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TMI Blog2021 (12) TMI 1061X X X X Extracts X X X X X X X X Extracts X X X X ..... style of Bond Trading Co. LLP incorporated in Abdu Dhabi, UAE. As per the Memorandum of Association ('MoA') and Articles of Association ('AoA') of the company, the 2nd Respondent (Mr. Joy Chemmala Alias) being the Managing Director held 750 equity shares and the daughter of the Appellant, Late Smt. Bindu Mathew being the other director held 250 equity shares of the company worth Rs. 100 each. It is also stated that in the year 2010, the Respondent No.2 approached Bindu Mathew to discuss a potential partnership plan entailing, acquiring and developing land having an extent of 98.48 Ares in Re-Survey No.10/2 of Marayoor Village, Idukki for the purpose of doing a business in herbals and fruit farming. The Respondent No. 2 and late Smt. Bindu Mathew alone constituted the Board of Directors for the entire period till her death. 3. At the time of formation of the Company Smt. Bindu Mathew made commitment on furnishing her properties covered under Sale Deed Nos. 2672/2010 and 2673/2010 of S.R. Devikulam as adequate security for the loan facility and as her "half" of the investment. It is further stated that as per the latest Income Tax Returns of Respondent No.1 company for the year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eriod specified in Section 56. 6. The Appellant also stated that the company or the Board of Directors do not have the power to reject the transmission of shares as envisaged under Section 56 of the Companies Act, 2013 on mere discretion. The communication does not make out any procedural or substantial infirmity in the transmission or the successorship. 7. It is also stated that the ownership and shareholding of the company is disputed and where the interests of Late Smt. Bindu Mathew, the first director and essentially the promoter of the company who has loaned large amounts of money to the company, is unprotected and sought to be alienated by the ulterior motive of Respondent No. 2. 8. Therefore, the Appellant has filed this Company Appeal with the following prayers: i. Allow this appeal and pass an order setting aside Exhibit P-9 as being illegal, arbitrary and without the force of law; ii. To direct the 1st Respondent Company to transmit the shares of the company formerly held by Smt. Bindu Mathew in the name of the Appellant who is her sole successor; iii. To direct the 1st Respondent Company to give the due dividends and other corporate benefits attached to the shar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Appellant for transmission of shares., and as such the limitation will attract. 13. It is stated that the 1st Respondent is a private limited company limited by its shares and the Article 11 of the Articles of Association as follows: 11. That Board may refuse to register any transfer of shares, subject to the provisions of the Companies Act, 1956: a) Where the share is not fully paid up; b) When the company has a lien on the share; c) Without stating any reason thereof where it is not proved to their satisfaction that the proposed transferee is a responsible person; d) Where the Board is of the opinion that the proposed transferee is not a desirable person to admit to membership; But clauses (c) and (d) of this Article shall not apply where the proposed transferee is already a member. 14. It is further stated that the Appellant had to prove to the 1st Respondent company that he is a responsible person. The Appellant has miserably failed to submit and prove this in his application for Transmission of shares dated 19.03.2020 and consequentially convince the 1st Respondent that he is a responsible person. Therefore, the Respondent prayed that the Company Appeal may b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order; or (b) direct rectification of the register and also direct the company to pay damages, if any, sustained by any party aggrieved. (6) If a person contravenes the order of the Tribunal under this section, he shall be punishable with imprisonment for a term which shall not be less than one year but which may extend to three years and with fine which shall not be less than one lakh rupees but which may extend to five lakh rupees. 16. In order to arrive at a decision in the matter, we have framed the following issues: i. Whether the Appeal filed with appropriate documents? ii. Whether the Appellant have locus standi to file this Appeal? iii. Whether this Appeal is barred by limitation? 17. Point no.(i): To arrive at a definitive conclusion with regard to the Issue we have gone through the documents produced by the Appellant. In Page No. 9 of the Appeal, it is stated that "A true and correct copy of the Section 56 application dated 19.03.2020 is produced herewith and marked for reference as Exhibit P-8". We have gone through the Exhibit P-8 and found that the Application for Transmission of Shares/ Debentures produced by the Appellant is not in proper form and the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts to the Appellant regarding the request of transmission of shares by the Appellant. This Appeal has been filed before this Tribunal on 01.10.2020 i.e., after 93 days from the date of rejection of the Application. Hence, the application is barred by limitation period under Section 58(3) of the Companies Act, 2013. 20. During the course of arguments, the learned counsel for Respondents opposed the acceptance of this application, as it was filed with 93 days delay from the prescribed date for filing an application under Section 58(3) of the Companies Act, 2013. However, he graciously submitted that if the Appellant file a proper Application with relevant documents before the Respondents, they are ready to consider the transmission of shares in favour of the Appellant, if the Respondents are satisfied with the application so filed. 21. We do not find any reason to entertain this application and grant the relief sought herein. However, since the learned counsel for Respondents stated that the Respondents are ready to consider if the Appellant submits proper application for transmission of the shares, if it is in order, this Appeal is rejected with liberty to the Appellant to approa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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