TMI Blog2017 (12) TMI 1317X X X X Extracts X X X X X X X X Extracts X X X X ..... substance because the present matter is being considered not to decide the title of the shares but the question for consideration has been whether the Respondent No. 2 with the support of the other Respondents is unlawfully keeping the Appellants away from the Company claiming that they have transferred their shares leaving them high and dry although they are showing the original shares in hand for their claims. Such acts of oppression cannot be permitted. We find substance in the submissions of the learned counsel for the Appellants that their signatures were taken by Respondent No. 2 for the purpose of negotiating with the bank to arrive at one-time settlement of the company accounts and the same have been misused. Documents relied on by the respondents to claim that appellants resigned from the Board of Directors and transferred their shares are suspicious documents and unreliable. We find that there is no substance in the arguments being raised by the learned counsel for the respondents, in the facts and circumstances of this matter.It is declared that there has been no transfer of shares from the appellants to the Respondents Nos. 2 to 6 as is being claimed by these respon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ired for the purpose of the company and things were normal till 31.03.2005. It is then claimed that sometime in December 2014, the Petitioners received notice dated 15.11.2014 from lawyers of ASREC India Ltd. informing that they had been substituted in place of Axis Bank in the proceeding pending before the Debt Recovery Tribunal - following the assignment of their debts by Axis Bank to their client. According to the Petitioners after such receipt of notice, when they looked into the affairs, they were not entertained by the Respondents who started claiming that they were no longer shareholders or directors of the company and that they had resigned from Board of the Company. The original Petitioners claimed that each of them had 5125 Equity Shares. They had not transferred any share to the Respondent nos. 2 to 6 and still were in custody of the original shares and they had not resigned. They hold 75% of valid, issued and subscribed and paid up share capital of the company. 4. Paragraph-6.29 of the original petition claimed that searches were made in the Register of the Companies after such developments and it was found that purported annual returns of the company for the year 31 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he NCLT picked up part of sentences from different parts of the petition and invoked Section 113 of the Limitation Act 1963, (which applies to suits) to hold that the matter was time barred. The NCLT reasoned that even if it was to be stated that Limitation Act did not apply, it would be a case of delay and latches. The NCLT went on to repeat that it was admitted that the date of knowledge was in 2005-06 and reliefs under Sections 397 and 398 of the Old Act related to equitable jurisdiction and the Petitioners were not entitled to equity as according to the NCLT, the Petitioners had not come with clean hands. The NCLT went on to dismiss the petition. 7. When the Appellants came up before this Appellate Tribunal, the learned Counsel for the Appellants no. 1 to 6/ original Petitioners and original Respondent no. 7 who joined as Appellant here, submitted that the Appellants continued to hold original share certificates even today and the Respondents illegally claimed that the shares had been transferred to them. It is and even under section 108 of the Old Act it was necessary that the original share certificate should be submitted along with transfer form in order to effect the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bank and ASREC India Ltd. on 24.07.2007 and on 01.08.2012. It was claimed that there was no forgery on the part of the Respondents. The Appellants accepted in the NCLT that the documents did bear their signature and except for the Appellant no. 1- Nirakar Dash, the date of cheques and date of money receipts was same i.e. 08.11.2007. It is argued that merely for want of compliance of Section 108 of the Old Act , the sale of shares does not become bad and the NCLT rightly held in this regard. According to the learned counsel for the Respondents original share certificates produced by the Appellants were fabricated and forged because they were signed by one or the other Appellant and although even the Respondents were original promoters and directors, none of the share certificates of the Appellants had signatures of Respondents. It is argued, the Appellants claimed that the cheques had been received towards the refund of loan given to them by Respondent no. 1 but there is no record to show that they had repaid loan. It is argued that unlike Section 111(7)(a) of the Old Companies Act there was no enabling provision in Sections 58 and 59 of the New Companies Act for the NCLT to invest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed or otherwise endorsed thereon shall, after it is executed by or on behalf of the transferor and the transferee and completed in all other respects, be delivered to the company,- (i) in the case of shares dealt in or quoted on a recognised stock exchange, at any time before the date on which the register of members is closed, in accordance with law, for the first time after the date of presentation of the prescribed from to the prescribed authority under clause (a) or within [twelve months] from the date of such presentation, whichever is later; (ii) in any other case, within two months from the date of such presentation.] 10. Keeping in view the above provision, at the time of arguments, the counsel for both the sides were asked to show how the share transfer forms were executed. A sample reference was made to page -511 of the paper book. If the said Form-7(b) Share Transfer Form u/s 108(1A) of Old Act is perused, it shows that the Registrar of Companies had put his seal on top of the share transfer form along with a seal of date recording 07.11.2007 . When the learned counsel for the Respondents was asked as to on what date this share transfer form was execut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellants No. 1 to 7 in favour of Respondent nos. 2 to 6. Learned counsel for the Appellants pointed out that these details claim that the date of registration of transfer of shares by the Appellants was 5th May, 2006 . It is apparent that Respondents are relying on contradictory as well as incomplete and suspicious records coming from them, to support their claim of transfer of shares by Appellants. 12. The Appellants then pointed out Form 32 at page 452 which claims that the Respondent no. 4 - Achinta Paine, was appointed Director on 07.01.2008 but surprisingly, he was signing Director s Report even for the year ending 31.03.2006 as can be seen from page -407. Learned counsel for the Appellants thus is right in her submissions that the Respondents are unlawfully keeping out the Appellants and when the Appellants are still holding the original shares, they are being deprived of right to participate into the affairs of the company in an oppressive manner and the Respondents are mismanaging the affairs of the company. 13. We do not find any substance in the arguments of the Respondents that there was delay in filing of the petition. To consider limitation or delay on laches ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icious documents and unreliable. We find that there is no substance in the arguments being raised by the learned counsel for the respondents, in the facts and circumstances of this matter. 15. Although the learned counsel for the appellants submitted that there should be inquiry under Sections 206 and 207 of the Companies Act, 2013, we are not giving any directions on this count as no such prayers were made in the company petition and the aspect has not been dealt with in the impugned order. 16.(A) For the above reasons, the appeal is allowed. The impugned judgement order of NCLT is quashed and set aside. (B) It is declared that there has been no transfer of shares from the appellants to the Respondents Nos. 2 to 6 as is being claimed by these respondents. (C) The forms submitted by Respondent No. 2 on 25.08.2009 and 02.05.2014 to Registrar of Companies recording resignations of Appellants Nos. 1 to 6 from the Board of Directors and that they had transferred their shareholdings, shall stand quashed and set aside. (D) The respondents are restrained from obstructing the appellants from taking part in the affairs of the company on the basis of their shareholding. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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