w w w . L a w y e r S e r v i c e s . i n



In the matter of: Dhani Ram Sharma v/s Pushpa Duneja & Another

    Co. Appeal No. 32/58-59/NCLT/AHM of 2017

    Decided On, 24 June 2019

    At, National Company Law Tribunal Ahmedabad

    By, THE HONOURABLE MR. HARIHAR PRAKASH CHATURVEDI
    By, JUDICIAL MEMBER & THE HONOURABLE MS. MANORAMA KUMARI
    By, JUDICIAL MEMBER

    For the Petitioner: PCS Dhiraj Kumar Jha, Advocte. For the Respondents: R1, Dalip Mishra, Advocate.



Judgment Text

Manorama Kumari, Member (Judicial)

The instant application is filed under section 58 and 59 of the Companies Act, 2013 with a prayer:

"Respondent No. 2 be directed that new shares of Rs. 2/-, issued upon stock split against 400 equity shares of face value of Rs. 10/- with Bonus Shares i.e. 6000 equity shares of Rs. 2/- each fully paid up along with all the benefits i.e. Rights Shares, Bonus Shares and Dividend or any other benefits lying with Respondent No. 2, shall be released and transferred thereof in favour of the Petitioner from the name of Respondent N 1 and Register of Members of the company shall be rectified accordingly."

2. The learned PCS for Petitioner submitted that in the year 1989, the Petitioner had purchased 400 equity shares of the Respondent No. 2 Company i.e. Ambuja Cement Ltd. (formerly known as Gujarat Ambuja Cements Ltd.) for Rs. 19,707/- from the Respondent No. 1 (Joint Holder) having face value of Rs. 10/- bearing Folio No. NR03479, Distinctive No. 10538701-10539100 and Certificates No. 30888-30891 through the UP Stock Exchange. The sale consideration price was paid by the Petitioner by way of Cheque No. 871105 payable at Indian Overseas Bank, which said amount was credited in the NRO Account of Respondent No. 1 and the share transfer deed was duly executed. The copy of the sale bill/contract note and the payment memo is Annexed as Annexure A-l.

3. It is submitted by the learned PCS appearing on behalf of the Petitioner that the signature of the Respondent No. 1 jointly with the first holder on the original transfer deed differed from her specimen signature from the records of the Respondent No. 2 Company. Therefore, the Petitioner returned the original transfer deed to Respondent No. 1 and in the year 1991 obtained another transfer deed from Respondent No. 1.

4. It is submitted that the aforesaid transfer was to be affected through the Transfer Agent of Respondent No. 2 Company i.e. Epic/Share pro Services (India) Pvt. Ltd. The Petitioner sent the original share certificates and the transfer deed to the Transfer Agents of Respondent No. 2 Company. However, the Transfer Agents of Respondent No. 2 Company showed its inability to register the shares in the name of the Petitioner as the signature of Respondent No. 1 did not match with that of her specimen signature in the records of the Respondent No. 2 Company.

5. The learned PCS of the Petitioner submitted that the Petitioner again on 27.12.1994 sent a letter to Respondent No. 1 with a request for executing the fresh transfer deed duly signed by her. A copy of the said letter dated 27.12.1994 is marked as Annexure A-3.

6.

Please Login To View The Full Judgment!

It is stated that in the meanwhile, on 06.1.1995 the Transfer Agents of Respondent No. 2 Company replied that although the permission was granted by the Bombay Stock Exchange vide letter dated 28.07.1989 and the signature was attested by the Notary Public, the transfer would stand rejected until the signature of Respondent No. 1 gets matched with her specimen signature in the records of the Respondent No. 2 Company. The letter dated 06.01.1995 received from the Respondent No. 2 Company is annexed as Annexure A-4. In view of the above, the Petitioner made a complaint to BSE against the Respondent No. 2 Company and its Transfer Agents for not registering the transfer of shares in favour of the Petitioner and his wife.

7. It is submitted that the BSE on 26.06.1995 directed the Respondent No. 2 Company to dispatch the share certificate as per clause 3(c) of the listing agreement and also asked the Respondent No. 2 Company to clarify the position to the Petitioner. The said letter is annexed as Annexure A-6.

