9911796707
TMI Blog2019 (3) TMI 1748X X X X Extracts X X X X X X X X Extracts X X X X ..... case, as mentioned in the petition, which are relevant to the issue in question, are as follows : (1) Respondent No. 1 is a public company listed on the Bombay Stock Exchange and National Stock Exchange. Respondent No. 2 is the Registrar and share transfer agent of respondent No. 1. (2) The petitioner is represented by his mother and general power of attorney holder, Smt. Priti Rajesh Shah. The petitioner's father, late Shri Rajesh Himmatlal Shah died on September 12, 2003. (3) As on the date of his death, the petitioner's father was the owner of and held, inter alia, several stocks and securities solely in his own name as well as jointly with his wife, i. e., the petitioner's mother, Smt. Priti Rajesh Shah. These stocks and securities included 3,100 equity shares of respondent No. 1-company. (4) The petitioner's father left behind him surviving the petitioner, his wife, i. e., the petitioner's mother, Smt. Priti Shah, and his mother, i. e., the petitioner's paternal grandmother, Smt. Kantaben Shah. For a few years after the demise of Shri Rajesh Shah, there were serious differences amongst the family members regarding the inheritance of his estate. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent No. 1 in favour of and in the name of the petitioner's father in 2012-13, whereas, the petitioner's father had died on September 12, 2003. On the petitioner's mother's request for copies of certain relevant documents that had not yet been forwarded by respondent No. 2, by its letter dated April 17, 2015 respondent No. 2 forwarded some additional documents to the petitioner's mother. (8) After spending a few months in attempting to file police com plaints in Mumbai, the petitioner received legal advice to file a civil suit in Bangalore for a mandatory injunction to respondent No. 1-company to register the petitioner as the true and lawful owner of the schedule shares and to re-issue the schedule shares to the petitioner in dematerialized format and also to pay/hand over to the petitioner all benefits that arose from and/or on account of the schedule shares on or after September 12, 2003. Therefore, the petitioner's mother eventually filed a civil suit, O. S. No. 1201 of 2016, on February 10, 2016 against the respondents in the hon'ble City Civil Court in Bangalore. The respondents have also filed their written statement denying the petitioner's ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... titioner is, therefore, not entitled to not only have the schedule shares registered in his name as the sole owner thereof but is also entitled to all benefits that arose on account of the schedule shares including all dividends and bonus shares, if any, issued on or after September 12, 2003. The respondents have declined to register the petitioner as the owner of the schedule shares. The petitioner has submitted complaints to the police authorities and intends to seek the respondents' criminal prosecution for fraud, forgery, etc. (12) In the meantime, as respondent No. 1's shares are listed on the stock exchanges, the duplicate shares issued in lieu of the schedule shares have apparently been sold and innocent investors may have purchased the said duplicate shares. The petitioner reiterates that when the very issuing of the duplicate shares in lieu of the schedule shares is fraudulent, no law ful rights and/or entitlements can arise in respect of the schedule shares. Any loss that may be suffered by innocent investors who may have purchased the duplicate shares issued in lieu of the schedule shares must be made good by the respondents or any other person responsible for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h sent another letter to the second respondent stating that he had not received the new share certificates and other corporate benefits issued in time to time by the company due to the non-information of his new address and requested to send the entire new certificates to his newly registered address. (3) It is stated that the second respondent being the Registrar and transfer agents of the first respondent wrote a letter to Rajesh H. Shah inti mating that the old share certificate Nos. 335056 to 335086 for 3100 equity shares stood cancelled upon the issuance of new equity shares bearing Share Certificate No. 512246 upon amalgamation of the company. The new equity share certificates were sent by registered post on July 12, 2001 to Shri Rajesh H. Shah to his registered address and the same was not returned to the company. In addition, Share Certificate No. 2203 for 620 equity shares of McDowell Holdings Ltd., which was issued additionally against his 3,100 equity shares of United Spirits Ltd., consequent to demerger of the company in the ratio 1:5 was also mailed to his registered address and the same was also not returned as undelivered. He was also instructed by the second