Vimla Yadav, Member

1. In this order I am considering Company Petition No. 8/111/2008 filed by Shri Ajit R. Kapadia (the petitioner) against M/s. Jaiprakash Associates Ltd. and others (the respondents) under section 111 of the Companies Act, 1956 (hereinafter referred to as "the Act") wherein the petitioner has sought reliefs that the 5,400 shares of respondent No. 1 company be transferred in the name of the petitioner ; respondent No. 1 and respondent No. 2 be directed to rectify the register of members and name of the petitioner be recorded in the register of members of respondent No. 1 company in place of respondent No. 3 to respondent No. 16 ; if any benefit/shares accrued in the past and or due against the concerned shares in dispute, that be given to the petitioner and respondents Nos. 1 and 2 be directed to bear all costs incurred by the petitioner in the litigation.

2. The petitioner's case is that on June 25, 1996, the petitioner purchased 5,600 shares of respondent No. 1 from the open market. In the year 1994 the petitioner, an employee in the Western Railway, was transferred to Ahmedabad. During his stay at Ahmedabad the petitioner contacted a broker to sell the above 5,600 shares of J.P. Industries, but he was informed that the transfer deeds are outdated and are required to be revalidated for transfer in his name and only after that the petitioner can sell them. Accordingly, the petitioner kept the transfer deeds separate for their revalidation. But unfortunately due to the disastrous earthquake, the house of the petitioner collapsed and so many valuable article/documents were lost. The original share certificates which were in the bank locker were safe. In November, 2003 the petitioner left his job in the Railways. He approached the investor service department of the Bombay Stock Exchange where he was informed that he should lodge a police complaint report for loss of transfer deeds. The petitioner went to Ahmedabad and on November 25, 2003, lodged a complaint with P.S. Navrangpura, Ahmedabad. On December 1, 2003, the petitioner wrote a letter to the Jaiprakash Industries Ltd., for transferring the 5,600 shares in his name along with the copy of police complaint, bills of purchase and delivery note. The petitioner personally and his representative also visited the office of the company at Delhi. In the year 2004 the Jaiprakash Industries Ltd., was amalgamated with its wholly owned subsidiary, Jaypee Cement Ltd., and the name of Jaypee Cement Ltd., was changed to Jaiprakash Associates Ltd. (JAL) after amalgamation. On March 24, 2004, in response to the letter dated December 1, 2003, the company under the new name replied to the petitioner, requiring ownership proof of shares by way of broker note of a member of a recognised stock exchange and to get injunction order from the court of competent jurisdiction. It was also informed that the company's name has been changed to Jaiprakash Associates Ltd., and one equity share of Rs. 10 at par in JAL for each equity share held in Jaiprakash Industries Ltd. (JIL) on the record date, i.e., March 30, 2004. Since the petitioner was not registered as a shareholder in their record they shall not be able to hold the new share certificate without any injunction order before the record date. The petitioner wrote a letter to the company on March 31, 2004, mentioning his grievance and requesting to protect his interest and to withhold the new shares. This letter was not replied to by respondent No. 1 company. On June 27, 2004, the petitioner again wrote a letter to respondent No. 1 requesting to provide the necessary details and procedure to be followed to get the shares registered in his name. Because of the harassment, the petitioner wrote a complaint to the SEBI, Mumbai on July 19, 2004. The same was replied by respondent No. 1 vide letter dated September 6, 2004. Vide letter dated July 19, 2004, Shri T.D. Joshi, resident manager of respondent No. 1, replied to the above letter and gave the names and addresses of the registered holders as per their records of the disputed share certificates. On getting the information the petitioner tried to meet the registered holders. Some of them demanded a letter from the company in this regard. On September 2, 2005, the petitioner wrote a letter to respondent No. 2, who are the Registrar and share transfer agent of respondent No. 1, requesting to provide the proforma of the buyer's indemnity bond and affidavit, which was never replied to by respondent No. 2. On February 17, 2006, the petitioner once again wrote a letter to respondent No. 1 informing the factual position. Respondent No. 1 vide their letter dated March 6, 2006, informed that out of 5,600 shares, details of only 5,200 shares are correct which shares have been marked as stop transfer and they require an injunction order from a court of competent jurisdiction. The petitioner vide his letter dated March 12, 2006, informed the company that once again he will try to contact the registered members to do the needful. The petitioner made efforts to personally contact the registered members to get the fresh transfer deeds and succeeded in getting the transfer of 200 shares (Share Certificates Nos. 47127 and 18520) in his favour. Now 5,400 shares are yet to be transferred in his name for which the company had asked him to get the order from the Company Law Board. Hence this petition.

