TMI Blog2018 (12) TMI 1374X X X X Extracts X X X X X X X X Extracts X X X X ..... he shares to the Company. If there is contravention of any of the provisions of the Securities Contracts (Regulation) Act, 1956, the ‘Securities and Exchange Board of India Act, 1992’ or the Companies Act, 2013 or any other law for the time being in force, the Tribunal could have directed the company or a depository to set right the contravention and rectify its register or records concerned. The impugned judgment dated 5th July, 2017 cannot be upheld and the same is accordingly set aside. - Company Appeal (AT) No. 240 of 2017 - - - Dated:- 6-12-2018 - Sudhansu Jyoti Mukhopadhaya J. (Chairperson) And Bansi Lal Bhat J. (Judicial Member) For the Appellants : Mr. Amit Sibal, Senior Advocate with Mr. Dhruv Dewan, Mr. Arjun Sharma, Ms. Reena Choudhary, Ms. Yashna Mehta, Mr. Bodhisatta Biswas, Mr. Rahul Kumar and Mr. Vinay, Advocates. For the Respondent : Mr. S.N. Mukherjee, Mr. Arun Kathpalia and Mr. Ratnanko Banerjee, Senior Advocates with Ms. Soumya Roy Chowdhury, Mr. Krishnendu Datta, Ms. Iram Hassan, Mr. Rook Ray, Mr. Gaurav Gupta, Ms. P. Johri, Mr. Debanjan Mandal and Mr. Kumarjit Banerjee, Advocates. JUDGMENT SUDHANSU JYOTI MUKHOPADHAYA, J. The IFB ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 59 of the Companies Act, 2013) has jurisdiction to direct the Respondents (Appellants) to sell its shares to the company and the Company to buy back the shares of the Respondents (Appellants). 3. The brief facts of the case are as follows: On 22nd January, 2004, the Company (Petitioner) received a letter from the Respondent (1st Appellant) under Regulation 7(1) of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 notifying that it had acquired 600 shares taking the total shareholding of the Respondents beyond 5% of equity share capital of the Company and as a result the Respondents became entitled to a further 0.008% of the voting rights in the Company and the combined shareholding strength and/or voting rights of the Respondent (1st Appellant), as at the date of issuance of the said letter stood at 5.003%. Following the receipt of the said letter of 16th January, 2004, the Company enquired and discovered that the shareholding strength and/or voting rights of the Respondents (Appellants) in the Company as on 16th January, 2004 was 4.988%. The Company alleged that the Respondents (Appellants) were acting in c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Exchange Board of India (Prohibition of Insider Trading) Regulation, 1992 . Different expressions of persons have been mentioned therein. It was also submitted that the Respondents ( Appellants ) have given the requisite information either within time or a little bit beyond the time. 8. Learned counsel appearing on behalf of the Appellants ( Respondents before the Tribunal) submitted that the 1st Appellant purchased fresh shares of the Company from the open market. When the combined shareholding of the Appellants in the Company exceeded 5% of the issued capital on 19th January, 2004, the same was disclosed by the 1st Appellant in terms of Regulation 7 of the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 on the next day i.e. 20th January, 2004 to the Company as well as to the stock exchange. 9. In so far as the disclosure as required to be made under Regulation 13 of the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulation, 1992 is concerned, it was submitted that the 1st Appellant inadvertently failed to make such disclosure within time with regard to the acquisition of shares o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s or voting rights held by such person, on becoming such holder, within 4 working days of: - (a) the receipt of intimation of allotment of shares; or (b) the acquisition of shares or voting rights, as the case may be. (2) Any person who is a director or officer of a listed company shall disclose to the company in Form B the number of shares or voting rights held and positions taken in derivatives by such person and his dependents (as defined by the company), within four working days of becoming a director or officer of the company. Continual disclosure (3) Any person who holds more than 5% shares for voting rights in any listed company shall disclose to the company in Form C the number of shares or voting rights held and change in shareholding or voting rights, even if such change results in shareholding falling below 5%, if there has been change in such holdings from the last disclosure made under sub regulation (1) or under this sub-regulation; and such change exceeds 2% of total shareholding or voting rights in the company xxx xxx xxx (5) The disclosure mentioned in subregulations (3) and (4) shall be made within four working days of: (a) the rece ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (5) The provisions of this section shall not restrict the right of a holder of shares or debentures, to transfer such shares or debentures and any person acquiring such shares or debentures shall be entitled to voting rights unless the voting rights have been suspended by an order of the Company Law Board. (6) Notwithstanding anything contained in this section, any further transfer, during the pendency of the application with the Company Law Board, of shares or debentures shall entitle the transferee to voting rights unless the voting rights in respect of such transferee have also been suspended. (7) The provisions of sub-sections (5), (7), (9), (10) and (12) of section 111 shall, so far it may be, apply to the proceedings before the Company Law Board under this section as they apply to the proceedings under that section. 17. From sub-section (3) of Section 111A, it is clear that if the transfer of shares or debentures are in contravention of any of the provisions of the Securities and Exchange Board of India Act, 1992 , the Tribunal, after inquiry, may direct any depository or company to rectify its register or records . It does not empower the Tribunal to p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all be registered by the company within a period of ten days of the receipt of the order or direct rectification of the records of the depository or the register and in the latter case, direct the company to pay damages, if any, sustained by the party aggrieved. (3) The provisions of this section shall not restrict the right of a holder of securities, to transfer such securities and any person acquiring such securities shall be entitled to voting rights unless the voting rights have been suspended by an order of the Tribunal. (4) Where the transfer of securities is in contravention of any of the provisions of the Securities Contracts (Regulation) Act, 1956 (42 of 1956), the Securities and Exchange Board of India Act, 1992 (15 of 1992) or this Act or any other law for the time being in force, the Tribunal may, on an application made by the depository, company, depository participant, the holder of the securities or the Securities and Exchange Board, direct any company or a depository to set right the contravention and rectify its register or records concerned. (5) If any default is made in complying with the order of the Tribunal under this section, the company shall ..... X X X X Extracts X X X X X X X X Extracts X X X X
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