2007 (8) TMI 776 - Board - Companies Law

Summary

Issues Involved:
1. Rectification of the register of members of TWEL, TPPL, and TRTCL.
2. Payment of dividends and other accretions.
3. Interpretation of the Will of (late) S. Sivaramakrishna Aiyer.
4. Jurisdiction and applicability of Sections 111 and 111A of the Companies Act, 1956.
5. Limitation period and applicability of the Limitation Act, 1963.

Detailed Analysis:

1. Rectification of the Register of Members of TWEL, TPPL, and TRTCL:
The petitioners sought rectification of the register of members for the shares held by (late) S. Sivaramakrishna Aiyer in TWEL, TPPL, and TRTCL. The Company Law Board (CLB) concluded that the boards of TPPL and TRTCL had not properly interpreted the Will of (late) S. Sivaramakrishna Aiyer before approving the transmission of shares. The CLB found that the boards had not deliberated on the number of shares held at the time of the Will's execution, shares acquired thereafter, and shares held at the time of death. Consequently, the CLB ordered TPPL and TRTCL to rectify their registers by restoring the name of (late) S. Sivaramakrishna Aiyer.

2. Payment of Dividends and Other Accretions:
The CLB directed the second respondent to restore dividends received in respect of 39,388 equity shares of TPPL and respondents 3 to 6 to restore dividends received in respect of 70,902 equity shares of TRTCL. The dividends were to be restored to TPPL and TRTCL, respectively.

3. Interpretation of the Will of (late) S. Sivaramakrishna Aiyer:
The CLB noted that the disputes among the legal heirs regarding the interpretation of the Will, particularly Clauses 10 and 26, were significant. The CLB highlighted that the terms "my shares" and "acquire" were contentious. However, the CLB concluded that it did not have the jurisdiction to interpret the Will, citing Section 75 of the Indian Succession Act, 1925, which states that such matters should be determined by a competent civil court. The CLB emphasized that the interpretation of the Will involved complicated questions of law and fact that were beyond its summary jurisdiction.

4. Jurisdiction and Applicability of Sections 111 and 111A of the Companies Act, 1956:
The CLB addressed the argument that Sections 111 and 111A should be read in conjunction. The CLB referred to the judgment in Finolex Industries Limited v. Anil Ramchand Chhabria, which held that the remedies of appeal and rectification are available to all kinds of shares held in a public company under the proviso to Section 111A(2) and 111A(3) read with Sub-section (7) of Section 111A. The CLB concluded that it had the jurisdiction to entertain the petitions under Section 111A for rectification of the register of members.

5. Limitation Period and Applicability of the Limitation Act, 1963:
The CLB considered whether the petitions were barred by limitation. The CLB referred to the judgment of the Kerala High Court in Duroflex Ltd. v. Johnny Mathew, which upheld the CLB's power to condone delays under Section 5 of the Limitation Act. The CLB found that the petitioners had shown sufficient cause for the delay, as they were engaged in resolving the disputes before approaching the CLB. Consequently, the CLB condoned the delay and held that the petitions were not barred by limitation.

Conclusion:
The CLB ordered TPPL and TRTCL to rectify their registers by restoring the name of (late) S. Sivaramakrishna Aiyer and directed the respondents to restore dividends received. The CLB dismissed the petition regarding TWEL as there was no cause of action. The CLB emphasized that the legal heirs should seek the intervention of a competent civil court to adjudicate their rights over the shares in question. All interim orders were vacated, and no costs were awarded.