respo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion for issuance of new equity share certificates to Shri Rajesh H. Shah and other persons who have lost the original certificates. Accordingly, the following duplicate share certificates were issued to Rajesh Himmat bhai Shah (Rajesh H. Shah) : Folio No. MS144742, Certificate No. 571721, Distinctive Nos. 43536689 to 43539788, Nos. of shares : 3,100 of United Spirits Ltd. And thereafter, the second respondent received a letter dated March 9, 2013 along with dematerialization request form of Rajesh H. Shah and accordingly it was dematerialized. (8) By going through the documents produced by the petitioner, this respondent recollects that the petitioner had approached during January, 2013 and collected all the information about the issuance of duplicate shares from the second respondent. The petitioner had waited till the shares were sold by the original allottee Rajesh H. Shah and thereafter they had applied for succession certificate in the High Court with the old physical shares which had the same name of the petitioner's father. (9) It is pointed out that the original allottee's name is Rajesh H. Shah, son of Himmat Bhai Shah whereas the petitioner's father&# ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioner had knowingly approached the civil court vide O. S. No. 1201 of 2016 on the file hon'ble LIX Additional City Civil, Sessions Judge at Bangalore. The hon'ble Civil Judge vide his order dated November 2, 2016 upon perusing the petition and counter, had gone through the facts of the case on merits in detail and rejected the suit for want of jurisdiction. It is further submitted that the petitioner frustrated with their illegal claim in order to pressurize the respondents, the petitioner had also filed a private criminal complaint against the respondents clearly shows that the petitioners are not the true and lawful owner of the shares and the petitioner was only attempting to usurp money and all the averments and allegations made in the petition were invented for the purpose of this case and self-serving nature. 4. Heard Shri Dhananjay Joshi, learned counsel for the petitioner and Shri R. Subramanian, learned counsel for respondents Nos. 1 and 2. We have carefully perused the pleadings of both the parties along with material papers filed in their support and law cited by the parties. 5. Shri Dhananjay Joshi, learned counsel for the petitioner while reiterating th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... led to receive the debts specified therein. The debtors cannot challenge this fact. The presumption raised by the succession certificate being conclusive and absolute, it cannot be displaced even upon the ground of a previous decision to a contrary effect". The hon'ble Allahabad High Court also rejected the contention that the succession certificate was not binding on those who were not parties to the proceedings in which the said certificate was granted holding that : "It was urged that the debtors were not parties to the proceedings which resulted in the grant of the succession certificate. That is true. But succession certificate proceedings are, as against the debtors, in the nature of judgment in rem. They are binding to them whether they are represented in the proceedings or not". (5) The law laid down in Ganga Prasad v. Mst. Saeedan [1952] All. LJ 406 has been quoted with approval in several cases over the years and continues to hold good. (6) The petitioner's father, Rajesh H. Shah, the true owner of the schedule shares, died on September 12, 2003 and could not have approached the respondents in July, 2012, for any purpose. (a) In their reply/counter to the ab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Belgium, as is recorded in the allotment application submitted to the respondent. The original of the same is surrendered to the authorities in Belgium for issuance of a fresh identity card. (3) Identity Card No. 591955219225 dated September 3, 2012 of the petitioner issued by the Belgium authorities. (4) Model 8 Form, dated September 3, 2009 of the petitioner issued by the Belgium authorities, which records the current address of Mumbai, i. e., 18, Prem Milan, 2nd Floor, 87B, Napean Sea Road, Mumbai-400 006 and other details of the petitioner including the petitioner's father's name, date of birth, etc. The original of the same is submitted to the Belgium Consulate Office at Mumbai. (5) Certificate issued by the Belgium Consulate office at Mumbai confirming that the petitioner is a Belgium National. (v) Copy of the birth certificate of the petitioner This bears the petitioner's father's name, Rajesh H. Shah, and also the same address of Mumbai, i. e., B/2, 7th Floor, Matru Ashish, 454, Napean Sea Road, Mumbai-400 006 as stated in the application submitted to the respondents for allotment of the schedule shares. (vi) Copy of the Postal Ballot Forms addres ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts