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TMI Blog2016 (10) TMI 370X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. - FIRST APPEAL NO. 406 OF 2016 WITH CIVIL APPLICATION NO. 3681 OF 2016 - - - Dated:- 29-9-2016 - DR. SHALINI PHANSALKAR-JOSHI, J. Mr. P. M. Modi, Sr. Advocate a/w. Mr. N. P. Lashkari i/b Das Associates for the Appellant. Mr. Ankit Lohia a/w Mr. Sanket Shah i/b Akshar Laws for Responde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respect of these shares. The consequential relief of injunction was also sought for. 3. Initially the suit was filed in this Court and this Court was pleased to pass the order of interim injunction restraining respondent Nos.1 and 2 from transferring the said shares in favour of any third person. Respondent Nos.3 to 28 are also joined subsequently in the suit as they were the transferors of the shares in question. 4. In view of the enhancement of pecuniary jurisdiction of the City Civil Court, the suit came to be transferred to the Trial Court. Respondent Nos.1 and 2 resisted the suit by filing the their written statement, denying all the allegations and averments and raising a very specific defence that the Civil Court has no jurisdiction to entertain such suit as the subject matter of the suit can squarely fall within the inquiry and the jurisdiction of the Registrar of Companies in view of Section 84 of the of the Companies Act. The reliance was placed in the written statement itself on the observations of the Apex Court in the case of Shripal Jain Vs. Torrent Pharmaceuticals Ltd. Ors., 1995 Supp (4) SCC 590. 5. In addition to this contention that the Trial Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ved at its own finding that it has no jurisdiction to entertain the suit, as the subject matter thereof, is covered under Section 84 of the Companies Act in view of the Judgment of the Apex Court in the case of Shripal Jain (supra), the Trial Court should not have proceeded further of deciding the other issues relating to the ownership and declaration as sought by the appellant. The proper mode open for the Trial Court was either to return the plaint or to reject the same on that very ground itself of not having jurisdiction over the subject matter of the suit. However, the Trial Court has proceeded to decide other issues also and ultimately dismissed the suit. According to learned counsel for the appellant, the findings of the Trial Court in respect of the merits of the suit claim, being rendered or given by the Court which was not having jurisdiction over the subject matter, those findings cannot be, in any way, having any legal value or binding nature. 9. Learned counsel for the appellant has fairly submitted that the present case squarely fall in the ratio laid down by the Apex Court in the above said Judgment of Shripal Jain (supra). According to him, if the said ra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pany. According to learned counsel for the respondent No.1, unless and until, legality of the finding given by the Trial Court on this issue is tested by this Court, such course cannot be adopted. Hence, in his opinion, it is necessary to admit the appeal and fix it for the final hearing after compliance of paper book. According to him, at the stage of admission of appeal itself, this Court is not armed with any provision of the law, to set aside the Judgment of the Trial Court. 11. In order to appreciate the rival submissions advanced by the learned counsel for the parties, in my considered opinion, it would be useful to first have reference to the averments made in the plaint and also the written statement. 12. As stated above, the simple case of appellant, as pleaded before the Trial Court and before this Court is that the appellant had purchased about 2200 shares of respondent No.1-company, which came to be lost during the transit from the brokers at Delhi to appellant's office at Mumbai. In respect of loss of those shares, the complaint also came to be lodged. Respondent Nos.3 to 28 are the transferors of those shares. The notice of the suit was issued to them but ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntire controversy revolves can be reproduced as follows: 84. Certificate of shares.- (1) A certificate, under the common seal of the company, specifying any shares held by any member, shall be prima facie evidence of the title of the member to such shares. (2) A certificate may be renewed or a duplicate of a certificate may be issued if such certificate- (a) is proved to have been lost or destroyed, or (b) having been defected or mutilated or torn is surrendered to the company. (3) If a company with intent to defraud renews a certificate or issues a duplicate thereof, the company shall be punishable with fine which may extend to ten thousand rupees and every officer of the company who is in default shall be punishable with imprisonment for a term which may extend to six months, or with fine which may extend to [one lakh rupees], or with both. (4) Notwithstanding anything contained in the articles of association of a company, the manner of issue or renewal of a certificate or issue of a duplicate thereof, the