3. The petitioner wrote letters to the registered members concerned, but nobody turned up giving consent or even raising objection. The petitioner through his counsel sent a legal notice dated January 10, 2008, to respondents Nos. 1 and 2 both informing them about his willingness to file the case before the Company Law Board and requesting them to provide the present status of the concerned shares. Respondent No. 1 along with the addresses available with them and to mark stop transfer instructions till further orders from the Company Law Board. It was contended, placing reliance on the case law in Peerless General Finance and Investment Co. Ltd. v. Poddar Projects Ltd. (2007) 136 Comp Cas 160 (Cal), that the Legislature did not intend to put any restriction on the time period with regard to the lodgment of the documents of transfer of shares in respect of public companies, the decision of the Company Law Board in Vijaya Finance Corporation Ltd. v. Peerless General Finance and Investment Co. Ltd. (2006) 129 Comp Cas 733, affirmed on the point that there is no time limit prescribed in section 111A to approach the Company Law Board. Sub-section (3) of section 111 has not been included therein meaning thereby the legislators did not intend to put any restrictions on time period with regard to the lodgment of share in respect of public companies. It was never the intention of the Legislature to allow the company to refuse rectification on the plea of limitation in the case of public companies. Further, reliance was placed on Peerless General Finance and Investment Co. Ltd. v. Poddar Projects Ltd. (2007) 136 Comp Cas 197 (SC) ; P.S. Securities Ltd. v. ITC Ltd. (2007) 137 Comp Cas 727 (CLB) ; Abhipra Capital Ltd. v. JCT Electronics Ltd. (2002) 111 Comp Cas 863 (CLB) ; A. Nitin Capital Services Ltd. v. Larsen and Toubro Ltd. [2003] 5 Comp. LJ 372 (CLB) ; Mrs. S. Seetha v. Satyam Computer Services Ltd. (2002) 112 Comp Cas 139 (CLB) ; [2002] 4 Comp. LJ 485 and Prem Kabra and Co. v. Mangalore Refinery and Petrochemicals Ltd. (2009) 148 Comp Cas 56 (CLB).

