TMI Blog2018 (3) TMI 1392X X X X Extracts X X X X X X X X Extracts X X X X ..... 5.09.2017, the High Court, however, declined to consider the review holding that the same was beyond the scope of review and that the same can be corrected only by a superior forum. We are afraid that the stand taken by the High Court cannot be justified in the factual background we have explained and the legal position analysed above. The appellant having taken specific grounds in the appeal and having raised questions of law regarding its right to refuse registration of transfer on sufficient ground, being a statutory appeal under Section 10F of the Companies Act, 1956, the High Court should have considered the same among other questions of law. - Civil Appeal Nos. 3322-3323 of 2018, (Arising out of S.L.P. (Civil) Nos.8204-8205 of 2018), (Diary No. 485 of 2018) - - - Dated:- 27-3-2018 - Mr. Kurian Joseph And Mr. Mohan M. Shantanagoudar JJ. For the Petitioner(s) : Mr. Satish Kumar, AOR For the Respondent(s) : Ms. Bharti Tyagi, AOR JUDGMENT KURIAN, J.: Delay condoned. Leave granted. 2. The appellant is a public company with majority of shares held by the Government of West Bengal. The respondent, which is holder of 28.54 per cent of the shares ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g upon the Respondent Company to take immediate steps to register and record the name of the Petitioner Company as the registered owner in relation to the aforesaid 100 shares. In this regard, the Respondent Company has replied that the action of the Petitioner Company has been contrary to the SEBI Act as well Substantial Acquisition of Shares and Takeover Regulations. In addition, the Petitioner Company is controlled by M/s MKJ Group which is involved in similar business as the Respondent Company is carrying on and hence, the intention of the Petitioner Company to purchase 100 equity shares is to take over the control of the Respondent Company. It has also been mentioned that on 13.03.2014, the Petitioner Company had already made an application for the sale of its said 254 Shares to the Principal Secretary of Government of West Bengal, Public Enterprises Division as well as the Managing Director of the Respondent Company. In this context, the Petitioner Company Advocate has averred that the question of acquisition being violation of SEBI Act or Takeover Regulation is not applicable in the case of the Respondent Company as the shares of the Respondent Company are not listed. Not on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have been duly filled by the Petitioner Company and the registration of transfer cannot be refused arbitrarily and the reason for non-registration of transfer in favour of the Petitioner Company on the suspicion of acquisition of control by the Petitioner Company over the Respondent Company is baseless and unfounded. Therefore, in the interest of justice, I hereby direct the Respondent Company to register the transfer of impugned 100 shares in the name of the Petitioner Company within 10 days of the receipt of this Order and also, to make suitable entries in the register of members thereafter. 3. The order passed by the Company Law Board in C.P. No. 151 of 2014 was challenged by the appellant before the High Court of Calcutta under Section 10F of the Companies Act, 1956. In the Memorandum of Appeal, the following questions of law were raised: XXV. FOR THAT following substantial questions of law arise for consideration and determination by this Hon ble Court: a. Whether the Learned Company Law Board was to first consider whether the Appeal has been filed within the time prescribed by Section 58 (4) of the Companies Act, 2013 which is condition precedent to assuming ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 59 of the Companies Act 2013, the Learned Company Law Board had jurisdiction to adjudicate an application there under in view of the said provision only providing jurisdiction to the Tribunal? 4. The High Court by order dated 15.10.2015, dismissed the appeal. The Court took the view that since the appeal filed by the respondent before the Company Law Board under Section 58/59 of the Companies Act, 2013 was liable to be admitted and considered even beyond the period of limitation, there was no other question of law taken in the appeal. To quote the relevant portion: The Court : The only question of Law ought to be urged in the proposed appeal is as to whether the Company Law Board lacked authority in receiving the petition under Section 58 of the Companies Act, 2013 beyond the period envisaged in sub-section (4) thereof. 5. The order dated 15.10.2015 passed by the High Court was challenged in Special Leave Petition (Civil) No. 35029 of 2015 by the appellant. The Special Leave Petition was permitted to be withdrawn with liberty to approach the High Court. The said order dated 04.01.2016 reads as follows: The learned counsel for the petitioner seeks permission to withd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Not every mistake is capable of correction in a review. A mistake of law or in the appreciation of facts may be made, but the same would be amenable to correction by a superior forum and not by way of a review. Since no grounds of review are made out, RVW No.59 of 2016 is dismissed without going into the merits of the grounds urged. There will be no order as to costs. 9. The present appeal is filed compositely challenging the orders dated 15.10.2015 and 15.09.2017. 10. We have extensively heard Shri C. Aryama Sundram, learned Senior Counsel appearing for the appellant and Shri Shyam Divan, learned Senior Counsel appearing for the respondent. 11. Refusal of registration of the transfer of shares and the appellate remedy are provided under Section 58 of the Companies Act, 2013. This provision had come into force at the relevant time. The Section reads as follows: 58. Refusal of registration and appeal against refusal. -( 1 ) If a private company limited by shares refuses, whether in pursuance of any power of the company under its articles or otherwise, to register the transfer of, or the transmission by operation of law of the right to, any securities or interes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Companies Act, 2013, the securities or interest of any member in a public company are freely transferable. However, under Section 58 (4), it is open to the public company to refuse registration of the transfer of the securities for a sufficient cause. To that extent, Section 58 (4) has to be read as a limited restriction on the free transfer permitted under Section 58 (2). Section 10F of the Companies Act, 1956, provides that an appeal against an order passed by the Company Law Board can be filed before the High Court on questions of law. Right to refuse registration of transfer on sufficient cause is a question of law and whether the cause shown for refusal is sufficient or not in a given case, can be a mixed question of law and fact. 13. In the instant case, there is no resolution passed by the company refusing to register the transfer of shares. Since the Company Law Board has gone into the contentions by the appellant for refusing to register transfer for all purposes, it has to be taken that those contentions are the grounds taken by the appellant for refusing to transfer the shares. 14. The appellant has taken several grounds in the memorandum of appeal and r ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
