2020 (5) TMI 198 - AT - Companies Law

Registering the transfer of shares - issuance of original share certificates in the name of the Appellant - rectification in the Register of Members - HELD THAT - The individual who has purchased the shares is trying hard from 1998 to get the shares transferred and what has been raised by the NCLT that the matter to be adjudicated by appropriate Civil Court. Now NCLT is appropriate court and NCLAT is the appropriate Appellate Authority. This reflect the attitude of the Respondent No.1 by not intimating to the Appellant at least to provide the document if they have not received instead of approaching various courts and putting mental agony and hardship to the Appellant. The Appellant has provided the details of certificate numbers, registered folio of all these shares and the company should have responded immediately in 1998 if they have not received those shares. No action was taken by the company for few years and suddenly went into litigation in various courts - All this suggest that the individual has sent the shares for transfer. The Respondent No.1 is directed to transfer the shares to Appellant after taking requisite declaration, indemnity bond and relevant papers and thereafter to issue shares with consequential benefit in accordance with law - appeal disposed off.

Summary

Issues:
- Appeal against order of National Company Law Tribunal, Mumbai
- Transfer of shares in the name of the Appellant
- Rectification of Register of Members
- Corporate benefits and dividends accrued in the past

Analysis:

1. Appeal against NCLT Order:
The appeal was filed under Section 421 of the Companies Act, 2013 against the order passed by the National Company Law Tribunal, Mumbai. The Appellant sought to set aside the impugned order, direct the transfer of 700 shares in their name, issue original share certificates, and rectify the Register of Members. Additionally, the Appellant requested all corporate benefits and dividends accrued in the past against the shares.

2. Transfer of Shares:
The Appellant had purchased shares through a stock exchange and sent them for transfer to the Respondent. Despite reminders and legal notices, the shares were not transferred promptly. The case involved a history of litigation, including a civil suit and appeals to higher courts, to establish ownership and effect the transfer of shares.

3. NCLT Decision and Appellate Tribunal's Ruling:
The NCLT dismissed the petition citing dematerialization of shares and misjoinder of parties. The NCLT suggested that the ownership issue should be decided by a Civil Court. The Appellate Tribunal observed the delay and hardship faced by the Appellant due to the Respondent's inaction. The Tribunal directed the Respondent to transfer the shares to the Appellant, emphasizing the need for timely communication and cooperation.

4. Final Disposition:
The Appellate Tribunal disposed of the case, ordering the transfer of shares to the Appellant after due process. No other relief was granted, and no costs were imposed. The decision highlighted the importance of prompt action and cooperation in share transfers, emphasizing the responsibility of companies to address such matters efficiently and avoid unnecessary litigation.

In conclusion, the judgment addressed the issues of share transfer, ownership disputes, and the role of the Civil Court versus the Tribunal in resolving such matters. The ruling emphasized the need for timely communication and cooperation between parties involved in share transactions to prevent undue hardship and legal complexities.