2010 (12) TMI 1359

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.... for declaration declaring the plaintiffs to be the owners of the shares, details of which are given hereunder be passed in favour of the plaintiffs and against the defendants:- Distinctive Nos Record No.  Certificate No. No. of Shares --- 930251955 09195779 50 --- 930252005 09195779 50 133452933  ----- 06307612 50 --- 907158829 08070715 50 (b) A decree for cancellation of the Transfer Deeds bearing No. 4994198, 4994199, 4994201 and 4994203 be passed in favour of the plaintiff and against the defendants and direction be issued to defendant No.3 to deliver the original share scripts detailed in para No.1 above to defendant No.2 who in turn be directed to transfer the said shares in favour of the plaintiffs and deliver the same to the plaintiffs; (c) a decree for permanent injunction be passed in favour of the plaintiffs and against the defendants restraining the defendants No.1 and 2 to transfer the said shares in favour of any one else and against the defendant No.3, his servants and agents from transferring, alienating, encumbering or parting with possession of shares bearing Nos. the details o....

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....Company Court U/s 155 of the Act is discretionary and of summary nature, and if the title to the holding of the shares is challenged, then the Company Court will not inquire into such a dispute under Section 155 of the Act and for such an inquiry, a civil suit is the proper forum. 7. Further regarding the aspect that the Mumbai Courts have jurisdiction to entertain the issue as the registered office of the respondents is located in Mumbai, appellants contend that the respondents have their corporate office in Delhi and the share certificates were sent from Delhi and were delivered back to Delhi, as such a part of cause of action arose in Delhi and hence this court has jurisdiction to try the suit. 8. On the pleadings of the parties the Addl. District Judge to whom the suit was marked for trial framed following issues:- 1. Whether this court has got no territorial jurisdiction to entertain the present suit for the reasons stated in paras 2 and 3 of the written statement (Preliminary Objections)? 2. Whether the defendants No 1 and 2 did not receive the share certificates and the transfer deeds from the plaintiff as alleged in paras 6 (i) to (iii) of the writte....

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.... by respondent. No written synopsis has been filed by the appellant It may be observed here that Section 155 of the Companies Act has come into being after the amendment of Section 111 of the Companies Act w.e.f. 31.05.1991. According to the aforesaid provision the Company Law Board performs the functions that were here-to-before performed by the Court of Civil Judicature under Section 155. As per the aforesaid provisions of Company Law Board "It is empowered to make orders directing rectification of the Company's register as to damages, costs and incidental and consequential orders. It may decide any question relating to the title of any person who is a party before it to have his name entered upon the Company's register; and any question which it is necessary or expedient to decide, it may make interim orders. Failure to comply with any order visits the company with a fine. In regard to all these matters it has exclusive jurisdiction (except under the provisions of the Special Court Act). Its orders are appealable. The CLB, further, is a permanent body constituted under a statute. The CLB performs functions which are administrative, as under Sections 224 and 269, and curial, as u....

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.... person who is a party to the application to have his name entered in or omitted from the register whether the question arises between members or alleged members, or between members or alleged members on the one hand and the company on the other hand; and (b) generally, may decide any question which it is necessary or expedient to decide in connection with the application for rectification. (4) From any order passed by the Court on the application, or on any issue raised therein and tried separately an appeal shall lie on the grounds mentioned in section 100 of the Code of Civil Procedure, 1908 (5 of 1908)- (a) if the order be passed by a District Court, to the High Court; (b) if the order be passed by a single Judge of a High Court consisting of three or more Judges, to a Bench of that High Court. (5) The provisions of sub-sections (1) to (4) shall apply in relation to the rectification of the register of debentures holders as they apply in relation to the rectification of the register of members." 13. Interpreting the aforesaid provisions, the Apex court, in the case of Ammonia Supplies Corporation (P) Ltd. Vs Modern Plastic Contain....

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.... the Companies Act as also the judgment delivered by the Apex Court in the Case of Pandian Graphities (India) Ltd. Vs Louvumi Lakshmi and another, Canara Bank Vs. Nuclear Power Corporation of India Ltd. & Ors (supra) and has held that as opined by the Hon'ble Supreme Court in Canara Bank's case the word 'Court' must be read in the context in which it has been used in the Statute. And it has been observed that the 'Court' means CLB hereinafter which now exercises the powers that were exercisable by the Court u/s 155. It is entitled to direct rectification of register and the payment of damages by the company. It is entitled to decide any question relating to the title of any person who is a party to the application to have his name entered in or omitted from the register and to decide any question which it considers necessary or expedient in this connection. 15. The Court has also taken note of the judgments delivered by the Hon'ble Supreme Court in Ammonia Supplies Corporation (P) Ltd. Vs. Modern Plastic Containers Pvt. Ltd. AIR 1998 Supreme Court 3153 where also it has been held that the Court referred to under S.155 read with S.2 (11) and S.10 of the Companies Act, it is the c....