of their obligation to issue the schedule shares to the petitioner when the very issuance of duplicate shares by the respondents is, evidently, void in law. (c) Recently, in a judgment passed on July 3, 2018 in Civil Appeals Nos. 19426 and 19427 of 2017, Adesh Kaur v. Eicher Motors Ltd. [2018] 210 Comp Cas 719 (SC), in a case with strikingly similar facts, the hon'ble Supreme Court held that even if someone else's name is entered in the share register of the respondents in respect of the duplicate shares, such name must be cancelled as the very issuance of the duplicate shares is void in law. In this case, the hon'ble Supreme Court directed the company to rectify the share register and restore the name of the original owner of the shares as the true and lawful owner. Therefore, learned counsel urged the Tribunal to allow the company petition, as prayed for. 6. Shri R. Subramanian, learned counsel for respondents Nos. 1 and 2, while reiterating the contentions made in the pleadings filed on behalf of the respondents has further, inter alia, contended as follows : (1) The second respondent is a bona fide issuer of the duplicate shares since the same has been is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid Shri Rajesh H. Shah son of Himmat Bhai Shah with share certificates bearing Nos. 43536689 to 43539788. In the year 2001, upon amalgamation the old share certificates were cancelled and new share certificate were issued bearing No. 571721 to the original share allottee, namely, Shri Rajesh H. Shah son of Himmat Bhai Shah. (6) On June 30, 2012 Shri Rajesh H. Shah, son of Himmat Bhai Shah writes letter to respondent No. 2 being the Registrar and transfer agent with proof of address (Reliance Electricity Bill). On July 10, 2012 the second respondent being the Registrar and transfer agent makes changes in the communication address of the original allottee and communicates the same to the original allottee. On August 14, 2012 the original allottee writes letter to the second respondent stating that he had not received the new share certificate and benefits such as dividends issued by respondent No. 1-company and request for new share certificates and other benefits since he failed to inform the change of address much earlier. (7) On August 25, 2012 the second respondent writes a detailed reply stating that the new share certificates were sent to the original communication address ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2-company for dematerialization of the physical share certificates. (11) The respondents had issued the duplicate shares after strictly following rules and procedures prescribed under the Act and Rules as well as the guidelines issued by the SEBI, hence, the same cannot be disputed by the petitioner and all the subsequent transfer also cannot be disputed or questioned by the petitioner in any manner. The respondents submit that after the allotment of duplicate shares and pursuant to dematerializing the physical shares through demat account at Swastika Investments Ltd., the original allottee obtained the absolute right and liberty to deal with the shares in any manner he may deem fit. (12) While so, the petitioner in whose father name (late Rajesh Himmatlal Shah son of Himmatlal D. Shah who happened to have resided at No. 18, Prem Milan, 2nd Floor, 87-B, Nepean Sea Road, Mumbai-400 006) claimed for transmission of shares had failed to inform about his father's death on September 12, 2003 to any of the respondents not to deal with the shares in any manner. Since the physical share certificates were in his possession he had unlawfully used the name of his father as if it is th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in issuing duplicate shares to respondent No. 3 ? (5) Whether the respondents are justified in refusing the transfer of the shares of the father of the petitioner ? (6) If so what is relief the petitioner is entitled to. 8. As narrated supra, it is not in dispute that respondent No. 1-company has issued the impugned shares and the only dispute is whether rejection of respondents Nos. 1 and 2 for transmission of shares in favour of petitioner and issuing those shares to imposter (third respondent) is justified or not. 9. The petitioner has filed the following documents with regard to the identity of the father of the applicant (Rajesh Himmatlal Shah) : (1) Copy of PAN Card No. AMYPS5161Q of Rajesh Himatlal Shah (2) Copy of Identity Cards issued to the petitioner's father Rajesh Shah by Belgium authorities (3) Copy of Birth Certificate of Rajesh Shah (4) Copy of Identity Cards issued to the petitioner by Belgium authorities (5) Copy of Birth Certificate of petitioner (6) Copy of Postal Ballot Forms (7) Copy of Dividend Warrants (8) Copy of Share Certificate issued by respondents to petitioner's father (9) Copy of passbook of the bank account of the pet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... changed and thus requested to effect change and extend pending corporate benefits on Registered Folio No. MS 144742. He did not say anything about the shares issued and no documents stated to have enclosed to the letter. Immediately, respondent No. 2 has effected change of address as requested vide letter dated July 9, 2012 simply basing on the above letter. And thereafter started making correspondence by another letter dated August 14, 2012 by intimating that he has not received new certificate issued by the company against old shares. 