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TMI Blog2018 (3) TMI 200X X X X Extracts X X X X X X X X Extracts X X X X ..... den of proof pertaining to their assertion of the fact that on allotment of shares, the Share Certificates were sent to the Petitioner. It is on record that the name of the 1st Respondent Company was changed, and as a matter of procedure, the old Share Certificates were to be called back and fresh Share Certificates had to be issued; but nothing has been placed on record that at any point of time, on change of the name of the 1st Respondent Company, the fresh Share Certificates were dispatched to the Shareholders including the Petitioner. Therefore, the Respondents failed to prove their claim that the Share Certificates were issued to the Petitioner by 1st Respondent Company. There is even no shred of evidence to show that at any point of time the Petitioner has transferred her 500 shares to Respondent No. 4. Thus, the resolution dated 23.9.2009 passed by the Board of Directors of 1st respondent company to transfer 500 shares held by the petitioner in 1st Respondent Company is not based on any valid document, which is in violation of the provisions of Section 108 of the companies Act 1956. Therefore, the issue stands decided in favour of the Petitioner and against the Respondent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rying on business of manufacture of wide range of fabrics and garments, yarns, etc., and having its registered office at No. 27, Kalvettupalayam, Vengambur P.O. Erode Taluk and district, Tamilnadu. 3. The petitioner claims that she had purchased 500 shares each ₹ 100/- in the 1st Respondent Company viz. M/s. Texline Fabrics India Private Ltd., that was incorporated with the name of Sundaram Fabrics Private Ltd, through an allotment by the Board of Directors of the 1st Respondent company during the year 2005 by making payment of the sum of ₹ 35,000/- during the month of January, 2005 and thereafter balance of ₹ 15,000/- was paid along with an additional sum of ₹ 1,000/- towards postal charges for sending the certificates, other documents and notices, only through Registered Post with Acknowledgement Due. The petitioner continues to hold such shares in the 1st Respondent company and never sold or transferred such shares to anyone at any point of time till date. The 1st Respondent and its Directors viz. 2nd and 3rd Respondents had deliberately failed and willingly neglected to send the share certificates pertaining to the said shares allotted to the petition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hares owned by the petitioner to 4th respondent (2) original minutes book containing the minutes of the meeting of the Board of Directors approving the alleged transfer of shares (3) original register of members (4) original register of transfer and transmission of shares. (b) Direct the 4th respondent to produce before this Hon ble Tribunal, the original share certificates comprising 500 shares owned by the petitioner and allegedly transferred to him. (c) To award to the petitioner a sum of ₹ 1,35,000/- towards financial loss and damaged and a sum of ₹ 50,000/- towards damages for mental agony and inconvenience and hardship caused and for the cost, and (d) To award ₹ 50,000/- towards damages for improper conduct of Respondents No. 1, 2 and 3 under section 111(4) of the Companies Act, 1956. (e) To impose a fine as provided under section 629A of the Companies Act, 1956 against Respondents No. 1, 2 and 3 for the offences committed by them under Section 108 of the Companies Act, 1956. 5. The counter has been filed on behalf of the Respondents No. 1 and 2. Respondent No. 3 has adopted the reply filed by them by filing a Memo on 11.3.2016 and R4 has file ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th respondent executed a deed of indemnity on 18.9.2009, based on which the company transferred 500 shares held by the Petitioner in the 1st Respondent Company at Board meeting held on 23.9.2009 to 4th respondent, due to which the petitioner ceased to be a shareholder of the 1st respondent company. Therefore, the Board of Directors of the 1st Respondent Company were not required to send notices of the meeting and minutes of the same and annual returns of the 1st respondent company to the petitioner. 8. Further, it has also been stated in the reply that the 1st Respondent Company had immediately, after allotment of the shares to the petitioner has sent the certificates for 500 shares. But the petitioner has waited for all these years and raised the issue after ten years when the petitioner had the access of the documents that were kept in the registered office of the company and such allegations were made belatedly by the petitioner which is otherwise evidenced from the legal notice dated 20.6.2014, sent by the petitioner after nine years of the allotment of shares to the 1st Respondent Company calling upon its Board of Directors to send the share certificates to the petitioner. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the Petitioner had knowledge about the transfer of her shares. The perusal of the pleadings reveal that the Petitioner has become aware about the transfer of her shares in favour of Respondent No.4 only on 14.7.2014, when her counsel has received the reply of her legal notice that was sent to the Respondents on 2.6.2014. Therefore, the objection of the Respondent pertaining to the issue that the Company Petition is time barred stands rejected, the petition has been filed on 26.8.2015, which is within the period of limitation. Issue No. ii 12. In relation to the issue pertaining to issuance of Share Certificate for 500 shares to the Petitioner, it has been stated in para 10 of the reply filed by the 1st and 2nd Respondents that the 1st Respondent Company had, immediately on allot of shares to the Petitioner, sent the Share Certificates of 500 shares to the Petitioner. But, no proof of dispatch has been placed on record in support of the said assertion. Therefore, the Respondents did not discharge the burden of proof pertaining to their assertion of the fact that on allotment of shares, the Share Certificates were sent to the Petitioner. It is on record that the name of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Director dated 23.9.2009 reveal that 500 shares of the Petitioner were transferred in favour of Respondent No. 4 on the request of the Petitioner, but nothing has been placed on record which could show that any request for transfer of shares has been made to the 1st Respondent Company or its Director by the Petitioner. In the absence of the Transfer Deed, the 1st Respondent Company did not even verify from the Petitioner, about the fact of execution of the purported Share Transfer Deed, which is stated to have been lost by Respondent No. 4 during travel, for which no F.I.R has been lodged to the effect as to when and where the said document was got lost, which is expected of a person, who loses his/her property. The Respondent No. 4 did not even approach to the Petitioner for seeking fresh Transfer Deed. Therefore, there is even no shred of evidence to show that at any point of time the Petitioner has transferred her 500 shares to Respondent No. 4. Thus, the resolution dated 23.9.2009 passed by the Board of Directors of 1st respondent company to transfer 500 shares held by the petitioner in 1st Respondent Company is not based on any valid document, which is in violation of the pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ows:- (a) The resolution dated 23.9.2009 passed by the Board of Directors by which 500 shares of the Petitioner held in the 1st respondent were transferred to Respondent No.4, is held violative of the Provisions of Section 108 of the Companies Act, 1956 and is set aside. (b) The 1st Respondent Company and its Board of Directors are directed to rectify the Register of Members by removing the name of Respondent No.4 and entering the name of the Petitioner to the extent of 500 shares, and consequently pay all the benefit, if any, accrued there on w.e.f. 23.9.2009 till date to the Petitioner. (c) The 1st Respondent Company and its Board of Directors are directed to issue share certificates to the Petitioners for 500 shares being held by her in 1st Respondent Company within 10 days from the date the copy of this order is submitted by the Petitioner to the 1st Respondent Company. (d) The 1st Respondent Company and its Board of Directors are directed to pay ₹ 50,000/- as costs of the litigation to the Petitioner within three weeks from the date the copy this Order is received. The order is pronounced in open court in presence of the Counsel of both the parties. The fi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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