares as stated in plaint, the provisions of Sections 58(4) and 59 of Companies Act, 2013 will not be applicable to balance 100 ....