TaxTMI 
TaxTMI 
2020 (1) TMI 810
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....ccordance with terms of Letter of Administration issued by District judge vide order dated 31.01.2012 and 25.04.2012. 2. The brief facts of the case are that (i) Late Shri Devki Nandan Kaura father of the Respondents held 150 equity shares of Rs. 10/- each of the Appellant No. 1 company vide Certificate No. 6340, 6341, 6342. The said 150 Equity shares of Rs. 10/- each were subsequently converted into 6000 Equity Shares of Rs. 2 each after giving effect of split and bonus issue. Shri Devki Nandan Kaura had expired on 27.08.1987. (ii) On 29.12.2005 Appellant No. 1 came out with the Rights issue opened during the period commencing from 29.12.2005 and was valid up to 18.1.2006. The offer was available to all existing shareholders as on 18.11.2005. Subsequently Appellant No. 1 intended to take out Public Issue and as such filed its Red Herring Prospectus with ROC as well as SEBI in relation to the initial public offer and as a result thereof its share capital stood frozen and it could not make further allotment of shares in view of SEBI (DIP) Guidelines and the provision of Companies Act, 1956. Appellant No. 1 decided to give another opportunity to those shareholder....
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.... condonation of 328 days of delay, after the expiry of 60 days from the date of alleged refusal to transfer the shares, in filing the present petition. It is stated by the Appellant that the NCLT does not have jurisdiction to entertain and try the petition under section 58 (4) of the Act. (vi) Appellant further submitted that to invoke section 58(4) of the Companies Act, 2013, there should have been an actual transfer of shares from transferor/deceased/predecessor in interest to the transferor/legal hires and there should have been an involvement of the company in rejecting to recording of the transfer. The Tribunal did not decide the issue of maintainability by rendering any finding on the same, though the same issue was pressed by filling a separate application was directed to be decided along with the main petition. 3. Respondent filed their reply and rebutted in brief as under:- (a) Late Mr Devki Nandan Kaura was admittedly a shareholder of Appellant No. 1 as on record date, i.e. 18.11.2005. He or his legal heirs was entitled to 60,000 shares on account of holding 150 shares. 150 shares become equivalent to 6,000 shares and 60,000 shares were the entitlemen....
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....r dated 19.11.2007 along with the Transfer Deed and Affidavit-Cum-Indemnity Bond, then appellant happily accepted the same, never stated that the entitlement was not heritable rather stated that the decision for transfer will be taken after Court order but never whispered that the shares proposed to be transferred in favour of respondent No. 1 are not heritable. It was further stated that appellant used the Affidavit-cum Indemnity Bond for submitting to various authorities as per Red Herring Prospectus to show that there are no grievances of shareholder but after five years denied the transfer of shares to Respondent No. 1 and did not comply with the Undertaking given in the Red Herring Prospectus. The rejection of transfer of 60,000 shares and non-transmission of 6,000 shares in favour of Respondents by the appellant is totally arbitrary, malicious and illegal. 4. After hearing the parties the NCLT, Chandigarh passed the order. The relevant portion of the order is as under: - "37 In view of above discussion, we hold that the respondent No. 1 company without sufficient cause refused to register the transfer of shares consequent to the arrangement between the respondent ....
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....of shares with new shares certificates. The Respondent argued that they again intimated the Respondent vide their letter dated 1.6.2007 (Page 94) regarding allotment of shares 66000 shares which he became aware from publication in the newspaper dated 14.5.2007 and expressed that he is ready and willing to abide by all requirement. Learned counsel for the Respondent further argued that the appellant company vide its letter dated 6.8.2007 (Page 95) directed the Respondent (being legal heir of Mr. Devki Nandan Kaura) to submit the necessary order from the court and also execute an Affidavit cum Indemnity Bond on stamp paper of Rs. 100/- duly signed and notarized and also Demand Draft for Rs. 120000/- favouring M/s Haryana Electrical Udyog Pvt Ltd. Learned counsel for the Respondent further argued that they vide their letter dated 19.11.2007 (Page 98) intimated the appellant company that when the appellant company vide its letter dated 9.11.1987 (Page 97) has accepted the Will of late MR. Devki Nandan Kaura and now asking for court order is uncalled for and unsustainable in law. Learned counsel for the Respondent further argued that they also intimated the company that they have applie....
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....dent argued that Hon'ble District Judge granted letter of administration vide letter dated 31.1.2012 to the Respondent and the letter of administration under Section 290 of the Indian Succession Act were granted vide decree dated 25.04.2012 in favour of Respondent as per Will dated 20.08.1980 and requested vide letter dated 1.6.2012 to the appellant for transfer of shares as per Respondent's entitlement and Respondents are ready to pay the transfer consideration upon confirmation by the Appellant. Learned counsel for the Respondent argued that the appellant for the first time vide letter dated 17.9.2012 stated that neither the Respondent No.1 nor Respondent No.2 both being sons and legal heir of deceased shareholder can claim 60000 shares in lieu of convertible debentures issued on right basis with respect to 150 shares held by deceased shareholder on the ground that convertible debentures on rights basis are not heritable. Learned counsel for the Respondent further argued that the appellant vide letter dated 17.9.2012 (Page 128-129) further directed to furnish an indemnity bond indemnifying the company against any legal action by Respondent No.2. Learned counsel for the Re....