2016 (10) TMI 370 - HC - Companies Law

Ownership of lost / transferred share - Reference to the appellant to obtain the order from the Competent Court - Held that - In the instant case, the transferors, the original owners of the shares have not at all come forward to challenge the ownership of the appellant over these shares. They have also not approached the Registrar of respondent company to stake their ownership over the said shares. In such a situation, there does not appear to be any dispute of ownership of the appellant over those shares. Hence, even otherwise also the issue relating to declaration of ownership, as sought by the appellant is again of merely of an academic nature and academic interest, if no one is coming forward to dispute the same. In such situation, one really fails to understand as to why respondent No.1 company is contesting the limited relief made by the appellant, of giving liberty to the appellant to approach the Registrar. Needless to state that before issuance of duplicate certificate to the appellant, the Registrar is bound to make requisite inquiry under the provisions of Section 84(4) of the Companies Act and he is not precluded in any way from considering the title of the appellant over the said shares. As stated above, the Registrar can even investigate the matter in accordance with rules and collect the evidence. Once, it is held that, the Registrar has to issue the duplicate share certificates after necessary inquiry, it follows that the inquiry will not be limited but it will cover even the aspect of ownership and title of the appellant over the said shares. In the light of the discussion above, as find that this is a fit case where the appeal needs to be disposed of, by setting aside the impugned Judgment and order passed by the Trial Court and grant the liberty to the appellant to make an application before the current RTA of respondent No.1-Company, Karvy Computershare Pvt. Ltd. for issuance of duplicate share certificates.

Summary

Issues Involved:
1. Jurisdiction of the Civil Court
2. Declaration of ownership of shares
3. Issuance of duplicate share certificates

Issue-wise Detailed Analysis:

1. Jurisdiction of the Civil Court:
The primary issue was whether the Civil Court had jurisdiction to entertain the suit concerning the issuance of duplicate share certificates. The appellant sought relief for the declaration of ownership and an injunction to prevent the transfer of shares that were lost in transit. The respondents contended that the Civil Court lacked jurisdiction, citing Section 84 of the Companies Act, which vests the authority to issue duplicate share certificates with the Registrar of Companies. The Trial Court agreed, referencing the Supreme Court's judgment in Shripal Jain Vs. Torrent Pharmaceuticals Ltd., which held that the Registrar should handle such matters. The High Court concurred, emphasizing that the Registrar has the jurisdiction to issue duplicate certificates after necessary inquiry under Section 84(4) of the Companies Act.

2. Declaration of Ownership of Shares:
The appellant also sought a declaration of ownership over the lost shares. The Trial Court, despite acknowledging its lack of jurisdiction over the primary issue, proceeded to decide on the ownership and found against the appellant. The High Court noted that the Trial Court should not have delved into the ownership issue once it determined it lacked jurisdiction. The High Court emphasized that the Registrar, empowered to issue duplicate certificates, also has the authority to investigate and determine the ownership of shares.

3. Issuance of Duplicate Share Certificates:
The appellant's main relief sought was the issuance of duplicate share certificates for the shares lost in transit. The Trial Court, relying on the Supreme Court's decision in Shripal Jain, held that only the Registrar could issue such certificates. The High Court reiterated this position, directing the appellant to approach the Registrar (Karvy Computershare Pvt. Ltd.) for the issuance of duplicate certificates. The High Court set aside the Trial Court's judgment and granted liberty to the appellant to make an application to the Registrar, who must decide within eight weeks.

Conclusion:
The High Court quashed the Trial Court's judgment, emphasizing that the jurisdiction to issue duplicate share certificates lies with the Registrar of Companies under Section 84 of the Companies Act. The appellant was directed to approach the Registrar for the necessary relief, with the interim order maintaining the status quo on the shares until the Registrar's decision. The High Court also noted that the findings on ownership by the Trial Court, which lacked jurisdiction, held no legal value.