4. Respondent No. 1 and respondent No. 2's case is that the petition merits dismissal merely on the ground that the same has been filed under section 111 of the Companies Act, 1956, instead of under section 111A of the Act. The petition merits dismissal primarily on the ground of non-lodging of the instrument of transfer by the petitioner with the answering respondent, as the petitioner has never delivered the relevant share certificates along with the duly executed transfer deeds with the respondent-company for transferring 5,400 shares of the erstwhile M/s. Jaiprakash Industries Ltd. (JIL) in his name, alleged to have been purchased by him in 1996. It is submitted that in the year 2004, JIL was amalgamated with M/s. Jaypee Cement Ltd., which was later renamed M/s. Jaiprakash Associates Ltd. (JAL), in terms of the scheme of amalgamation sanctioned by the Hon'ble High Court of Judicature at Allahabad. It is further submitted that according to the scheme of amalgamation, the share certificates of JAL, were to be dispatched to respondents Nos. 3 to 16 as their names appeared in the register of members of JIL as on March 30, 2004, being fixed as record date for the purpose. But respondents Nos. 3 to 16 could not be dispatched the shares of JAL as the respondent-company was informed by the petitioner vide his letter dated October 1, 2003, enclosing therewith a list of 5,600 shares of JIL alleged to have been purchased by him in 1996 and further alleged to have lost them during an earthquake in 2001. Though the plaintiff stated to have also enclosed a copy of the FIR, purchased the bill and delivery note nothing was enclosed with his said letter dated October 1, 2003. The present petition has been filed by the petitioner after a long delay of more than 7 (seven) years when the petitioner is alleged to have lost the related transfer deeds in the alleged earthquake (in 2001) as intimated by him to the answering respondent through his another letter dated December 1, 2003, thereby enclosing a copy of the shares lost complaint acknowledged by the Senior Police Inspector, Navrangpura P.S., Ahmedabad, hence it being barred by limitations merits dismissal on the ground of gross delay as prescribed under section 111A of the Companies Act, 1956. The petition merits dismissal on the ground as the answering respondent had never refused to register the transfer of 5,400 shares alleged to have been purchased by the petitioner, as no instrument of transfer as prescribed to the answering respondent in respect of the said shares. The petition merits dismissal on the ground as no "broker note" authenticating the alleged purchase of 5,600 shares by the petitioner was provided by him to the answering respondent though was required to do so through answering the respondent's letter dated March 24, 2004. The petition merits dismissal on the ground of limitation as no appropriate steps were taken by the petitioner for more than 3 years to obtain the necessary directions of the court of competent jurisdiction though having been so advised by respondent No. 1 through its letter dated July 19, 2004. The petition merits dismissal on the ground of limitation as it was for the first time that the petitioner vide his letter dated September 2, 2005, sent a photocopy of the delivery note dated June 25, 1996, issued by one Ibrahim Vahanvati (Share and Stock Broker), Rajkot in respect of the alleged purchase of 5,700 shares. It was contended that the petitioner is alleged to have purchased 5,600 shares in June 25, 1996 and the share transfer deeds in respect of these shares were allegedly lost in the earthquake in Ahmedabad. The petitioner neither filed the share certificates in original with the respondent-company nor he filed the transfer deeds lost in original. On being approach by the petitioner, respondent No. 1 company vide its letter dated July 19, 2004, advised the petitioner to approach the Company Law Board under section 111A of the Companies Act, 1956, whereas he has preferred this petition in February, 2008 under section 111.

5. Respondent No. 11's case is that the respondent was at the relevant time the registered shareholder of 412 shares in the erstwhile Jaiprakash Industries Ltd., under Folio No. 030936 including the 100 shares covered under certificate No. 255197 and certificate No. 255199 which is the subject-matter of this petition. The respondent is still an holder of the said 100 shares or equivalent shares in respondent No. 1 company. All the said shares were being held in physical form as the system of holding the shares in demat form was not introduced at that relevant time. At the time when the system of holding the shares in electronic form by way of dematerialisation was introduced, the respondent while wanting to materialise the shares, found all the said shares missing from his custody and accordingly by his letter dated November 12, 2002, informed the erstwhile Jaiprakash Industries Ltd. By its letter dated November 22, 2002, the details of his holding were informed by the company and he asked him to lodge FIR. Respondent No. 11 duly informed the local police station. At that time there were rampant cases of fraudulent transfer of shares. Taking of timely action such cases could be prevented. The Company Law Board's attention was drawn to instances of such attempted transfer involving shareholding of the respondent are enclosed and marked annexure R2. The present petition is another such attempt. Respondent No. 11 denied the claim of the petitioner. It was contended that he did not sell the shares covered under certificates Nos. 255197 and 255199 nor delivered any transfer deed signed by him covering the said shares. It was contended that adjudication of right of ownership of the petitioner cannot be decided under the summary jurisdiction of section 111 of the Act. It was contended that the cause of action, if any, arose on June 25, 1996, when the petitioner is alleged to have purchased the impugned shares and no law gives any protection to any one for indefinite period. Respondent No. 11 denied that the petitioner had purchased the shares owned by the respondent held under Certificates Nos. 255197 and 255199, he denied having sold the said shares and it was argued that the stock broker's delivery note is not sufficient evidence for establishing valid and legal ownership to any share.

