2017 (8) TMI 1654 - AT - Companies Law

Rectification of the Register of Members of Appellant company - Seeking recording of shares in question in the name of the Respondent Mrs. Adesh Kaur - HELD THAT - The Appellant while acknowledged that the 1st Respondent/Petitioner may be a victim of fraud, the Tribunal noticed that certain procedure were not followed and that duplicate transfer shares had already been issued and transferred and dematerialised in favour of the 8th Respondent - Mr. Vikas Tara Singh. Thus, there being an allegation of impersonation and forgery of signature and fraud lodged already levelled by the 1st Respondent/Petitioner in respect of which a criminal complaint has been lodged and is pending with the Economic Offences Wing Cell of Mumbai Police. The matter has also been brought to the notice of SEBI, in the light of the decision of the Hon'ble Supreme Court in AMMONIA SUPPLIES CORPN. (P.) LTD. VERSUS MODERN PLASTIC CONTAINERS (P.) LTD. 1998 (9) TMI 427 - SUPREME COURT it was not a fit case for Tribunal to exercise its power under Section 59 of the Companies Act, 2013 solely on the ground that the original certificates are in the physical possession of the 1st Respondent/Petitioner. This order will not come in the way of the 1st Respondent/petitioner to move before a Court of Competent Jurisdiction for appropriate relief, including declaration of title over the shares in question and/or for declaration that the transfer in favour of the 2nd Respondent or the 8th Respondent are illegal, being based on impersonation and fraud - petition dismissed.

Summary

Issues:
Rectification of Register of Members under Section 59 of the Companies Act, 2013.

Detailed Analysis:

1. The Appellant filed appeals to set aside the order passed by the National Company Law Tribunal regarding the rectification of the Register of Members in favor of the Respondent, Mrs. Adesh Kaur, for 903 equity shares. The Tribunal ordered the shares to be recorded in her name along with all related entitlements.

2. The Company Petition was filed by Mrs. Adesh Kaur under Section 59 of the Companies Act, 2013 seeking rectification of the Register of Members to reflect her ownership of the shares and to claim her entitlements such as dividends, bonus shares, etc.

3. The Tribunal held in favor of the Respondent, directing the rectification of the Register of Shareholders to reflect Mrs. Adesh Kaur as the rightful owner of the 903 shares, which were detailed in the order along with directions for the necessary steps to be taken.

4. The Appellant argued that the petition was not maintainable as per the Supreme Court's decision in a previous case, emphasizing the need to verify disputed documents and alleged forgeries to determine rectification eligibility under the law.

5. The Appellant raised disputes regarding the ownership of the shares, alleging fraud, impersonation, and fabrication of documents. They highlighted the transfer of shares to another party and the subsequent dematerialization process.

6. The Tribunal considered the submissions from both parties, acknowledging the fraud allegations and the involvement of SEBI in verifying such matters. The Tribunal noted the acknowledgment of fraud by the Appellant but found certain procedures not followed in the case.

7. Due to the allegations of impersonation, forgery, and pending criminal complaints, the Tribunal concluded that it was not appropriate to exercise power under Section 59 solely based on physical possession of share certificates by the Respondent.

8. Consequently, the Tribunal set aside the judgment and dismissed the Company Petition, allowing the Respondent to seek appropriate relief in a Court of Competent Jurisdiction for further actions regarding the ownership and legality of the share transfers based on impersonation and fraud.

This detailed analysis covers the issues involved in the legal judgment, providing a comprehensive understanding of the Tribunal's decision and the arguments presented by both parties.