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2015 (5) TMI 523 - Board - Companies LawApplication under section 111A of the Companies Act, 1956 for register the shares - Shares pledge on account to avail bill re-discounting facility - Default in making payments in respect of the bills discounted - Shareholder signed the share transer forms in favour of the petitioner - Held that:- It is an admitted fact that the respondent company availed rediscounting facility of ₹ 75 lakhs from the petitioner and at the time of sanctioning the petitioner vide its letter dated 08.07.1996 made it clear that the directors shall pledge 12,00,00 shares of the R1 Company and 40,000 shares of IVR Constructions. Accordingly the respondents entered into an agreement with the petitioner on 09.09.1996 and in the terms of the agreement the pledge of 12,00,000 equity shares and 40,000 equity shares have been mentioned. The petitioner and the respondent had signed the agreement and there is no dispute. Further the promoter of the respondent company i.e. Shri Sundar Iyer entered an unattested agreement dated 09.09.1996 with the respondent company. The above unattested agreement is not in dispute. As per the above agreement the shareholder of the respondent company has categorically stated that as per the sanctioned letter the shareholder pledged the above shares in favour of the petitioner for effecting the transfer of said shares to pay the said loans or any other dues of petitioner. The shareholder also signed the share transfer forms in favour of the petitioner. Further as per clause 5 the petitioner can call upon the shareholder of the respondent company to execute the transfers in favour of the petitioner. Thus the shareholder of the respondent company is bound by the said agreement. Failing to repay the loan amounts to the petitioner by the respondent the petitioner requested the respondent to effect the transfer of shares pledged by the shareholder in favour of the petitioner in accordance with the terms and conditions of the unattested agreement entered by the shareholder. From the documents it is crystal clear that the petitioner has taken various steps to recover the loan however the respondent failed to repay the amount borrowed by the respondent. The petitioner has bonafidely exercised its right to claim transfer of pledged shares in favour of the petitioner. The stand of the respondent with regard to the one lime settlement and not to effect the transfer of shares is unwarranted and is not a ground to deny the right of the petitioner. Accordingly and in exercise of power conferred under section 111A of the Companies Act, 1956, I hereby direct the respondent company to register the shares in the name of the petitioner and return the share certificates with duly endorsement of transfer within a period of six weeks. Further the petitioner is entitled to the benefits accrued on the shares including the bonus shares, dividend etc. - Decided in favour of appellant.
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