13. In response to above letter dated August 14, 2012 respondent No. 2 acted too fast by its reply dated to the third respondent by, inter alia, furnishing information that old shares issue stand cancelled on amalgamation of the company and new shares also issued to the shareholder by speed post on July 12, 2001 to the address recorded in their record and they were not returned back means that they have been received by the addressee. It is also stated that dividend warrants issued to the original shareholders stand encashed except 7 warrants mentioned therein and thus advised him to return those uncashed warrant for invalidation. In the instant ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of or in relation to the said original share certificate(s) by any party whatsoever as also against all claims, demands, damages, costs, and losses, expenses that the company may have to suffer or incur either in prosecution or in defence of any suit, claims or demands." Another affidavit dated December 3, 2012 is executed by him (pages 74 and 75), wherein, it is, inter alia, stated that the impugned shares have been lost/misplaced/not received. Respondent No. 3 has filed a certificate dated September 15, 2012 issued by Kandiwali Police, Thane, Kandiwali West, Mumbai-67, which reads as under : "This is to certify that Shri Rajesh H. Shah, occupation-business, resident of Shanti Co-operative Housing Society Ltd., Plot No. 16, Flat No. 712, near Charkop Depot, Charkop, Kandiwali-West, has visited Charkop Police Station on July 14, 2012 at 2.30 p.m. and informed that while travelling from Charkop to Kandiwali Station by taxi, the below mentioned documents have been lost and the fact of the loss has been registered with Kandiwali Police Station with reference No. 2174 of 2012, dated July 14, 2012. Company's name : United Spirits Ltd. and McDowell's Holdings Ltd. Folio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t as detailed supra. Once the petitioner established that shares were initially issued to the father of the petitioner, and he is the legal heir of Rajesh H. Shah to claim the shares in question, he is entitled to transmission of those shares. As stated supra, basing on the succession certificate several companies have accepted the request of the petitioner for transmission of shares in favour of the petitioner. Therefore, the grounds raised by the respondent is not at all tenable and are liable to be rejected. 18. As rightly pointed out by learned counsel for the petitioner that the succession certificate granted by court is judgment in rem and it cannot be questioned in the instant company petition and the Tribunal is not competent to examine that certificate. Respondents Nos. 1 and 2 cannot ignore and question the certificate in the instant proceedings. It is not in dispute that the succession certificate issued by the hon'ble High Court became final and none including the respondents have questioned the certificate and thus it is binding on the parties whosoever is concerned. The judgments as cited by learned counsel for the petitioner support the case of the petitioner. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent No. 1 is directed to transfer 3,100 (three thousand one hundred) equity shares of United Spirits Ltd., bearing Distinctive Numbers 0043536689 to 0043539788 in Folio No. MS 144742 standing in the name of Rajesh Himmatlal Shah as on September 12, 2003 to the petitioner within a period of two weeks from the date of receipt of the copy of the order.
(2) The petitioner is entitled to corporate benefits like dividends, etc., with effect from January 16, 2016, i. e., one year prior to filing of the pre sent company petition which is filed on January 16, 2017.
(3) Respondents Nos. 1 and 2 are at liberty to take appropriate legal action in accordance with the clause 4 of the Indemnity Bond dated December 3, 2012 and respondents Nos. 1 and 2 are also liable to com pensate the claims arise by virtue of trading of transferred shares in question.
(4) Respondents Nos. 1 and 2 are directed to comply with the above directions within a period of three weeks from the date of receipt of copy of order, failing which the respondents are liable to pay bank interest on amount due on account of consequential benefits.
(5) Parties are directed to bear their own costs. X X X X Extracts X X X X X X X X Extracts X X X X
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