TaxTMI 
TaxTMI 
2018 (2) TMI 414
X X X X Extracts X X X X
X X X X Extracts X X X X
....to his mother on 04.09.1989 and due to a family partition the said share was transferred to the petitioner on 29.11.1989. Thus the petitioner became the shareholder of the company. * Since the share certificate was mutilated, the petitioner had applied for a duplicate share certificate and a duplicate share certificate dated 07.12.1991 was issued to him by the Company. During the year 2001, the petitioner had lost the duplicate share certificate and on his application a fresh duplicate share certificate was issued to him on 26.07.2001. * The company is used to issue notice for the Annual General Meeting (AGM) and the petitioner used to attend such meetings. On 17.09.2003, an AGM was held, but, no notice was issued by the Company to the petitioner. When the same was enquired by the petitioner, the Company had informed him that the A class share has been transferred to R3. Since, the petitioner has not transferred his share, immediately he has filed police complaint against R3, however, the police did not take any action saying that the case is of a civil nature. * Subsequently, the petitioner filed a suit in OS No. 585/2003 on 26.09.2003 before the Court of the Principal Distr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....uplicate share certificate and the same was issued on 07.12.1991 (Duplicate share Certificate No. 80) and again he has applied for another duplicate share certificate and the same was issued to him on 26.07.2001 (duplicate share certificate No. 95). Thus the petitioner came to be in possession with two duplicate certificates for the same set of shares. * The petitioner transferred his shares to the R3 on the basis of the 1st Duplicate Share Certificate (Certificate No. 80) for valuable consideration. Since there were two duplicate certificates, the Company insisted for a written request from the Petitioner and the petitioner addressed a letter dated 06.09.2003 to the Company wherein he stated that he had sold the shares to R3 and he has no objection to transfer the same to R3. The petitioner signed the transfer deed on 06.09.2003 in which his signature is attested by a Notary Public. Based on the said document the R1 and R2 transferred the A class share to the R3 in the board meeting held on 17.09.2003. * Subsequently petitioner filed a complaint before Police Authorities against R3 and the Notary Public and also filed a suit in OS No. 585 of 2003 before District Munsiff Court,....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s close relative of the R3 has been purposefully made a party to the transaction. The learned Counsel for the petitioner relied on the following judgment in support of his submissions: * Shoe Specialities Ltd. v. Tracstar Investment Ltd. [1996] 10 SCL 121 (Mad.) to show that it is the discretion of the Court to refer the matter to the Civil Court or not. 5. The R1 and R2 filed sur-rejoinder and inter alia made the following averments; * The petitioner has made contrary statement with regard to obtaining duplicate share certificate in the Police Complaint and in the plaint in OS No. 585 of 2003. There was no stay in the Suit No. OS 585 of 2003 and it was dismissed for default on 03.08.2006. Thereafter the R3 has sold the said shares to one Mrs. S. M. Vijila and in the cross-examination in the Civil Suit the petitioner admitted that he came to know that the shares were transferred to Mrs. S. M. Vijila. The learned Counsel for the Rl and R2 while making the above submissions prayed for the dismissal of the petition. 6. The R3 has filed a memo dated 25th October, 2017 adopting the written arguments of the Rl and R2. 7. Heard both sides and perused the pleading and documents. 8....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ificate is cancelled, even if the certificate is presented to the Company for transfer, the transfer will not be entertained. This being the situation, the Company ought to have rejected outright the share transfer deed submitted along with the duplicate share certificate issued on 07.12.1991, but insisted for the NOC from the petitioner which lacks bona fide. It is also on record that the R1 and R2 have stated that the OS No. 585 of 2003 was dismissed for default on 03.08.2006 and in these circumstances the R3 has transferred the impugned shares to one Mrs. S.M. Vijila. The Company knowing fully well that the original transfer of shares made to R3 itself is under dispute, ought to have played a neutral roll, whereas it has further transferred the shares to the said S.M. Vijila on 20.09.2006 in a shorter period, immediately in the next month. The Company also failed to file the share transfer deed signed by R3 transferring the shares in favour of Mrs. S.M. Vijila. It is also the contention of the R1 and R2 that the Company is a non-profitable organization and the shareholders are not entitled to any dividend or interest on the shares. According to the petitioner, it is privilege of....