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2019 (2) TMI 1117 - AT - Companies LawNCLT jurisdiction to entertain or try the disputes pertaining to transfer of equity shares - It is contended that, State Bank of India is not a Company registered under the provisions of Companies Act and it is a body corporate constituted and incorporated under SBI Act, 1955 which was enacted before the enactment of Companies Act, 1956 therefore, NCLT would have no jurisdiction to entertain or try the disputes pertaining to transfer of equity shares - HELD THAT:- Imperial Bank’ was taken over and named as State Bank of India and the Central Government together with other persons entitled to become shareholder of State Bank of India. It is not in dispute that the ‘Imperial Bank’ was a company under the erstwhile Companies Act and it continued to be company on take over as State Bank of India which is the reason that the Central Government become one of the shareholders. Later on the SBI also came out with an Initial Public Offer (IPO) and allotted its shares to various shareholders including individuals. As perused the Share Transfer Form submitted by the 1st respondent to 2nd appellant for transfer of shares. The said Share Transfer Form is prescribed under Section 108(1A) of the Companies Act, 1956. The said transfer from is being accepted by the 1st appellant. 1st appellant has not submitted any such form which have been prescribed by it for the purpose of transfer. 1st appellant is using the said form which have been prescribed under the Companies Act. As such the argument of the 1st appellant that the Companies Act is not applicable to them is not convincing. On the contrary State Bank of India being a body created by an Act of Parliament it has higher responsibility than the ordinary company to take care of its all stake holders. Thus State Bank of India is a company within the meaning of Companies Act for the purpose of transfer of securities. Therefore, NCLT has the jurisdiction to entertain or try the disputes pertaining to transfer of equity shares. Since we have held that the NCLT has the jurisdiction to entertain or try the disputes pertaining to transfer of equity shares, therefore, Section 430 of Companies Act, 2013 would be applicable. The civil suit filed by the 1st respondent is already withdrawn. When the 1st appellant filed the appeal before this Appellate Tribunal, 1st appellant have also made them parties respondent to the appeal. They have not come forward to agitate the Appeal inspite of service of Notice. It goes to prove that the transferor is not cooperating with the transferee or showing his inability to provide the information to the transferee. Therefore, it is established on the record that the 1st respondent was rightly contesting and claim that he is the rightful owner of these shares by filing Civil Suit and Company Petition before the appropriate Court/Tribunal. It is noted that the combined reading of Section 24 of Companies Act and Regulation 40 of SEBI will show that the principles and compliances to be made under the Companies Act or under the SEBI are complementary in nature and both provisions have to be complied with for a better outcome. The matter under consideration has been hanging over for the last several years. NCLT vide Impugned Order partly disallowed the claim of Respondent No.1, original petitioner, and he has not filed appeal. Appeal needs to be disposed giving directions regarding compliance on the lines of SEBI Circular. In view of the aforegoing observations and discussions the following directions are issued: i) Impugned Order is maintained. However, the shares may be transferred subject to compliance with SEBI Circular No. No.SEBI/HO/ MIRSD/DOS3/CIR/P/2018/139 dated 6th November, 2018. ii) Appellants and Respondent to take prompt action by following the prescribed procedure under the circular noted above. iii) The expenses, if any, incurred by the appellants in following the above procedure will be borne by the 1st respondent.
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