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TMI Blog2018 (8) TMI 1032X X X X Extracts X X X X X X X X Extracts X X X X ..... f the decision of the Hon'ble Supreme Court referred to herein above. As observed herein above, on the basis of objection raised by the transferor, the same can be said to be “sufficient cause” not to transfer such freely transfer shares. In the present case, it is required to be noted that initially when the company refused to transfer the share in the name of appellant transferee in fact no objection at all were there by the respondent Petrofils. The respondent Petrofils lodged the objection only after the decision of the company not to transfer the shares in favour of the appellant transferee. It is also required to be noted that even thereafter also the respondent no. 1 did not refuse to register / transfer of share in the name of appellant on the ground that there are serious dispute with respect to title / pledge. The CLB in the impugned order rejected the appeal / application submitted by the appellant under Section 111A( 2) of the Act on the ground that the suit filed by the plaintiff is pending and there are serious dispute with respect to pledge and therefore, as such CLB gone beyond the reasons even given by the respondent no. 1 company. In view of the above and fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at Industries Power Company Limited. According to the appellant, the Petrofils handed over the custody of 5 share certificates which are in respect of 38, 04, 100 equity shares of respondent no. 1 company to one Jashlok Finance Services who as such was broker / agent of the Petrofils. According to the appellant, the said share certificates were handed over to the said Jashlok Finance Services vide letter dated 19. 12. 1995. According to the appellant, the Petrofils in the year 1997 agreed to create second charge on the fixed assets of Petrofils in favour of the Bank. According to the appellant, the appellant addressed a letter to Jashlok Finance Services to exercise the power of transfer of shares in the name of appellant bank. Accordingly and as per the appellant, Jashlok Finance Service vide letter dated 25. 5. 1999 sent letter / notice to the Petrofils giving notice of 30 days as required under letter dated 19. 12. 1995. It appears that thereafter in the month of August 1999, the appellant also filed application for interim injunction. 2. 2. It appears that thereafter the Petrofils came to be wound up and liquidator came to be appointed on 11. 04. 2001. The appellant Bank als ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er / invocation of shares in question be contemplated without 15 days prior intimation to Petrofils and the same needs to be complied with by you before lodging these shares for transfer (copy enclosed as Annexure C). ( 4). You may be aware that Petrofils is now under liquidation and all the assets would vest with the Liquidator appointed for the purpose and all the claims would lie to the liquidator and the order of liquidation may operate as bar on various actions including the transfer of such shares which are pledged with you before liquidation . 2. 4. That the respondent no. 1 company returned the original share transfer deeds, however it retained the original share certificates with it. That vide written objections dated 17. 08. 2005, the appellant took objections against the refusal to register transfer. That the respondent no. 1 company vide communication dated 31. 08. 2005 informed the appellant that the shares cannot be transferred since the shares in question are subject matter of litigation in Special Civil Suit No. 758 of 1999 filed by the appellant against the Petrofilsrespondent no. 2 herein. It appears that in the meantime respondent no. 2Petrofils addre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 00 shares which were held by the appellant by way of security, which were handed over to the appellant by the respondent no. 2Petrofils its agent / broker as a security while taking fixed deposit of ₹ 40 crores from the appellant. 4. 2. It is further submitted by Shri S. N. Soparkar, learned advocate for the appellant that the subject shares were delivered to the appellant Bank through broker M/s Jaslok Finance Services as and by way of security for the amount of deposit of ₹ 40 Crores made by the appellant in favour of the respondent no. 2Petrofils. It is submitted that there may be some dispute as to the exact date of handing over of the delivery but it is undisputed fact that M/s Jaslok Finance Services had actually handed over the physical possession of the original shares certificates as also the transfer deeds to the appellant. It is submitted that it is not in dispute that such documents were lodged by the appellant with respondent no. 1 for registering the transfer. 4. 3. It is further submitted by Shri S. N. Soparkar, learned advocate for the appellant that though the issue regarding the validity of the pledging of subject shares was not raised by the res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Limited vs. Modern Plastic Containers Private Limited reported in (1998) 7 SCC 105 (para 28 to 31). 4. 6. It is further submitted by Shri S. N. Soparkar, learned advocate for the appellant that Section 111A of the Act allows the shares or debentures of any company to be freely transferred. It is submitted that this provision contained in the law for the free transferability of shares is founded on the principle that the members of public must have the freedom to purchase and, every shareholder, the freedom to transfer. It is submitted that the principle of free transferability must be given a broad dimension in order to fulfill the object of the law. It is submitted that imposing restrictions on the principle of free transferability, is a legislative function, simply because the postulate of free transferability was enunciated as a matter of legislative policy when Parliament introduced Sec. 111A into the Companies Act. It is submitted that therefore, the word transferable is of the widest possible import and by using the expression freely transferable has reinforced the legislative intent of allowing transfer of shares of public companies in a free and efficient domain. