2021 (6) TMI 209 - Tri - Companies Law

Rectification of register of Members/Beneficiary - transmission of shares - Section 59(4) of the Companies Act, 2013 - HELD THAT - Since the Petitioner is neither a depository, company, depository participant, holder of the securities or the Securities and Exchange Board as specified in Section 59(4) of the Companies Act, 2013 stated to be the persons eligible to approach this Tribunal seeking for a direction from this Tribunal to any Company or a Depository to set right the contravention in rectifying its register or records concerned, the Petition stood posted before this Tribunal for maintainability. From the typed set filed along with the Application, only a certificate of Registration issued by SEBI to the Petitioner to act as Registrars to an issue and share transfer agent dated 13.01.2012 is produced. However, no certificate has been placed on record by the Petitioner to establish that it falls under any of the categories as specified in Section 59(4) of Companies Act, 2013 particularly as a Depository Participant. It is required to be noted that if the Petitioner is aggrieved by the order passed by SEBI based on a complaint filed by the 2nd Respondent, the appropriate course to be adopted by the Petitioner is to approach the appropriate Appellate Authorities itself as provided in the Act under which the order was passed and this Tribunal cannot redress the grievance in relation to the order or in terms of the said order. Further from a perusal of the order passed by SEBI, it is evident that the Petitioner had failed to carry out minimum due diligence exercise taking into consideration the glaring inconsistencies in the 'Certificates' purported to be issued by Police Station regarding filing of complaint with respect to loss of share certificate, submitted by the claimants from which the same could have been identified. This Tribunal is of the considered view that if at all any person who can be considered as 'aggrieved' by the acts of the 1st Respondent or the Petitioner whether individually or in tandem it can be only the 2nd Respondent subject to him establishing his clear title to the shares entitling him to seek for rectification under Section 59 of the Companies Act, 2013 - Petitioner not being covered under Section 59(1) or Section 59(4) of the Companies Act, 2013 as to a person who is eligible to approach this Tribunal seeking for rectification as sought for in the Petition. Petition is directed to be returned by the Registry to the Petitioner as not maintainable.

Issues Involved:
1. Maintainability of the Petition under Section 59 of the Companies Act, 2013.
2. Petitioner's eligibility to approach the Tribunal under Section 59(4) of the Companies Act, 2013.
3. SEBI's findings and directions regarding the transfer of shares.
4. Determination of the rightful claimant to the shares in question.

Detailed Analysis:

Maintainability of the Petition under Section 59 of the Companies Act, 2013
The Tribunal focused on the maintainability of the Petition, as the Registry had listed the matter specifically for this purpose. The central question was whether the Petitioner could be considered a person falling under any of the categories mentioned in Section 59(4) of the Companies Act, 2013, which includes the company, depository, depository participant, holder of the securities, or the Securities and Exchange Board.

Petitioner's Eligibility to Approach the Tribunal under Section 59(4) of the Companies Act, 2013
The Tribunal noted that the Petitioner, a Registrar and Transfer Agent (RTA), did not fall under any of the specified categories in Section 59(4). The Tribunal emphasized that the Petitioner had only provided a certificate of registration issued by SEBI to act as a Registrar and Transfer Agent, but no evidence was presented to establish that it was a depository participant. Consequently, the Tribunal concluded that the Petitioner's request for rectification of the register of members was not maintainable under Section 59(4).

SEBI's Findings and Directions Regarding the Transfer of Shares
The Tribunal referred to SEBI's investigation and subsequent orders, which highlighted a prima facie case of impersonation and failure to exercise due diligence by the Petitioner. SEBI's confirmatory order dated November 7, 2019, advised the Petitioner to restore the shares to the complainant, Mr. Sudarshan Mundra, after verifying his claim. SEBI found that the Petitioner had not conducted the necessary due diligence, particularly in verifying the change of address request and the mismatch of folio numbers.

Determination of the Rightful Claimant to the Shares in Question
The Tribunal acknowledged the conflicting claims between the 1st Respondent, who had obtained the shares through a transfer, and the 2nd Respondent, who claimed to be the legal heir of the original shareholder, Mr. Sewratan Mundra. The Tribunal noted that the 2nd Respondent had approached SEBI, which led to the investigation and subsequent orders. However, the Tribunal held that only the 2nd Respondent, upon establishing his clear title to the shares, could be considered an 'aggrieved person' eligible to seek rectification under Section 59 of the Companies Act, 2013.

Conclusion:
The Tribunal concluded that the Petitioner did not fall under any of the categories specified in Section 59(4) of the Companies Act, 2013, and therefore, the Petition was not maintainable. The Tribunal directed the Registry to return the Petition to the Petitioner. The Tribunal also emphasized that the appropriate course for the Petitioner, if aggrieved by SEBI's order, was to approach the appropriate Appellate Authorities as provided under the relevant Act.

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