TMI Blog1999 (3) TMI 481X X X X Extracts X X X X X X X X Extracts X X X X ..... The defects may be listed as under: ( i )in respect of Uttamchandani, the objections were that no Reserve Bank of India permission had been forwarded and secondly that there was a difference in the specimen signature of the transferor and the signature on the transfer form. ( ii )insofar as Shri Suryakant A. Patel and Smt. Jyotsnaben S. Patel, the objection is that the name of the witnesses were not disclosed in the transfer document and ( iii )insofar as the Jains, Patkars and Shahs are concerned, the objections were two fold. Firstly, there were orders by the Enforcement Direc-torate who had investigated matter under FERA that the transfer should not be effected and ( b ) there was difference in specimen signatures and the signatures on the transfer forms. From the correspondence on record and the material available, the objections can now be dealt with. 2. Insofar as Uttamchandani are concerned, the argument was that there was no permission of the RBI permission. It is contended on behalf of the company that they wrote to the petitioners on 23-12-1991 that the RBI permission had not been forwarded. On the contrary, it is the case of the petitioners that these debent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion would be to 20,000 debentures standing in the name of Shahs against whom there is an objection that their signature differ. The other objection is in respect of the order of the Enforcement Directorate. The Enforcement Directorate has filed the affidavit dated 25-2-1999 of Shri S.L.J. Gallyot, Assistant Director of Enforcement Directorate, Foreign Exchange Regulation Act, 1947. The said objection also can be dealt with by protecting the interest of the Enforcement Directorate in the event any adverse order is passed in respect of the said 92,000 debentures. 5. The petition had come up for hearing at the request of the petitioners as it was the contention of the petitioners that they had floated a mutual fund which is due to be redeemed on 13-3-1999. 6. It may also be clarified at this stage that section 155 of the Companies Act, 1956 ('the Act') has since been omitted. However, there has been amendment to section 111 of the Act and by virtue of sub-section (4) of section 111, section 155 has been bodily incorporated as sub-section (4) of section 111. Earlier an objection had been taken that there was no rejection or refusal to register as contemplated by section 155. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... kars are concerned except the objections raised by the Enforcement Director- ate that the acquisition of the debentures was in contravention of the provisions of FERA. There are no other objections. These debentures total to 72,000 being 36,000 each. There cannot be any objection for rectifica-tion except to protect the interest of the Enforcement Directorate. Insofar as the 20,000 debentures stand in the name of Shahs they were returned on the ground that there was a dispute regarding signature. Petitioners will have to be relegated to a suit and suitable directions can be made insofar as the redemption value of the debentures and accrued interest thereon are concerned. 8. Insofar as the objection by the Enforcement Directorate are concerned from the correspondence it emerges that the original transfer documents were seized by the Enforcement Directorate. However, on behalf of the Enforcement Directorate it is pointed out that from the correspondence it is apparent that the documents were given to the petitioners. Letter dated 9-4-1992 by the company to the petitioners show that only photostat copy of the original transfer deed were sent to the company alongwith the debenture ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation. In terms of the debenture deed, clause 9 provides that debentures shall be transferable and transmissible in the same manner and to the extent and subject to the same restriction and limitation as in the case of the shares of the company. What this means is that the same procedure for transfer-ring of shares of the company will also be applicable in respect of transfer of debentures. In terms of section 205A read with sections 206 and 207 of the Act dividend insofar as shares is concerned, has to be paid as set out therein. Parties are agreed that the same procedure will also be applicable insofar as the interest on debentures are concerned. Section 205A con-templates that if the dividend has not been paid within the time set out the company has to transfer unpaid dividend to a special account. Under section 206 the dividend has to be paid only to registered holder of such shares or to his order or to his banker. Similarly, under section 207, if the company fails to pay the dividend the Director and others set out therein are liable for prosecution and imprisonment. Section 108 contemplates that no debenture shall be registered unless accompanied in a manner set out therei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jected the transfer application and/or disclosed the reason for the rejection. The respondent No. 1 in respect of 16,000 and 20,000 debentures which were held in objection, has paid dividend to registered holders and in respect of the balance 92,000 debentures has deposited the same with the Enforcement Directorate pursuant to direction issued by the Enforcement Directorate. Therefore, the only question is in respect of interest on the 16,000 and 20,000 debentures. Out of these 16,000 debentures were purchased from a group known as Uttamchandani. In respect of the debentures held by Uttamchandani no relief for registration can be granted in favour of the petitioners. The petitioners, therefore, at the highest while suing Uttamchandani also can sue them for the interest which they have received. That leaves 20,000 debentures standing in the same of Suryakant A. Patel and Smt. Jyotsnaben S. Patel. Here also in respect of the 3rd, 4th and 5th instalments, the interest has been deposited with the Enforcement Directorate. Therefore, direction can be issued to the Enforcement Directorate to pay the said interest on the said 20,000 debentures to the petitioners subject to the terms and co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hs relief rejected. Petitioners are directed to file a suit and seek appropriate declara- tion. In the meantime the redemption amount to be deposited in this Court within eight weeks from today alongwith unpaid interest, if any, company to inform the petitioners of such deposit. Petitioners to file a suit thereafter within eight weeks from such communica- tion. The Enforcement Directorate to deposit the interest received by them for the 20,000 shares standing in the name of the Shah's in this Court within twelve weeks from today. The amount deposited to be transferred to the said suit account. Liberty to the petitioners to apply for directions in the said suit. The civil court to pass orders after hearing Enforcement Directorate and securing the Directorate in respect of the debentures standing in the name of the Shah's. ( d )Payment of interest on the debentures held by Mr. Uttamchandani, the prayer for interest is rejected. Liberty to the petitioners to claim the interest received by Mr. Uttamchandani in the suit that they may file against Uttamchandani, if so advised. ( e )In respect of the interest paid to Suryakant A. Patel and Smt. Jyotsnaben S. Patel by respondent No. 1, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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