form of a certificate (original or renewed) or of a duplicate thereof, the particulars to be entered in the register of members or in the regi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appened in the instant case also. The Civil Court rejected the application of the appellant. The appellant challenged the said decision in the High Court. The High Court dismissed the Civil Revision Application, filed by the appellant in limine. The appellant challenged the said order before the Hon'ble Supreme Court and the Hon'ble Supreme Court observed as follows: 3. We are of the view that the Registrar of the Company was in patent error in referring the appellant to the civil court in the facts and circumstances of the present case. He should have himself held an enquiry into the matter under Section 84(4) of the Companies Act read with the Companies (Issue of Share Certificates) Rules, 1960 and taken a decision himself in the matter. 20. Accordingly, the Apex Court set aside the impugned order of the Civil Court and consequent order of the High Court and remanded the case back to the Registrar to decide the matter, in accordance with law. 21. In the instant case also, the appellant has, after coming to know about the loss of the share certificates, initially approached respondent No.2-the Registrar by sending three letters. However, respondent No.2-the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aring the appeal on merits, the appeal cannot be disposed of at the stage of admission, by quashing the Judgment and order of the Trial Court. 25. In this respect, one has to consider why the Trial Court was constrained to frame the issue relating to the declaration of ownership and why the appellant had sought the said relief. The only cause for the appellant to seek such relief was that the share certificates were lost and duplicate share certificates were necessary to be issued as the Registrar has directed the appellant to approach the competent Court for that purpose. In order to get the necessary direction from the competent Court for Registrar to issue the duplicate certificates, it was necessary for the appellant to seek a relief of declaration that the appellant is the owner and having the title over those shares. The main relief, which the appellant was seeking, was the direction to the Registrar to issue the duplicate share certificate and only to obtain that relief, the declaration of ownership was sought. Hence, once it is held that the jurisdiction to issue the duplicate share certificate lies with the Registrar in view of Section 84(2) of the Companies Act, then i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clude and hold that, it has no jurisdiction to entertain and try the present suit. 29. Not only that, in concluding para 28 also, the Trial Court held that, even otherwise, as demonstrated in the forgoing paras, this court has no jurisdiction to direct to defendants No.1 and 2 to issue duplicate share certificates to the plaintiff. So, the suit must fail. 30. Thus, the Trial Court also came to the categorical finding that it has no jurisdiction to grant the relief as sought by the appellant of directing the Registrar to issue duplicate share certificates. In such situation, the Trial Court should have restrained itself from entering into the discussion on issue relating to the ownership and title of the appellant over the shares. As, the relief of direction to the Registrar to issue duplicate share certificates was the main relief, sought by the appellant and to enable the appellant to get that relief, the consequential/ancillary relief of declaration was sought about his title to shares. If the Trial Court has held that it has no jurisdiction to grant the main relief, then it follows that Trial Court had no jurisdiction even to grant other consequential/ ancillary relief of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thereto, considering peculiar facts of the case as even after the ultimate decision is given one way or the other, that decision is likely to become infructuous as the Civil Court has no jurisdiction to grant substantial relief of giving direction to Registrar to issue duplicate certificate, in view thereof, this Court is adopting exceptional mode of deciding this appeal at the stage of admission itself, instead of allowing the same to languish for some more years. 32. As to the decision relied upon by respondent No.1 in the case of Inter Sales Vs. Reliance Industries Ltd. and Ors. Company Cases 680 Vol. 108 , in that case though the matter relates to loss of equity shares and consequential reliefs, considering the fact that there was dispute with respect to the issue of duplicate shares, it was held that the Civil Court should proceed with the disposing of injunction application expeditiously according to law. Moreover, in the decision of Calcutta High Court, the above said decision of the Apex Court in Shripal Jain (supra) was not cited or referred. 33. In the instant case, the transferors, the original owners of the shares have not at all come forward to challenge the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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