9911796707
TMI Blog2015 (7) TMI 93X X X X Extracts X X X X X X X X Extracts X X X X ..... on under section 111 and 111A of the Companies Act, 1956 before this Bench. It is established that the petitioner has not complied with section 108 of the Companies Act, 1956 and the company is not bound to lodge the share certificate along with the share transfer deed within a reasonable time to the company. A person seeking transfer of shares has to mandatorily comply with the provisions of the Companies Act, by submitting a proper instrument of transfer duly stamped and executed by or on behalf of the transferor and by or on behalf of the transferee along with the certificate relating to the shares and there can be no exception to this mandate prescribed under the Act. In my view the company cannot be faulted for non transfer/non registering of shares in the petitioner's name as the petitioner himself has to be blamed for his failure to comply with the relevant provision laid down under the Act for transfer and registration of shares. - Decided against the assessee. - CP. No. 9/2012 - - - Dated:- 13-4-2015 - SHRI KANTHI NARAHARI, J. For The Petitioner : Shri. T.K. Shajahan, Advocate, Shri. K. Manoj Menon, Advocate and Shri. P. Neelakantan, Advocate For The Respon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ne of the legal heirs of their mother late Rubina Paul. b. 25 numbers of preferential share purchased from Dr Susheel Cleetus and c. 10 numbers of equity shares from the successors of late T.K Pylunni 3. However the petitioner could not submit the shares and share transfer forms before the Board of directors in order to get the shares transferred in the register in the name of the petitioner as the above said series of litigations between two groups of directors are going on and in effect there was no board and the hospital was under receivership as per the order of Hon'ble High Court of Kerala for a long period. Petitioner's father was in one group and Prof. V.D Sebastian, earlier Chairman and Managing Director headed the other group. From 02.08.2002 onwards the management of R1 Company and the hospital was with the Board of directors elected in the extra ordinary general body meeting held on 04.05.2002 and the Chairman of the company was Prof. V.D Sebastain. When the petitioner heard that all the litigations were over and almost all of the shareholders have an intention to sell their shares to any prospective purchasers for reasonable and fair value, the petition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... astian sent a reply stating that the petitioner has not complied section 108 of the Companies Act. The petitioner caused to send a NO. dated 26.07.2011 to the Chairman stating that he is ready to comply with section 108 of the Companies Act once written approvals of the company or the transfer is informed. To the above said request dated 26.07.2011 of the petitioner, the present managing director of the company who is the 3rd respondent herein had issued a reply dated 15.09.2011 stating and took the same earlier stand taken by the earlier Chairman and Managing Director, i.e. 5th and 6th respondents. They simply stated in the reply that the request of the petitioner cannot be acted upon for the reasons of non compliance of the provisions of the Companies Act, 1956 and procedural formalities prescribed in the Articles of Association of the company. The Board of director of the company does not exercise its powers of refusal to transfer of shares in the name of the petitioner in good faith or bonafide. The Board knows that the courts will not interfere with their decision if they act bonafide and in the interests of the company. Thus in the name of acting in the interests of the compa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he petitioner. On 06.06.2011, the petitioner's counsel issued a notice for transfer of 25 numbers of preference shares, purportedly registered in the name of Dr Susheel Cleetus, in favour of the petitioner. Neither the transfer form nor the share certificates were submitted to the Company. On 10.06.2011, the company rejected the request. for non-compliance with section 108 of the Act and the articles. This petition has been riled in November/December 2011. beyond the period prescribed under section 111(3) of the Act. Therefore the petition is liable to be rejected on this ground too. The purported transfer Form executed by Ms Thankam Paul is dated 19.04.1996 and was also purportedly presented on the same date, purported transfer farm for transfer or 25. numbers or preference. shares of Dr Susheel Cleetu's was purportedly signed on 05.08.1993 The request notice for transfer was made in March/ June 2011, beyond the mandatory period stipulated under section 108 (1A) of the Act. Further, none of the transfer forms or the share certificates were presented/ submitted to the company for transfer. the purported transfer forms are invalid and the company is barred by law from acting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e respondents state that this petition is not maintainable in law or on facts and would not warrant any intervention by the Hon'ble Board under sections 111 or 111A of the Act. This Hon'ble Board would not entertain this wholly motivated and vexatious petition which is an abuse of the due process of law. It is therefore prayed that this Hon'ble Board may be pleased to dismiss the petition with the exemplary costs. 