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ara 9). 9. Bajaj Auto Limited Vs. N. K. Firodia Another reported in 1970 2 SCC 550 (Para 13, 14, 27 TO 30). 4. 8. It is further submitted by Shri S. N. Soparkar, learned advocate for the appellant that even the ground on which the learned CLB has rejected the appeal preferred by the appellant and has refused to direct the respondent no. 1 company to register the transfer in favour of appellant are not germane and not sustainable. 4. 9. It is further submitted by Shri S. N. Soparkar, learned advocate for the appellant that pendency of the Civil Suit which was filed by the appellant against the respondent no. 2 company for recovery of the amount cannot be a ground not to direct respondent no. 1 company to register the transfer of shares which as such were given to the appellant by way of security / pledge at the time of fixed deposit of ₹ 40 crores. It is submitted that initially as such no prayer was sought with respect to the transfer of shares in favour of the appellant. It is submitted that assuming that even subsequently appellant might have submitted any application for appropriate interim order directing the respondent no. 1 company to transfer the share in fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubmitted that in the present case such an act of the respondent no. 1 company is absolutely mala fide and in connivance with the respondent no. 2 Petrofils and only with a view to favour respondent no. 2 being subsidiary of respondent no. 1 company. Making above submissions and relying upon the above decisions, it is requested to quash and set aside the impugned order passed by the CLB and to direct the respondent no. 1 to effect the transfer of shares and rectify the register of shares in exercise of powers under Section 111 A of the Act, as prayed for. 5. 0. Present appeal is vehemently opposed by Shri Mihir Joshi, learned counsel for the respondent no. 2 Petrofils. Shri Joshi, learned counsel for the respondent no. 2Petrofils has supported the impugned order passed by the CLB by making following submissions; (A). Prima facie the Appellant s claim of pledge is untenable. . . . . (i). There was no delivery of shares to the Appellant in order to constitute a valid pledge. . . . . (ii). he alleged delivery of shares to the Appellant was done surreptitiously and unauthorisedly. It would not constitute valid delivery for the purpose of creating a pledge. . . . . (B). ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tted that it has consistently been the Liquidator s case that there existed no pledge between the parties as alleged by the Appellant. 5. 2. Now, so far as submission on behalf of the respondent no. 2Petrofils that there was no delivery of shares to the Appellant in order to constitute a valid pledge is concerned, it is submitted that in November 19951996, Petrofils had accepted monies from the Appellant in the form of Fixed Deposit Receipts and not loans, which the Appellant could not grant. It is submitted that on 19th December 1995, Petrofils addressed a letter to its broker and agent, Jaslok Finance to hold 38, 04, 100 shares of GIPCL in its custody as security for the borrowing. It is submitted that whilst the Appellant has argued that this handing over of shares to Jaslok finance amounts to a pledge, this has been disputed by Petrofils since 1999 on the ground that this does not amount to custody of the pledgee at all. 5. 2. 1. It is submitted that it is the Liquidator s primary contention that no shares were handed over to the Appellant or its agent. Consequently, since there was no transfer of possession of shares in the present case there exists no pledge between the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Finance writes to Petrofils to provide it with a Board Resolution for giving shares as security and duly executed new transfer deeds. It is submitted that Jaslok Finance also believed that the pledge did not exist, and hence sought such additional documents. 5. 3. Now, so far as the submission on behalf of the respondent no. 2Petrofils that the alleged delivery of shares to the Appellant was done surreptitiously and unauthorisedly and therefore, it would not constitute valid delivery for the purpose of creating a pledge. It is submitted that in the present case the appellant obtained the possession of the shares surreptitiously and unauthorisedly from Jaslok Finance which is evident from the letter dated 3. 3. 1999 addressed by Jaslok Finance to the appellant and the appellant's affidavit dated 26th September 2012. It is submitted that the letter states that they were handing over possession of 38, 04, 100 shares of GIPCL held in the name of Petrofils along with 5 share certificates and transfer forms duly signed. It is submitted that in the present case Petrofils has grossly disputed the authenticity of the said document and it is the case on behalf of the Petrofils that l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mere irregularity but is void. It is held that the notice contemplated under Section 176 was not a mere technicality. It is submitted and it is further held that the Pledgee must exercise his right of sale in a lawful manner, if there was no notice prior to the case it would not constitute a lawful sale and would be void. In support of his above submission, he has relied upon the decision of the Delhi High Court in the case of GTL Ltd. v. IFCI Ltd. reported in 2011 (126) DRJ 394. 