9911796707
TMI Blog2013 (1) TMI 587X X X X Extracts X X X X X X X X Extracts X X X X ..... of 431 shares - Respondent No. 1 sought rectification order from the Company Law Board in respect of the balance 431 shares - CLB directed NSDL to issue notices to respondent Nos. 5 and 6 and take appropriate decision in the matter - Held that:- The role and power of the NSDL is quite restricted and limited as they are not empowered to decide or adjudicate the claim of title in respect of demated shares. Any dispute with regard to the ownership or title of any share including demated, the proper forum is somewhere else. Unless the title and/or any objection regarding transfer of shares is decided finally in case of dispute and in case there is no dispute, it cannot be forwarded by the company for further transfer. As the parties conce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions :- " ...However, in respect of demated shares shares the Respondent No.10 shall issue notices to the parties as stated in prayer 'c' 'd' of the petitioner in whose names the shares have been demated informing them regarding claim of the petitioner in respect of those shares which the petitioner is entitled. After having given an opportunity to the persons in whose names the shares re demated the Respondent No. 10 shall take appropriate decision and inform the Petitioner. With the above directions the CP is disposed off." 4. This poses a question whether the impugned order against the appellant is contrary to law and without jurisdiction?- Yes. 5. The basic facts are as under : (a) Mr. Kamlesh Shah (i.e. Original Petitioner), ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder dated 17/3/2010 allowed the amendment. Amended copy of the plaint was served on the respondent. Affidavit in opposition of the appellant (original respondent No.10) was filed. Respondent No.1 (original petitioner) has filed the rejoinder to the appellants affidavit in objection. (c) The Company Law Board passed the impugned order dated 23/11/2010 in favour of original petitioner and directed original Respondents i.e. the appellant and respondent nos.2 and 3 herein to issue notices to respondent nos.5 and 6 and take appropriate decision in the matter and inform the petitioner. 6. Appellant is a Public Limited Company incorporated under the Companies Act, 1956. The Depository Act, 1996 provides basic principles for setting up and wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aterialization does not result in change in Ownership but results only in change in the method of holding shares. Any share holder who wants to dematerialize his shares in the depository system, can only do so if the Company of which he is the shareholder has made arrangements for joining the depository system by setting up/installing the necessary infrastructure i.e. establishing electronic connectivity with the depository as per the procedure specified by depository. If the Company is not able to set up the required infrastructure or establish electronic connectivity with the depository on its own, it may enter into an arrangement with an Share Registrar/Registrar and Transfer Agent that has already established such a connectivity with de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d them for dematerialization, for that many quantity of securities. On receiving such information from the Company/Registrar and Transfer Agent, depository authorizes credit to the relevant Beneficial Owner account of the security holder which is held with the DP. No credit of any shares to the account of any client shall be made by depository unless depository has received an authorization from the Company/Registrar and Transfer Agent. 8. As per Section 9 of the Depositories Act, 1996, the securities held in dematerialized form with the depositories are fungible i.e. they become identical and interchangeable and cease to have any unique characteristic such as certificate no., distinctive nos., folio Nos. etc. The holdings of particular s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y in case of dispute and in case there is no dispute, it cannot be forwarded by the Company for further transfer. 12. It is also clear that the parties concerned i.e. seller, purchaser, shareholder and/or the Company, unless clears the position about the ownership and/or title of the shares, the Petitioner is no way in a position to accept and/or permit the transfer of demated shares. Their role, in view of the above position, just cannot be enlarged in such a fashion, as done by the impugned order. 13. The Act and provisions referred above and, even otherwise, considering the role and scope, if Appellants are not in a position to adjudicate and/or decide the title of any shares, there is no question of issuing notice to the concerned a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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