8. It is further submitted that the Transfer Agents of Respondent No. 2 Company, on 17.07.1995 sent an objection memo to the Petitioner showing their inability to transfer the shares and returned the transfer deed along with the share certificate to the Petitioner for rectification, giving the reason that the signature of the Respondent No. 1 is not matching and necessary permission was also not there. The letter dated 17.07.1995 of Transfer Agents of Respondent No. 2 Company is annexed as Annexure A-7.

9. It is further submitted by the learned PCS of the Petitioner that on 23.02.1996, the Petitioner sent a letter to the Company Secretary of Respondent No. 2 Company enclosing therewith, the original share certificate, share transfer deed, copy of the bill, payment memo and requested for the transfer of shares in his name. The said letter dated 23.02.1996 is annexed as Annexure A-8. Meanwhile, the Petitioner also wrote a letter to Transfer Agents of the Respondent No. 2 Company for non-receipt of Bonus Shares issued in 1995 in the ratio of 1:1. In reply thereof, the Transfer Agents of Respondent No. 2 Company asked the Petitioner vide its letter dated 03.04.1996 to approach the Respondent No. 1 for obtaining the outstanding dues including bonus shares. The Transfer Agent on 08.04.1996 provided the particulars of the person to whom the bonus shares were dispatched and asked the Petitioner to contact the Respondent No. 1 and 2 to obtain the bonus shares. The said letters dated 03.04.1996 and 08.04.1996 are annexed and marked as Annexure A-9 and A-10 respectively. Meanwhile, the Petitioner made various communications with the Transfer Agents of Respondent No.2 Company but of no avail.

10. It is stated that on finding no alternative, the Petitioner issued a legal notice to the Respondent No. 2 Company requiring Respondent No. 2 Company to transfer the shares along with the Bonus Shares and Right Shares within 7 days and simultaneously filed a civil suit being OS No. 6 of 2000 before the Hon'ble Civil Court, Delhi against the Respondent No. 1 and the Respondent No. 2 Company and the Transfer Agents of Respondent No.2 Company. The copy of the same is annexed with the appeal as Annexure A-12.

11. In the written statement submitted by the Respondent No. 2 Company in the above mentioned Suit OS No. 6 of 2000, it is stated that since the signature of Respondent No. 1 is not matching with her specimen signature in the records of Respondent No. 2 Company, as such transfer could not be affected. It is also stated in the said written statement that since 01.10.1997 M/s Share pro services is the Transfer Agents of Respondent No. 2 Company. In the written statement, the Respondent No. 2 Company also admitted that 2 bonus issues in the year 1994 and 1999 are affected, both in the ratio of 1:1 taking the total number of shares to 1600 and all the benefits were sent to the Respondent No. 1. The written statement so filed by the Respondent No. 2 is annexed along with the appeal as Annexure A-13. The Hon'ble Civil Court, Delhi vide its order dated 15.04.2004 dismissed the said suit OS No. 6 of 20001 later on renumbered as Suit No.684 of 2002 on the ground that Civil Court has no jurisdiction over the subject matter of the dispute. The said order is annexed as Annexure A-14.

12. The learned PCS submitted that in the meanwhile the Petitioner again wrote a letter on 18.01.2004 requesting the Respondent No. 1 to provide the duly signed transfer deed along with the copies of passport and also addressed letter to the Transfer Agents of Respondent No. 2 Company providing the complete details of the shares. The Transfer Agent in reply dated 09.11.2004 gave the details of the bonus shares issued in the year 1994 in the ratio of 1:1 and in the year 1999 in the ratio of 1:1. The copy of the said letter is annexed as Annexure A-17.

13. It is further submitted that on 22.01.2009 due to outburst of the main water line of Delhi Jai Board, the Petitioner's office was flooded with more than 8 feet of water which caused damage to various documents including share certificate of Respondent No. 2 Company. To that effect, the Petitioner filed an FIR before the Police Station, Shakarpur, Delhi on 22.01.2009. Meanwhile, the Transfer Agents of Respondent No. 2 Company also replied vide its letter dated 10.09.2010 that in the year 2005, the face value of the shares was subdivided from Rs. 10 each to Rs. 2 each and the subject share of Rs. 10 face value, had been sold again in open market. The copy of the said letter dated 10.09.2010 is annexed as Annexure A-23.

