TMI Blog2003 (5) TMI 525X X X X Extracts X X X X X X X X Extracts X X X X ..... r. Thereafter, the petitioner by his letter dated 04.03.1997 forwarded the original share certificates in respect of the impugned shares together with the transfer form to the Company to register the transfer in favour of the petitioner. In spite of repeated demands made in writing by the petitioner and the legal notice, the Company failed to register the transfer in respect of the impugned shares in favour of the petitioner. In this connection, Shri Shah referred to the correspondence exchanged between the parties. According to the petitioner, the plea of the respondents 1 to 3 made before the CLB for the first time that the impugned shares were sold by the petitioner and GCP to the third respondent and the transfer was registered by the Company on 15.02.1995. The third respondent had subsequently transferred the shares in favour of the second respondent for valid consideration is far from truth, forcing the petitioner to implead the alleged transferees as respondents No. 2 3 and the Chartered Accountant of the Company, as respondent No. 4. The petitioner had neither executed any transfer deed transferring the impugned shares in favour of the third respondent nor received any co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Company had proposed to sell the entire shares held by them, the Board of Directors at its Board meeting held on 20.04.1992 resolved to sell the shares in favour of the second respondent and his group and further authorized the third respondent to do all that is necessary for completion of the transfer of shares. The petitioner was also a party to the resolution passed by the Board of Directors of the Company. Accordingly, the second respondent had purchased all the shares of the company including the impugned shares from the petition for valuable consideration. As the third respondent was in-charge of the affairs of the Company and the original share certificates as well as the transfer forms in respect of the impugned shares were in her custody, the Board of Directors of the Company had on 15.02.1995 approved the transfer in her favour. Thereafter, the third respondent had applied for duplicate share certificates in respect of the impugned shares on 02.09.1995, since the original share certificates and the transfer forms were missing and further executed an indemnity bond indemnifying the Company, upon which the Company issued duplicate share certificates to the third resp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... impugned shares for ₹ 9,61,600/-. As the transfer instruments were in compliance with the provisions of Section 108, the Company had registered the transfer in respect of these shares in favour of the second respondent. The petitioner and GCP and voluntarily transferred the impugned shares as early as in February 1995 and the present petition has been filed with the ulterior motive in order to disturb the right of the second respondent. As the Company had issued duplicate share certificates in favour of the third respondent as early as in September, 1995 the share certificates lodged by the petitioner with the Company is a dead security and the Company cannot seek to transfer any dead security under the provisions of the Act. Though the petitioner has alleged fraud and collusion against the respondents, but failed to give any particulars of fraud on account of which the petition is liable to be dismissed. Shri Baskar reiterated that second respondent and his family purchased the entire shares from the third respondent in good faith without any notice of defect in the title and that the Company had registered the transfer of shares in favour of the second respondent, in which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion as filed under Section 111A and accordingly considered the same on merits under Section 111A to meet the ends of justice, as adopted by the CLB in quite a number of cases. With regard to the submissions of learned counsel for the respondents that the petition is barred by limitation and that the petitioner is guilty of laches, delay and acquiescence on account of the delay in filing the petition, beneficial reference is invited to the decision of a division bench of the Calcutta High Court in Smt. Nupur Mitra v. Basubani Pvt. Ltd. (1999) 2 CAL LJHC 264, where it has been held that in proceedings under Section 111 of the Act, the provisions of Limitation Act would apply. This decision of the Calcutta High Court has been upheld in the appeal by the Apex Court, which is binding on the Company Law Board. If so, then the delay, if any in bringing the petition is required to be condoned in the interest of justice where no gross negligence or deliberate inaction or lack of bonafides is imputable to the parties seeking condonation of delay as propounded by the Apex Court in G. Rama Gowda v. Special Land Acquisition Officer, Bangalore - AIR 1988 SC 97. In the present case, it is on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner in favour of the third respondent only in their counter filed to the main petition. It is patently clear from the certified true copy of the resolution No. 5 passed by the Board of Directors of the Company at its meeting held on 15.02.1995 (Page 3 of index of documents by the Company) that the third respondent had not lodged the original share certificates in respect of the impugned shares and the share transfer form executed by the petitioner and GCP as they were in the custody of the third respondent at the registered office of the Company and that at the request of the third respondent the Company had approved the transfer of the impugned shares in favour of the third respondent without lodgement of the original share certificates and share transfer form. It is therefore, beyond doubt that the mandatory provisions of Section 108 were not complied with while registering the transfer of shares in favour of the third respondent. Consequently the transfer effected in favour the third respondent is not valid. By a letter dated 11.08.1995 (Page 10 of Rejoinder to Counter filed by the Company) the third respondent had requested for the original share certificates along with the sha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respondent for purchase of the shares from the petitioner on 15.02.1995. While according to the respondents the second respondent had purchased the impugned shares for valid consideration from the third respondent as early as 1995 the certificate issued by the Indian Ban dated 02.04.2001 (Page 11 of typed set of documents by the Company) shows that a cheque bearing No. 763706 of ₹ 9,61,600 drawn in favour of the third respondent, representing sale proceeds of all the shares of the Company including the impugned shares was realized on 16.04.1992, 41 months prior to the sale. This discrepancy remains unexplained. For these reasons, the plea of the respondents is not convincing and must fail. The case laws cited on behalf of the respondents, in my view, are inapplicable to the facts and circumstances of this case. 8. Taking into consideration the facts and circumstances of the case, submissions made on behalf of both the parties and the legal position set out hereabove, it is hereby directed that the Company shall rectify its register of members by registering the transfer of impugned shares in the name of the petitioner and deleting the name of the second respondent within t ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
