2013 (5) TMI 1039 - Board - Companies Law

Summary

Issues involved:
The issue involved in the judgment is regarding the forfeiture of debentures by a company without notice to the petitioner, leading to a request for rectification of the register under section 111A of the Companies Act, 1956.

Details of the Judgment:

1. The petitioner filed two company petitions seeking rectification of the register under section 111A of the Companies Act, 1956, as the debentures in their name were forfeited by the respondent-company without notice. The jurisdiction to deal with this issue was determined to vest in the Company Law Board (CLB) under section 111, sub-section (4) of the Act.

2. The respondent-company forfeited the debentures of the petitioner due to non-payment, but the petitioner claimed to have received no prior notice. The debentures were supposed to be converted into shares, but instead, the company forfeited them and removed the petitioner's name from the register.

3. Section 111A empowers the tribunal to address issues requiring rectification of the register. The validity of the forfeiture needed to be determined before rectification could be made to the debentures' register.

4. The jurisdiction under sections 111 and 111A is limited to cases of refusal to register or rectify shares or debentures. The Tribunal's inherent jurisdiction cannot be expanded to cover issues of forfeiture or allotment. The civil court is competent to decide on the validity of forfeiture, as the CLB's jurisdiction is limited to transfer and transmission cases.

5. The civil court has overlapping jurisdiction with the CLB, and the issue of forfeiture falls within the former's purview. Since the matter is triable by the civil court, the petitioner was advised to approach the appropriate forum for resolution.

6. The petitions were disposed of, granting the petitioner liberty to seek redress in the civil court for the forfeiture issue. The CLB's jurisdiction was found to be limited to transfer and transmission cases, not issues of forfeiture.

Separate Judgment:
No separate judgment was delivered by the judges in this case.