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2016 (6) TMI 1061 - HC - Companies LawRectification in the register of members - transfer of shares - Held that:- Determination by the CLB of the illegality of the transfer itself under Section 111 read with Section 108 of the Act, it is pertinent to note that there are two transfers in the present case one, from the four joint holders, namely, Dr. Kalyani, Sulochana, DGK and SNI, to Dr. Kalyani as a sole holder and two, from Dr. Kalyani to Gaurishankar. These transfers were admittedly accomplished on different dates. The share certificate placed on record shows in the memorandum of transfers overleaf that the first transfer in favour of Dr. Kalyani was effected on 17 September 2007, whilst the second transfer from Dr. Kalyani to Gaurishankar was effected on 22 November 2007. There is no explanation, however, on record as to how the names of Sulochana and DGK were replaced by the names of Rohini and Gaurishankar as 'holders' of the shares on the face of the share certificate. No such transfer is recorded in the memorandum of transfers overleaf. There is no share transfer form for transfer of shares between the original holders to the new four joint holders (said to be the cotrustees of the trust after the purported resignations of Sulochana and DGK and cooption of Rohini and Gaurishankar in their place), as required by Section 108 of the Act. Apart from this glaring lapse, the CLB has also noted the following admitted position for holding the transfers to be in contravention of Section 108 : (i) There is no instrument of transfer as required by Section 108 produced on record by the answering Respondents; (ii) The answering Respondents did not produce the register of members of the company to controvert the Petitioner's case that the transfers did not actually take place; (iii) No minutes of the Board of Directors or of any transfer were placed on record in respect of the impugned transfers; (iv) The purported annual returns filed with the Registrar of Companies did not relate to the transfers claimed to have been executed; Based on these facts and applying the law laid down by the Supreme Court in the case of Mannalal Khetan Vs. Kedar Nath Khetan [1976 (11) TMI 135 - SUPREME COURT OF INDIA ] holding that execution of valid transfer deeds within the meaning of Section 108 is a mandatory requirement of a valid transfer of shares, the CLB held the impugned transfers to be invalid and not in compliance with the provisions of Section 108. There is no error of law to be found in this analysis and the finding arrived at by the CLB on the basis thereof.
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