14. It is stated that during the period from 12.03.2012 to 26.12.2012, various correspondences were exchanged between the Petitioner and the Transfer Agents of Respondent NO. 2 Company with regard to the shares and bonus shares etc. but with no result. The said correspondence made by the Petitioner are annexed with the appeal.

15. It is submitted that on 09.01.2013 the Petitioner filed Co. Appeal No. 17/58,59/CLB/MB/2014, later on renumbered as TP No. 63/58,59/NCLT/AHM/2016, Company Appeal No. 16/58,59 under section 111(A) of the Companies Act, 1956 corresponding to section 59 of the Companies Act, 2013 for directions to the Respondent No. 1 to transfer 400 equity shares of face value of Rs. 10 each of the Respondent No. 2 Company along with all the benefits and register the same in the name of the Petitioner in the Register of Members of the Respondent No. 2 Company. After the notification of the Companies Act 2013, the case was transferred from Company Law Board to National Company Law Tribunal, Ahmedabad Bench. A copy of the TP No. 63/58,59/NCLT/AHM/2016, Co. Appeal No. 16/58,59, filed by the Petitioner in NCLT Ahmedabad is annexed as Annexure A-28. Ahmedabad Bench vide its impugned judgment and order dated 15.03.2017 dismissed the TP No. 63/58,59/ NCLT/AHM/2016 Company Appeal No. 16/58,59, filed by the Petitioner. While dismissing the appeal, this Bench observed that the grievances of the Petitioner were covered under section 58 of the Companies' Act, 2013 which correspondence to section 111 of the Companies Act, 2013 and therefore, the petition filed by the Petitioner was not within time as contemplated in the said section and was barred. The copy of the said order is annexed as Annexure A-30.

16. Being aggrieved by the order so passed by the NCLT, Ahmedabad, the Petitioner approached the NCLAT. The Hon'ble NCLAT upheld the order of the NCLT Ahmedabad Bench vide its order dated 14.07.2017 passed in Company Appeal (AT) No. 188/2017. The copy of the said order is annexed as Annexure A-31.

17. Being aggrieved by the said order passed by the NCLT, Ahmedabad, while the Petitioner was preparing to approach the Hon'ble Supreme Court to file an appeal, simultaneously, the Petitioner also approached Respondent No. 1/Second holder of the impugned shares, namely Mrs. Pushpa Duneja, W/o First holder. Mrs. Pushpa Duneja informed the Petitioner that First shareholder expired on 14.04.2009. She also admitted the fact that the shares in question were sold by her husband long back and also admitted her signature on transfer deed as well as identified the signature of her husband. She further provided the fresh transfer deed for the new shares, issued upon stock split and bonus share thereof, without filing the details of new shares, as the details of new shares were not provided either to the Petitioner or to the Respondent No. 1 by the Respondent No. 2 Company, the Respondent No. 1 further issued no objection for release of shares along with all the benefits thereof, which were kept in abeyance by the Respondent No. 2 Company in favour of the Petitioner, in favour of the Petitioner. Mrs. Pushpa Duneja, the Respondent No. 1 handed over to the Petitioner, Death certificate of Second holder, the deceased husband of the First holder, self-attested copy of her PAN Card, copy of the electricity bill in the name of her husband being address proof as the electricity connection still continued in the name of her deceased husband. The said documents are annexed with the Petition and marked as Annexure A-32 collectively.

18. It is stated that on receipt of the fresh transfer deed and acknowledgement and no objection from Respondent No. 1, the Petitioner wrote a letter to the Respondent No. 2 Company on 31.08.2017 apprising the fact of receipt of NOC and fresh transfer deed and accordingly, the Petitioner, sent all the records to the Respondent No. 2 Company on 01.09.2017. The Petitioner, further tried to confirm over phone and by way of an E-mail requesting the Respondent No. 2 Company to confirm the receipt of those documents. The Respondent No. 2 Company replied that they have not received the documents till 05.09.2017 and even if they receive those documents, they will not be in a position to transfer the shares in the absence of court orders. The said communication between the Petitioner and the Respondent No. 2 Company is annexed as Annexure A- 35.

