TMI Blog2000 (2) TMI 828X X X X Extracts X X X X X X X X Extracts X X X X ..... t in the petition and as reiterated by Shri Anil K. Agarwal, practising company secretary, is that the petitioner was one of the promoter directors of respondent No. 1 holding 1,52,410 equity shares. In June, 1997, all the said shares have been got fraudulently and collusively transferred in the name of respondents Nos. 7 and 8 and their names were recorded, behind the back of the petitioner without his knowledge. The said transfers were illegal and contrary to the provisions of Section 108 of the Act inasmuch as the petitioner continues in possession of the share certificates in original and, therefore, it could never be produced along with the transfer deeds. He never sold the shares, neither has he signed any transfer deeds in respect th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eans of two cheques drawn on the Punjab National Bank, Handiaya Bazar, Barnala, as evident from the banker's certificate. In fact after transferring his shares the petitioner had resigned from the board of directors with effect from March 6, 1998, and the necessary Form No. 32 had also been duly filed with the ROC. It was further pleaded that the petitioner as director of respondent No. 1 was responsible for maintaining the registers and records of the company and taking advantage of the registered office being at his residence, the petitioner appears to have taken possession of the original share certificates which he was retaining wrongfully and unlawfully, and on that basis has filed the present petition which deserved to be dismisse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or ₹ 1,50,000 only, and the entire transaction had been conceived and executed by respondent No. 3 fraudulently and mischievously and the petitioner had never been a party to the said transaction. The falsity of the alleged transaction for transfer of shares would also be evident from the fact that the petitioner had executed documents for a term loan for respondent No. 1 from the Industrial Investment Bank of India to the tune of ₹ 330 lakhs in August, 1997, and had he transferred his entire shareholding in respondent No. 1 there was no question of giving any personal guarantee for the repayment of the said loan. As soon as the petitioner came to know regarding the fraudulent and illegal transfer of shares he had brought the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; [1999] 32 CLA 47. 7. This controversy with regard to the scope of jurisdiction of the company court (now the Company Law Board) in respect of rectification of the share members register has now been set at rest by the apex court in Ammonia Supplies Corporation Private Ltd. v. Modern Plastic Containers Pvt. Ltd. [1998] 94 Comp Cas 310 ; [1998] 4 CLJ 211 (SC). In para. 26 of the said judgment the apex court observed as follows (page 325) : There could be no doubt that on any question raised within the peripheral field of rectification, it is the court under Section 155 alone which would have exclusive jurisdiction. However, the question raised does not rest here in case any claim is based on some seriously disputed civil rights or ti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ved as follows (page 383) : If issues which have to be answered are not peripheral to rectification but issues regarding the title, etc., then such other issues will have to be decided by the civil court .... If issues arise whether the applicant is the owner of the shares ; whether there is fraud or forgery in holding the shares or the very title to the shares then such issues will be beyond the jurisdiction of the company court and will have to be decided by the civil court, . . 9. Applying the above-noted tests in the facts of the present case at hand it would be evident that there are serious allegations of forgery, fraud, collusion, manipulation and misrepresentation. The petitioner is claiming that the original share certifica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f ₹ 1,50,000 deposited in the bank account of the petitioner by means of two cheques and being the authorised signatory of the said account withdrew the said amount on the very next day and, therefore, the shares having a face value of ₹ 10 per share was alleged to have been sold for ₹ 1 per share and even the said consideration was not received by the petitioner. As noted above, the said allegation made by the petitioner have been denied by the respondents. 10. From the above, it is apparent that the matter which is for consideration involves highly disputed questions of fact regarding fraud, forgery misrepresentation and manipulation. As held by the Bombay High Court in National Insurance Co. Ltd. v. Glaxo India Ltd. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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