9911796707
TMI Blog2004 (6) TMI 634X X X X Extracts X X X X X X X X Extracts X X X X ..... ance Ltd. having its registered office at Defence Colony, New Delhi. The loan taken in few instalments presently stands at approximately ₹ 207 lakhs. The petitioners along with others gave collateral security to VLS against inter-corporate loan given by them to Trackparts of India Ltd. by way of deposit of their share certificates along with transfer deeds of Trackparts of India Ltd. 3. The learned counsel for the petitioners submitted that the said VLS did not inform the petitioners at any point of time that Trackparts of India Ltd. had defaulted or otherwise not repaid their loan and the petitioners for the first time came to know on 8th January, 1999 that 2,64,558 equity shares of ₹ 10 each belonging to the petitioners were transferred by respondent Nos. 3, 4 and 5, namely, Mr. K.N. Bhargava, V.N. Bhargava and Dr. G.N. Mathur sometime in August and September 1998 without giving any notice to the petitioners. The petitioners are not certain that the said shares were actually transferred or not and if transferred, then when transferred. The petitioner being aggrieved by the said acts of the respondents filed this petition for rectification of the said 2,64,558 equit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... affecting the transfer of 3,44,658 equity shares, the respondent No. 2 approached the SEBI seeking exemption from making a public offer in terms of Chapter III of the Regulations. The SEBI vide their order dated 19th February, 2002, inter alia, rejected the application for exemption and directed the matter to be referred for adjudication in terms of section 15H(ii) of the SEBI Act, which involves determination of penalty for non-disclosure of acquisition of shares and takeover. The learned counsel for petitioners has submitted that the imposition of the penalty is a separate and distinct action and imposition of penalty should not be interpreted to mean total absolution from non-compliance of the Takeover Regulations. The learned counsel also submitted that as per the case of Ammonia Supplies Corpn. (P.) Ltd. v. Modern Plastic Containers (P.) Ltd.[1998] 17 SCL 463 (SC), the Company Court alone has jurisdiction to exercise the power for rectification. It was also submitted that with respect to transfer of 51,500 shares of the respondent-company, a penalty of ₹ 5 lakhs had been imposed under section 15H, by the adjudicating officer, SEBI vide order dated 20th April, 2000 for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o time to collect dividend/interest on the pledged shares. The petitioner has also executed an irrevocable power of attorney and also blank share transfer deeds in favour of respondent No. 2 (VLS Finance Ltd.). 7. The learned counsel for respondents further submitted that the petitioners committed persistent default of the terms and condition of loan agreement and deed of pledge and did not pay to the respondent No. 2, the principal and interest accrued thereon. The respondent No. 2 was left with no option but to invoke the terms and conditions of loan agreement/deed of pledge. Accordingly, respondent No. 2 lodged 2,44,658 equity shares of ₹ 10 each with the respondent-company for transfer to respondent No. 2. The respondent-company transferred the aforesaid shares in the name of respondent No. 2 on or about 26th August, 1998. It was also contended by the respondent No. 1 that as per pledge deed, respondent No. 2 was entitled to only sell, dispose of or realise any or all of the securities. However, it was not open to the respondent No. 2 to transfer the securities being more than 15 per cent of the total share capital to its own name in violation of the Takeover Regulatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The learned counsel submitted that in the present case, petitioners being shareholders do not fall under any of the aforesaid categories and, therefore, they have no locus standi to file the present petition. The learned counsel relied on the judgment of the Hon ble High Court of Bombay in the case of Shirish Finance Investment (P.) Ltd. v. M. Sreenivasulu Reddy [2002] 35 SCL 27 . In this case, the Hon ble High Court held that a member of the company has no statutory right under the provisions of section 111A to seek rectification of register of members. Para 134 of the judgment is reproduced below : . . .We find nothing in section 111A which has the effect of taking away the common law right of a member of a company to seek rectification of register of a company. At best, it can be said that after insertion of section 111A with effect from 20th September, 1995, a member of the company has no statutory right under the Act to seek rectification of register of members. His common law right, however, remains intact and he can assert that right by filing a suit before a court of competent jurisdiction. A learned Judge of this Court in Gopal Krishna Banga v. Poona Industrial Ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e gone through the records of the case as well as written submission submitted by both parties and the arguments advanced by the learned counsel of both sides. It is admitted by both sides that the petitioners and other respondents, being the promotees of the respondent-company and their family members agreed to pledge some of their shares to respondent No. 2 and executed deed of pledge dated 18th February, 1985 against a loan of ₹ 2 crores granted by respondent No. 2 to the respondents-company. Clause 6 of the deed of pledged, authorised respondent No. 2 (VLS Finance Ltd.) to sell and dispose of the pledged securities or any part of the same in case the respondent-company makes default in paying the amount under the promissory note/loan agreement together with all interest and charges. Clause 11 of the aforesaid deed of pledge also provide that from time to time respondent No. 2 will collect dividend/interest on the shares. The petitioner had also executed an irrevocable power of attorney and handed over blank share transfer deeds in favour of respondent No. 2. The petitioners have contended that shares have been transferred without their knowledge whereas the respondents ha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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