TMI Blog2002 (7) TMI 567X X X X Extracts X X X X X X X X Extracts X X X X ..... of 9.76 lakh shares belonging to petitioner in favour of the respondents 4 to 8 as illegal, untenable and void for being violative of Regulation 10 of SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 and consequently direct for the restoration of the shares to the petitioner s family." The writ petition was contested by the respondents 4 to 8 and also by the respondents 1 and 2. It was argued on behalf of the respondents 3 to 8 that the petitioner did not make any representation or moved any proceedings before the respondents 1 and 2 complaining about the so called violations. On the other hand, the respondents 1 and 2 on their own accord have taken all possible measures to verify as to whether the transfer of shares is in accordance with the provisions of the Regulations and on being satisfied with the explanation submitted by respondents 3 to 8, respondents 1 and 2 did not proceed further. The very same argument was reiterated by Sri P.V.S.S.S. Rama Rao, the learned counsel appearing on behalf of the respondents 1 and 2 before us. He would submit that the issuance of a writ of mandamus would arise only if the statutory authorities have failed to discharg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eeds to be taken into account. The learned Judge held that the appellant writ petitioner has not made out any case for grant of relief claimed in the writ petition and accordingly dismissed the writ petition. 4. Being aggrieved with the order of the learned single Judge, the writ petitioner preferred the present writ appeal reiterating the grounds raised in the writ petition. Sri Jagan Mohan, the learned counsel for the appellant would submit that the learned Single Judge failed to notice that the transfer of shares, viz., 9,76,000 shares amounting to 22 per cent under Memorandum of Understanding dated 27-9-1996 are untenable and unsustainable in view of the provisions of regulation 4 of 1994 Regulations and regulation 3 and the proviso whereunder a mandatory declaration of intention to acquire as contemplated under regulations 6, 7, 8 and 9 becomes condition precedent. The learned counsel contends that this aspect was misconceived by the learned Single Judge and thereby the judgment rendered becomes untenable in the facts and circumstances of the case. He has reiterated the other grounds raised in the writ petition at the time of hearing. Per contra, the learned counsel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on has been drawn to the averments/submissions made in the counter- affidavit which are not disputed by filing a reply affidavit. The admitted facts are as under : The petitioner belongs to a group known as Katta group and the respondents 4 to 8 belong to Haridas group . They jointly promoted several companies and the third respondent is one such company. The third respondent went in for a public issue in the year 1994. In or around 1996, certain differences arose between the petitioner s group and the respondents group. It is not in dispute that the respondents group held majority shares in the company and, therefore, the petitioner could not disturb the respondents by way of any democratic process known to Company Law. Therefore, it is submitted that the petitioner resorted to some extraneous methods and the petitioner group proposed certain terms of settlement between the petitioner s group and the respondents group. The terms were finalized and the terms related to the transfer of business interest in the respondents group companies and the partnership firms and a consolidated consideration was arrived at. The respondents agreed to pay more than what the petitioner s g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct that there was no provision for payment of compound interest, agreed to receive simple interest but once again rewrote the entire accounts and adjusted all payments made on account of principal towards interest. The said adjustment was contrary to the terms of the agreement and also contrary to the payments made and receipts already issued by the petitioner s group. 10. At the time of hearing, it was submitted that the respondents have paid a sum of Rs. 5.17 crores to the petitioner s group till December, 1999 towards the purchase of shares in group companies. In view of the illegal demands made by the petitioner s group, the respondents could not make further payments. The petitioner instigated one of the relatives to approach SEBI and filed a complaint that the transfer of shares was in violation of the Takeover Regulations. The petitioner s group filed C.P. No. 78 of 2000 before the CLB, New Delhi regarding the affairs of the third respondent-company and the gravamen of charge was the transfer of shares. The petitioner s group had also filed two more company petitions before the CLB in respect of the group companies. The petitioner failed to obtain any interim order befor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e registers of members and specific jurisdiction is vested with the CLB. "111A. Rectification of register on transfer (1) In this section, unless the context otherwise requires, company means a company other than a company referred to in sub-section (14) of section 111 of this Act. (2) Subject to the provisions of this section, the shares of debentures and any interest therein of a company shall be freely transferable : Provided that if a company without sufficient cause refuses to register transfer of shares within two months from the date on which the instrument of transfer or the intimation of transfer, as the case may be, is delivered to the company, the transferee may appeal to the Company Law Board and it shall direct such company to register the transfer of shares. (3) The Company Law Board may, on an application made by a depository, company, participant or investor or the Securities and Exchange Board of India, if the transfer of shares or debentures is in contravention of any of the provisions of the Securities and Exchange Board of India Act, 1992 (15 of 1992) or regulations made thereunder or the Sick Industrial Companies (Special Provisions) Act, 1985 (1 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the regulations and specially with regard to the transfer of shares beyond 10% under the 1994 regulations and thereafter 15%. 25. The learned single Judge missed the wood for trees, by accepting the oral submissions of respondents herein, and even on this ground alone the judgment of the learned single Judge is liable to be set aside. 32. The learned single Judge had gone carefully through section 111A of the Companies Act and specially sub-clause 3 of section 111A would have noticed that the matters mentioned therein are totally different from the complaint of the appellant herein and thus the learned single Judge opining that section 111A is available to the appellant petitioner is untenable, misconceived and is devoid of legal sanction. 46. The learned single Judge realized that he heard the applicant s counsel for 2 hours and therefore openly expressed the view that he should dispose of the writ petition itself and the appellant submits that this aspect has resulted in miscarriage of justice." 17. The learned counsel for the respondents submitted that the appellant s counsel has eminently put motives against the learned single Judge who disposed of the writ petition ..... X X X X Extracts X X X X X X X X Extracts X X X X
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