6. I have considered the rival submissions and the case law cited by the parties. C.P. No. 8/111/08 CLB (NB) mentioned on April 8, 2008, is to be read as C.P. No. 8/111A/08 CLB (NB) as incorrect quoting of the section does not disentitle the petitioner from getting relief under the correct provision, which is deemed to have been attracted in this case in place of section 111 wrongly attracted, the respondent's preliminary objection in this regard is not tenable. It is noted that this matter had to proceed ex parte qua respondents Nos. 3 to 10 and respondents Nos. 12 to 16 as despite publication of the notice qua them in The Times of India newspaper dated January 2, 2009, by the petitioner and despite further several opportunities provided to present and argue their matter by the Company Law Board, respondents Nos. 3 to 10 and respondents Nos. 12 to 16 chose not to enter appearance and argue their matter.

7. The petitioner's reliance on the cases of Vijaya Finance Corporation Ltd. v. Peerless General Finance and Investment Co. Ltd. (2006) 129 Comp Cas 733, and other cases cited above to contend that the Limitation Act, 1963, does not apply to the proceedings under section 111A of the Act, is misplaced. The provisions of the Limitation Act, 1963, would apply. In a recent case (Mrs. Shobha Thampi V. Federal Bank Ltd. (2008) 142 Comp Cas 458 (Clb)) the applicability of the Limitation Act, 1963, in section 111/111A proceedings were examined and it was held that the Limitation Act, 1963, is applicable in proceedings under section 111/111A of the Act. In the present case the applicant has constantly pursued the matter of rectification in the manner as advised from time to time by respondent No. 1 company and even by the SEBI, Mumbai as is evident from his letter to the SEBI on July 19, 2004. There is no inaction or negligence in pursuing the matter. Sufficient reason having been shown in presenting the petitioner's case before the Company Law Board, this company petition cannot be thrown out at the threshold as barred by limitation. In fact, in respect of the lot of 5,600 shares the petitioner had succeeded in getting 200 shares already transferred in his name by getting the rectification done. As regards the remaining 5,400 shares in the absence of the requisite details of the registered shareholders who had allegedly transferred the shares, the matter was pursued from time to time. But despite proper service on respondents Nos. 3 to 10 and respondents Nos. 12 to 16 no response was received from the registered shareholders to resist the petitioner's claim.

8. The Company Law Board can go into the question whether the petitioner is entitled to have his name en

tered in, or omitted from, the register. The provisions of sub-section (7) of section 111 of the Act make it amply clear. The Company Law Board can examine if default has been committed by the company in entering their names in the register of members. It shall not be appropriate for the Company Law Board to entertain any objection for mere non-allotment of shares per se. But the Company Law Board can look into the case for rectification in case a person being entitled to the shares is denied entry in the register of members. 9. The respondents' contention that no instrument of transfer as prescribed under the Act was presented hence rectification could not be carried out, in view of the delivery note, the FIR, the purchase bill and the petitioner's unrefuted contention that the transfer deeds were lost in the disastrous earthquake, is held to be unjustified in the facts and circumstances of this case. It is noted that out of 5,600 shares, the petitioner succeeded in reaching out to the registered shareholders and could get 200 shares transferred. The remaining 5,400 are yet to be registered in the petitioner's name despite his repeated, constant and continuous pursuing of the matter in the manner advised. 10. In view of the foregoing, I find no justification for not allowing the prayer of the petitioner seeking rectification of the register of members by recording the petitioner's name in the place of respondents Nos. 3 to 16, in respect of the said 5,200 shares (however only 5,200 shares have been found to be correct by respondent No. 1 company instead of 5,400 shares) and allow the petitioner, the benefits accrued to the petitioner on those shares in the past. 11. Company Petition No. 8/111A/2008-CLB (NB) is disposed of in the above terms. No order as to costs.