2006 (8) TMI 673 - Board - Companies Law

Summary

Issues:
Petition under section 111A of the Companies Act, 1956 seeking declaration as legal and beneficial owner of 100 shares of a company, refusal of company to register transfer due to signature mismatch and expired validity period of transfer deed, lack of response from transferor, and direction for registration of shares.

Analysis:
In the petition filed under section 111A of the Companies Act, 1956, the petitioner sought a declaration as the legal and beneficial owner of 100 shares of a company and requested the company to register the shares in their name. The petitioner had purchased the 100 shares along with 19,900 other shares in October 1998 through a stockbroker. However, the company declined the transfer request for the 100 shares citing a mismatch of signature and an expired validity period of the transfer deed. Despite repeated requests to the transferor to execute a fresh transfer deed, no response was received, leading to the filing of the petition for relief.

The respondent company, in its reply, explained that the 100 shares in question were part of 1,400 shares reported lost by the transferor in 1997. Due to a signature mismatch and an expired transfer deed, the company refused to register the transfer of the 100 shares. The company also highlighted that no benefits had been sent to the transferor since the shares were lodged for transfer. The transferor, despite receiving notices, did not respond or appear at the hearings, indicating a lack of interest in the matter.

Given the established purchase of the 100 shares by the petitioner and the lack of response from the transferor, the main issue for consideration was whether the company should be directed to register the transfer. The absence of any objection or response from the transferor led to the direction for the company to register the shares in favor of the petitioner. However, a two-month notice period was mandated for the transferor to produce a restraint order from a competent court if they objected to the registration. If no response was received within the specified period, the company was instructed to register the shares in the petitioner's name and release all withheld benefits like dividends and bonus shares.

In conclusion, the petition was disposed of with the above directions, and no costs were awarded. The judgment emphasized the importance of established purchase documentation, lack of response from the transferor, and the company's obligation to register the shares in the absence of objections within the specified timeframe.