6. The respondent No.5 filed an affidavit dated 18.02.2012. It is stated that he has sold his shares in the City Hospital Company and resigned from the position as Chairman of the Board in June. 2011, Since he has no connection with the City Hospital now in any capacity and no relief has been claimed against him. It is stated that he has been arrayed as 5th respondent only to harass him and his name is liable to be struck off the array or respondents. It is stated that 94 shares formerly held by Rubina Paul, allegedly transferred by her daughter, Thankam Paul as successor in title. The transfer form is executed on 19.04.1996 and presented to the company only in 2011 after a lapse of about 15 years. On this form the date 19.04.1996 has been entered by the Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the mother i.e. Smt Rubina Paul is the shareholder of the R1 Company. However the case of the petitioner is that he has got share transfer form form Smt Thankam Paul who is the sister of the petitioner duly executed share transfer form on 19.04.1996 for 74 number of equity shares. From perusal of photo copy of share transfer form dated 19.04.1996 is is seen that Smt Thankam Paul singned the share transfer form in the capacity as transferor and the petitioner signed in the capacity as transferree on the share transfer form. Even to decide the issue of maintainability of the petition the following questions need to be answered. 1. Whether originally Smt (late) Rubina Paul is the shareholder of 74 number of equity shares. 2. Whether the shares have been transmitted in the name of Smt Thankam Paul. 3. Whether the name of Smt Thankam Paul entered in the register of members of R1 Company. 4. Whether Smt Thankam Paul has any right to transfer the shares which she is not holder of the shares. 9. Now each question needs to be dealt with. In so far as the question No.1 is concerned. The Hon'ble High Court of Kerala in its judgment mentioned that Smt (late) Rubina Paul was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y that there is no application from the successor of Smt (late) Rubina Paul to transmit the shares in successor's name. When there is no application in seeking transmission of shares even in the year 2011 the company cannot act on the shares of Smt (late) Rubina Paul. Smt Thankam Paul filed a company petition being CP No.32/200 before the Hon'ble High Court of Kerala at Emakulam seeking winding up of the R1 Company. The Hon'ble High Court clearly held at para 17 coming to the case in hand there is no case for the petitioner that the concerned shares originally held by the deceased mother of the petitioner have been got registered in her name. Her only case is that by virtue of the succession certificate obtained by her in O.P (succession) 13/1994 of the Sub Court. Cherthala, she is the only person to succeed to the said asset. But declaration in the above O.P and the rights and liberties in respect of the shares is with regard to the eligibility of the petitioner as a legal heir of the deceased. to the exclusion of all others. Issuance of such succession certificate cannot ipso facto put the petitioner directly in the place of the original holder and she cannot be a &# ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 06.06.2011 wherein it is stated that they are submitting a transfer form dated 05.08.1993 along with copy of receipt of preferential shares held by Dr Susheel Cleetus. It is also stated in the letter that the petitioner had purchased the shares on 05.08.1993. When the petitioner purchased the shares in the year 1993 there is no valid reason that why the petitioner withhold the share transfer form and share certificate from submitting to the company for registering the share transfer in the favour. The petitioner except addressing the letter through his Advocate on 06.06.2011 has not taken any steps for submitting the documents. The company vide its reply dated 10.06.2011 categorically stated that section 108 of the Companies Act, has not been complied with by the petitioner. Further it is stated that the litigation between the directors cannot be a ground for preventing the petitioner from submitting the share transfer form along with share certificate for transfer with the company. The company further stated that the transfer of 25 preferential shares which was presented on 06.06.2011 cannot be entertained and considered for want of required documents and non compliance with ..... X X X X Extracts X X X X X X X X Extracts X X X X
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