19. It is further stated that the Petitioner who purchased 400 equity shares on Rs. 10 each of the Respondent No.2 Company viz. M/s Ambuja Cement Ltd. for a lawful consideration, is the rightful and beneficial owner of the above said shares and all the other related benefits i.e. Right Shares, Bonus Shares as well as dividend provided by the Respondent No.2 Company on these shares, as the same right is given by the Companies Act, 2013 under section 126(erstwhile section 206(A) of the Companies Act, 1956) and also provided by SEBI in its circular No. SMDRP/POLICY/CIR-46/2001 dated September 27, 2001. In view of the said circular, the Petitioner is entitled to all the benefits which were given by the Respondent No. 2 Company to their shareholders, on the above mentioned impugned shares.

20. It is stated that Petitioner right from the beginning, tried to resolve the matter but all in vain. Finding no alternative, the Petitioner approached this Bench for redressal of his grievances after obtaining the fresh share transfer deed in respect of bonus shares issued by the Respondent No. 2 Company.

21. Heard the Petitioner at length and Respondent No. 1.

22. On perusal of the records, it is found that the Respondent No. 2 Company appeared before this Tribunal on 17.01.2018 and on filing Vakalatnama by their counsel, two weeks' time was allowed to the Respondent No. 2 Company to file their reply. Since, Respondent No. 2 Company failed to file their reply, though sufficient time and opportunity was granted to the Respondent No. 2 Company, the right to file reply closed on 29.10.2018. The Respondent No. 1 (the Transferor, the Second holder) filed reply on 14.03.2018. On perusal of the reply, it is found that Respondent No. 1 has no objection and she has categorically made a prayer to grant relief as sought for by the Petitioner/Appellant and pass/grant any other order/reliefs as this Tribunal deem just and proper in the facts and circumstances of the case.

23. It is admitted fact that Petitioner has purchased 400 shares of Gujarat Ambuja Cement Ltd. now Ambuja Cement Ltd. Respondent No. 2 Company from Respondent No. 1 (joint holder with her deceased husband) having face value of Rs. 10/- bearing Folio No. NR03479, Distinctive No. 10538701-10539100 through Transfer Agents of Respondent No. 2 Company, registered in the name of Roshan Lai Duneja and Pushpa Duneja (Respondent No. 1). The Petitioner paid full consideration amount to the Respondent No. 1 and her husband (now deceased). It is/was duty of the Transfer Agents of the Respondent No. 2 Company to transfer the shares of Respondent No. 1 being joint holder with her husband, in favour of the Petitioner. To that effect, the Petitioner has submitted all the necessary documents such as transfer deed etc. However, the Transfer Agents of Respondent No. 2 Company informed the Petitioner that they are unable to transfer those shares due to difference in specimen signatures of the Respondent No. 1. Then, the Petitioner obtained fresh transfer deed and again sent for registration of his name but the same was again refused on the same ground, that signature of Respondent No. 1 differs with the specimen signatures of Respondent No. 1 in the records of the Respondent No. 2 Company.

24. The Petitioner being beneficial owner, by way of purchase of 400 shares from Respondent No. 1, the Petitioner sent a legal notice to the Transferor Agents of Respondent No. 2 Company, but no action was taken by the Respondent No. 2 Company on one pretext or the other, causing delay for no fault of the Petitioner /Appellant.

25. Finding no alternative, the Petitioner/Appellant filed a Civil Suit before the Court of SH. Pulastaya Pramachala, Civil Judge, Delhi but the suit was dismissed on 15.04.2014 on the ground of jurisdiction as provided in section 10GB of the Companies Act, 1956. Section 10 GB of the Act provides that:

"No Civil Court shall have jurisdiction to entertain any suit or proceeding, in respect of any matter, which the tribunal or the appellate tribunal is empowered to determine by or under this Act or other law for the time being in force and no injunction shall be granted by any Court or other authority in respect of any action taken or to be taken in pursuance of any power conferred by or under this Act or any other law for the time being in force"

In view of such provisions of law, it is very much clear that jurisdiction of Civil Court is barred in such matters. Even my aforesaid observation is supported by ruling of Hon'ble Supreme Court in M/s. Ammonia Supplies Corporation (P) Ltd. v. Modern Plastic Containers P. Ltd. and others AIR 1998 Supreme Court 3153

Wherein it is observed that:

"exercising power of rectification can be done by a company court and it has exclusive jurisdiction to try the same."