5. 4. 1. It is further submitted by Shri Joshi, learned counsel for the respondent no. 2 that in the present case the Appellant has sought to contend that the notice dated 25th April 2005 constituted sufficient notice. It is submitted that the said document was placed on record by an Affidavit of September 2012. It is a document which has seriously been disputed by the Liquidator. There exist no seal or stamp of acknowledgment on the document. Furthermore, the document was placed on record for the first time in 2012 and has not been referred to in any proceeding till the said date. In any case it is a letter by Jaslok Finance and not by the Appellant. In such a scenario it would not constitute ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sal of the Suit. 5. 6. 3. It is submitted that subsequently, only in July 2005 the Appellant filed an application seeking a direction to have the shares transferred in favour of the Appellant. This is the first time that the pledge is mentioned in the said proceedings. It is submitted that furthermore, it must be noted that it is the Appellant that brings the pledge within the scope of the Civil Suit and seeks it enforcement. 5. 6. 4. It is submitted that this stage too the Liquidator seriously contested the application. It is submitted that on 3rd August 2005, the Liquidator submitted a detailed reply to the Application filed by Appellant, denying the existence of any alleged pledge. 5. 6. 5. It is submitted that only after the filing of the said application, on 25th July 2005 the Appellant addressed a letter seeking to invoke the alleged pledge. It is submitted that having sought a determination of his rights qua the pledge in the Civil Application, till such time as the rights between the parties are decided, the transfer application could not have been maintained. It is submitted that the learned CLB was therefore correct in refusing to order rectification. 5. 7. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat there existed sufficient cause for the company to refuse the present transfer of shares. It is submitted that as demonstrated the Respondent disputes the existence of any alleged pledge. There has been no delivery of the shares to the Bank. In the absence of this essential ingredient no pledge can be said to exist. It is submitted that Section 172 of the Indian Contract Act, 1872. The shares were merely delivered to Jaslok Finance as comfort and not to the Bank. The Bank has already made a claim as an unsecured creditor. It has in no way stated to have any form of security in its claim filed before the Liquidator. Even in the Civil Suit, the Appellant has not pleaded the existence of any pledge. The first time the Appellant mentions the pledge is in an Application in the Suit in 2005 seeking a temporary injunction. 5. 9. 1. It is submitted that by a letter dated 12th August 2005, the Company inter alia stated that Petrofils was now under liquidation and that the assets would vest in the liquidator and consequently all claims would lie to the liquidator. Further, the letter also stated that the order of liquidation would be a bar on various acts, including the transfer of s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation the determination of pledge and the priority of contributions is to be determined by the Liquidator and not by the CLB or Company Court. It is submitted that therefore, the present transfer would therefore circumvent the provisions of Section 117 of the MSCS Act, 2002. 5. 10. 1. It is submitted that under Section 117(1)(b) of the MSCS Act, 2002 no Court shall have jurisdiction in respect of any matter concerning the winding up and the dissolution of a multistate cooperative society. It is submitted that Section 90 powers of the liquidator. It is submitted that Section 90(1) states that the whole of the assets of a multistate cooperative society in respect of which an order for winding up has been made, shall vest in the liquidator appointed under section 89 from the date on which the order takes effect and the liquidator shall have power to realise such assets by sale or otherwise. 5. 10. 2. It is submitted that Section 90(2)(c) provides that the liquidator shall also have power, subject to the control of the Central Registrar to investigate all claims against the multistate cooperative society and subject to the provisions of this Act, to decide questions of priority a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y of monies and the exercise of a pledge pertaining to an investment of Petrofils would be included within the phrase relating to the business of such a society . It is submitted that any commercial activity, including but not limited to borrowing, providing of any alleged security and the enforcement of such security would relate to the business of the society. Hence it is submitted that the present proceedings before the CLB were without jurisdiction. The learned CLB rightly held that since no permission was obtained in accordance with Section 117, the present proceedings were without jurisdiction. 5. 13. Now, so far as reliance placed upon the decision of the Hon'ble Supreme Court in the case of Bajaj Auto (supra) as well as in the case of N. K. Firodia Another (supra) on behalf of the appellant and submission that company cannot question ownership and title issues, it is submitted that said decision shall not be applicable to the facts of the case on hand. 5. 