2010 (11) TMI 849 - Board - Companies Law

Summary

Issues:
1. Direction to surrender duplicate share certificate and return original share certificates.
2. Compliance with section 108 of the Companies Act, 1956.
3. Allegations of fraudulent obtaining of duplicate share certificates.
4. Claim of time bar and lack of privity of contract.
5. Consideration of delay in approaching the court.

Analysis:
1. The petition sought directions under section 111A of the Companies Act, 1956, for the surrender of duplicate share certificates and the return of original share certificates duly transferred. The petitioner alleged that the respondent fraudulently obtained duplicate share certificates and misappropriated dividends. The petitioner claimed to have purchased 100 shares from the respondent through a valid transfer deed, but the respondent refused to transfer the shares citing the loss of original certificates.

2. The petitioner contended that the transfer of shares from the respondent to him was in compliance with section 108 of the Act. However, the respondent argued that the petition was time-barred, as the petitioner approached the court after a significant delay of 17 years without providing a satisfactory explanation for the delay. The respondent also denied any privity of contract with the petitioner regarding the shares in question.

3. The respondent claimed that they followed the necessary procedures to obtain duplicate share certificates after the original certificates were allegedly lost by the registered holder. They further stated that they dematerialized and sold the duplicate shares. The respondent emphasized that if the petitioner had any grievances, he should address them with the broker from whom he claimed to have purchased the shares.

4. The Company Law Board noted the absence of representation from the respondents during the hearing. The Board highlighted the significant delay of almost 16 years in approaching the court, which was not adequately explained by the petitioner. The Board concluded that such a delay amounted to wilful delay and latches, leading to the dismissal of the petition on the grounds of delay and latches, without imposing any costs.

In conclusion, the Company Law Board dismissed the petition due to the petitioner's failure to provide a satisfactory explanation for the significant delay in approaching the court, considering it as wilful delay and latches. The Board emphasized the importance of timely legal actions and declined to condone the delay, ultimately leading to the dismissal of the petition without any costs imposed on either party.