26. It is also a matter of record that the Petitioner made several correspondences with the Transfer Agents of Respondent No. 2 Company as well as with the Respondent No.2 Company. When the Petitioner failed in his efforts, the Petitioner filed an appeal before the Company Law Board Regional Bench, Mumbai. The Company Law Board, Mumbai subsequently transferred the said case to National Company Law Tribunal, Ahmedabad on its inception in the year 2016 being numbered as T.P. No. 63/58,59/NCLT/AHM/2016 Company Appeal No. 16/58,59/NCLT/AHM/2014.

27. The said appeal was being heard and dismissed on 15.03.2017 by NCLT, Ahmedabad Bench holding that grievance of the appellant covered under Section 58 of the New Act/ 111 of Old Act, is not within the time contemplated in the section which reads as under:

section 58(4) of the Companies Act, 2013 say that if a Public Company refuses to register of transfer of shares without sufficient cause within a period of 30 days from the date on which the instrument of transfer was delivered to the company, the transferee shall file appeal within a period of 60 days from the date of refusal or within 90 days where no intimation has been received from the company.

28. It is a matter of record that the Civil Suit was dismissed, on the ground of jurisdiction and the appeal was dismissed by this Bench on the ground of limitation. Both the proceedings are dismissed for want of legal impediment(s) but not on the basis of merits. Hence, it cannot be said that right of the Petitioner is extinguished.

29. It is also a matter of record that there is/are no adversary(ies) claim(s) in respect of the impugned shares. The only issue involved is the mismatch of specimen signature of the transferor i.e. Respondent No. 1 and to that effect, various correspondence are/were made for several years with the Transfer Agents of the Respondent No. 2 Company as well as with the Second holder of the shares and the Respondent No. 2 Company, which caused the delay. It is also admitted by the Respondent No. 2 Company in their written statement dated 26.03.2002 filed in civil suit in OS No. 6/2000 that share transfer was not affected due to the signature of Respondent No. 1 not matching up with the specimen signature of Respondent No. 1, in the records of Respondent No. 2 Company and also admitted the fact that Respondent No. 2 Company has made two bonus issues in the year 1994 and 1999 both in the ratio of 1:1 taking the total number of shares to 1600 and all the benefits on the impugned shares were sent to the Respondents No. 1, the Second holder of the shares.

30. Further, Respondent No. 2 Company also admitted vide its affidavit in reply dated 10.02.2015 before Company Law Board, Mumbai that it had kept in abeyance, the Bonus Shares issued in the year 2000, issue of new share certificate on sub-division and the Bonus Shares issued in the year 2005. Thus, the Respondent No. 2 Company did not oppose the relief(s) claimed by the Petitioner. The only issue, time and again raised by the Respondent No. 2 Company is/was to procure the court order for rectification of the Register of Members of the Respondent No. 2 Company.

31. It is a fact that on transfer of the shares in the year 1989, Register of Members of the Respondent No. 2 Company was not rectified for the reason as stated above. However, the Respondent No. 2 Company had not stopped the benefits which have gone in favour of the original shareholders though she has long back transferred the shares in favour of the Petitioner as she remained the shareholder in the Register of Members of the Respondent No. 2 Company. Since, the transfer of the shares was not effected in the name of the Petitioner, all the benefits, Bonus Shares and Right Shares, arising out of original 400 shares were either given or reserved to/for the original shareholders i.e. Mr. Roshanlal Duneja, the First shareholder and Mrs. Pushpa Duneja, the Second holder i.e. Respondent No. 1 due to non-rectification of the Register of Members of the Respondent No. 2 Company. Under such circumstances, when 400 shares are not yet transferred in respect of which, share transfer deed is executed and Bonus Shares and other benefits which are allotted to Respondent No.1, it becomes obligatory on the part of the Petitioner/Transferee to have share transfer deed executed from the original holder in his favour for the Bonus Shares etc. For the said purpose, the Petitioner obtained the share transfer deed for new shares, issued upon stock split and bonus shares thereof, details of which could not be filed as the same were not provided to the Respondent No. 1, however, the transfer deed contains the registered Folio No. i.e. NR03479. The Petitioner also obtained death certificate, PAN Number of the Second holder of the Second holder and no objection by way of affidavit dated 30.08.2017 from Respondent No. 1, thus the fresh cause of action arose on 30.08.2017.

