9911796707
TMI Blog2004 (1) TMI 713X X X X Extracts X X X X X X X X Extracts X X X X ..... es in respect of 3,39,401 shares of ₹ 10/- each of the Company allotted in favour of the petitioner on 25.10.1996 and further to launch prosecution by the Registrar of Companies against the respondents in terms of Section 113(2) of the Act. 2. The facts, in brief, as reiterated by Shri Arvind P. Datar, learned Senior Counsel, the petitioner had in December 1995, participated in the equity of the Company by investing #65,000, upon which the Company at its annual general meeting held on 25.10.1996 allotted 3,39,401 shares of ₹ 10/- each. In spite of repeated demands both oral and written, as borne out by Annexures E, F I and the complaint made before the British Deputy High Commission (Annexure G), the Company failed to deliv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ares by Dr. Pant in favour of Shri Yatha is only to circumvent the statutory obligation imposed on the Company and must be ignored in the light of the judgment of the High Court of Andhra Pradesh in the appeals preferred against the orders dated 04.09.2000 and 03.10.2000 of the CLB for impleadment of Shri Yatha. By virtue of Section 113, the Company must, within three months after the allotment of its shares, deliver the certificates of all shares in accordance with the procedure laid down in Section 53. Section 53 contemplates delivery of documents on any member by a Company either personally, or by sending it by post to him in the manner specified therein. There is no proof to show that the Company had given physical delivery of the share ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Shri Yatha by way of security for repayment of the loans taken by the Company, in support of which the learned Counsel relied on an affidavit dated 19.11.1999 sworn by Shri Yatha to the effect that Shri Yatha had remitted in the year 1993 an aggregate amount of US $ 20,000 to the petitioner and copy of a letter of Dr. Pant, evidencing the hypothecation of the shares with Shri Yatha to secure the loan provided to the Company. The plea of Dr. Pant that the said letter was fabricated one and that Dr. Pant had left signed blank papers with the respondents is quite improbable and is extremely unlikely as held, in R. Khemka v. Deccan Enterprises Pvt. Ltd. - 1999 (1) ALT 628 (D.B.). This assertion of the petitioner involving serious disputes wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... defaulted in delivering the share certificates in respect of 3,39,401 shares allotted in favour of the petitioner. While the petitioner contends that the Company never delivered the share certificates, the same is stoutly denied by the latter. A careful perusal of the records made available before me reveals that the Company had allotted 3,39,401 shares as early as in the year 1996 to the petitioner. The petitioner had demanded delivery of the share certificates by its letters dated 24.03.1998 13.04J998 (Annexure E F). It is clear from the letter dated 24.03.1998, the petitioner had insisted for the share certificates even in December 1997, which is explicitly reiterated in the legal, notice dated 20.10.1998 (Annexure I) issued to the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , it shall be borne in mind that in the appeals filed before the High Court of Andhra Pradesh by Shri Yatha against the orders of the CLB directing impleadment of Shri Yatha and production of the original share certificates together with the pledge documents, the High Court while setting aside both the orders of the CLB observed that the scope of the enquiry under Section 113 is confined only to whether the Company had delivered the share certificates allotted to the petitioner or not. The CLB does not have the jurisdiction to go into any other aspect to enquire into. The issue of delivery of the share certificates or otherwise has to be adjudicated upon the evidence produced by the petitioner and the respondents. The claim of Shri Yatha, b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Company did not choose either to produce counterfoil of the share certificates said to have been delivered to the petitioner or furnish at least particulars of the shares such as registered folio, certificate Nos. and distinctive Nos. of the shares etc. The decisions cited by learned Counsel for the Company do not apply to the facts of the present case. In other words the Company has not produced any conclusive proof that it had delivered the share certificates to the petitioner. I, therefore, do not hesitate to hold that the Company defaulted in delivering the share certificates and further direct the Company to make good the default under Section 113(1) by delivering the share certificates in respect of 3,39,401 shares allotted in favo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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