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2004 (1) TMI 713 - Board - Companies Law
Issues:
Petition filed under Section 113 of the Companies Act, 1936 seeking directions for delivery of share certificates and launching prosecution against the Company. Detailed Analysis: Issue 1: Delivery of Share Certificates The petitioner invested in the Company and was allotted shares in 1996. Despite repeated demands, the Company failed to deliver the share certificates. The petitioner's Director did not acknowledge receiving the shares or pledge them to a third party as claimed by the Company. The Company did not provide proof of delivery, and the burden of proving delivery lies with the Company under Section 113. The absence of acknowledgment raises doubts about the delivery. The Company's failure to produce evidence of delivery led to the conclusion that the Company defaulted in delivering the share certificates. Issue 2: Company's Defense The Company contended that the shares were delivered to the petitioner and pledged to a third party for a loan. The Company relied on an affidavit and a letter as evidence of the pledge. The Company argued that the petitioner lost title to the shares upon pledging them, making the petition not maintainable. The Company suggested that disputes regarding the pledge required a civil suit rather than CLB intervention. However, the contradictions in the evidence presented by the Company raised doubts about the validity of the pledge and the delivery of shares. Judgment After considering the arguments and evidence, the CLB found that the Company failed to deliver the share certificates to the petitioner. The Company's claims lacked substantial evidence, and the contradictory statements regarding the pledge cast doubt on the Company's defense. The burden of proof lay with the Company, and its failure to provide conclusive evidence led to the decision that the Company defaulted in delivering the share certificates. The CLB directed the Company to deliver the share certificates within 21 days, resolving the petition in favor of the petitioner without costs.
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