32. On obtaining the transfer deed for new shares issued by way of Bonus Shares etc, issued upon stock split and bonus shares, along with no objection and other relevant papers, the Petitioner sent all the documents to the Respondent No. 2 Company by speed post on 01.09.2017. On enquiry, the Respondent No. 2 Company said that, even if, they receive all the papers, they will not be able to transfer the shares in the absence of court orders and also reiterated and demanded court orders in addition to documents supplied. Under such situation, the Petitioner filed the instant application within the statutory period, on getting fresh lease of life. As such, we find no embargo in allowing the application as the fresh transfer deed is executed in continuation of fresh bonus shares allotted to the original shareholder.

33. Further, the application/appeal is maintainable, as there is no dispute of title of the impugned shares or any complicated question of law warranting the initiation of regular suit or investigation. There was no inaction or negligence on the part of the Petitioner, rather the Petitioner ran from pillar to post for rectification of the Register of Members of the Respondent No. 2 Company. On perusal of the records, it is found that company is rejecting for the rectification of the Register of Members for mismatch of signatures of the Respondent No. 1 with that of her specimen signatures maintained in the records of the Respondent No. 2 company. Admittedly, therefore, there is no dispute of title nor there is/are any fraud, forgery, misrepresentation and manipulation.

34. The grievances of the Petitioner are covered under section 58 and 59 of the Companies Act, 2013 corresponding to Section 111 and 111 -A of the Companies Act, 1956. The powers conferred under Section 58 are very wide, and the law seems to be well settled that the remedy provided by Section 58 is summary in nature. It can be invoked in non-controversial matters, requiring quick decision(s). This section is not meant to be used for deciding disputes requiring investigation. In the case of a dispute of complicated nature involving controversy under several heads and necessitating a regular investigation, this section ought not to be allowed and used and the party concerned should be directed to proceed by way of a regular suit. However, in the instant matter, as such, there is no dispute, rather original shareholder i.e. Respondent No. 1 have executed the fresh share transfer deed in respect of Bonus Shares allotted to her as the original shares existed in her name. Respondent No. 1 has appeared in the case and has also filed her no objection by way of an affidavit and she has admitted that she has received the total share amount / value.

35. Further, the Respondent No. 2 Company even after receipt of the notice, did not file any reply or affidavit in the form of rebuttal or objection. Based on the above discussions, we have come to the conclusion that grounds stated by the Petitioner are genuine though, as a matter of record, it is a bonafide claim of the Petitioner. It is established fact that the Respondent No. 2 company has rejected the prayer for transfer of shares without any sufficient cause. Therefore, the petition succeeds with the following order:

a. Company Petition is allowed.

b. Respondent No. 2 company is directed that new shares of Rs. 2/- issued upon stock split against 400 equity shares of face value of Rs. 10/- with bonus shares i.e. 6000 equity shares of Rs. 2/- each fully paid up along with all the "benefits" i.e. Rights Shares, Bonus Shares and dividend or any other benefits, lying with Respondent No. 2 Company shall be released and transferred in favour of the Petitioner from the name of Respondent No. 1 and Register of Members of the Respondent No. 2 company shall be rectified accordingly.

c. Issue share certificate to the Petitioner within 60 days of the receipt of this order.

d. The Petitioner shall furnish the indemnity in respect of the said shares to the Respondent No. 2 company, if demanded.

e. No order as to cost.

f. Interim order, if any, stands merged with the final order. CA/IA, if any, stands disposed of. Copy of the order be issued to the parties
OR

Already A Member?

Also