14. Now, so far as submission on behalf of the appellant that a transfer has already taken place when blank transfer forms and share certificates were handed over is misconceived is concerned, it is subm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ame of Petrofils, needs to be rejected at the very outset. It is submitted that the argument that the transfer deeds were filed and the transfer was sought was to perfect the security is not the case that is pleaded. In any case as demonstrated above a transfer to oneself by a pledgee would amount to conversion and forfeiture and is impermissible. Various judgments Neikram Dobay v. Bank of Bengal, 1891 LR 60 , Official Assignee, Bombay v. Madholal Sindhu, 1946 ILR Bom 1 , GTL Ltd. v. IFCI Ltd. , 2011 (126) DRJ 394 , Balakrishna Gupta v. Swadeshi Ploytex, (1985) 2 SCC 167, and Lallan Prasad v. Rahmat Ali, AIR 1967 SC 1322 have all held that sale of shares by the pledgee to itself would be a void contract. The Appellant has gone a step further and sought to transfer the shares in its own name without even crediting the Respondent No. 2 with those proceeds. 5. 14. 3. It is submitted that this is no manner perfection of title but in fact a complete abuse of the rights of transfer. In and Lallan Prasad v. Rahmat Ali, AIR 1967 SC 1322 it has been held that If the pawnee sells, he must appropriate the proceeds of the sale towards the pawner's debt, for, the sale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are wide enough to confer enough discretion upon the respondent no. 1 to refuse transfer of the subject shares for any good cause. It is submitted that the cause does not have to be a substantial or real cause. It is submitted that in the present case, respondent no. 1 decision to refuse transfer is objectively based on good cause because the decision is taken in consonance with Article 5(c) of the Articles of Association of respondent no. 1 and further the aforesaid AOA is not under challenge by the appellant. Further, it is pertinent to point out that the respondent No. 1's decision was also affirmed by CLB in the appeal preferred by the appellants. In such circumstances, the present appeal before this Court would be in the nature of a Second Appeal and jurisdiction of this Court in such Second Appeals is very limited and the Court may set aside CLB's decision only if the same is perverse or impossible in law. It is submitted that no such case of perversity or impossibility is made out by the appellant in the present appeal before this Court. 6. 3. It is submitted that respondent No. 1 while refusing to register transfer of shares also gave the reason of the pendency o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7. 0. Heard the learned counsels for the respective parties at length. At the outset, it is required to be noted that what is challenged in the present appeal is the impugned order passed by the learned Company Law Board in the application / appeal submitted by the appellant herein submitted under Section 111 A of the Companies Act, by which, the learned Company Law Board refused to direct the respondent no. 1 company to register the transfer of 38, 04, 100 shares in favour of the appellant original applicant Mehsana District Central Cooperative Bank Limited, which shares, according to the appellant were put as a pledge / security by the respondent no. 2 company at the time when appellant placed fixed deposit amounting to ₹ 40 crores with the respondent no. 2Petrofils Company (now in liquidation). 7. 1. At the outset, it is required to be noted that appellant herein original applicant approached the respondent no. 1 company along with original share certificates as well as dully filled in form / forms to register the transfer of the said shares in favour of the appellant herein original company. That vide letter dated 12. 08. 2005, the respective no. 1 company refused to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by impugned order has rejected the said application / appeal under Section 111 A of the Companies Act and has refused to direct the respondent no. 1 company to register the share in question in favour of the appellant herein original applicant on the ground inter alia, that (1) that the appellant Bank has failed to prove that the impugned shares were pledged with them; (2) that the petitioner Bank had already filed suit against the company (Petrofils) and the said suit is pending; (3) that the issue regarding as to whether the impugned shares are pledged with the petitioner bank can be decided in the said suit. The relevant discussion in the order passed by the learned CLB is as such in para 10 only. 7. 4. At this stage, it is required to be noted that even respondent no. 2Petrofils through his liquidator also approached the learned CLB by Company Petition No. 29/111A/CLB/WR/2005, however the same also came to be rejected by the learned CLB on the ground that said application under Section 111 of the Companies Act is not maintainable. 8. 0. Therefore, in the present appeal order passed by the learned CLB as well as respondent no. 1 company refusing to register the transfer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e conferred absolute and uncontrolled discretion on the Directors to refuse to register transfer where in the opinion of the Directors it was not in the interest of the company to admit the proposed transferee to membership. The evidence in that case was that Deshpande was the lawyer of Sapate. Sapate was quarrelling with the company. Sapate also joined a rival concern. The Directors decision in those surrounding circumstances was found to be a legitimate exercise of the power of the Directors in the interest of the company, 22. The decision in Re. Smith Fawcett Ltd. (1) indicates the extent to which the court upholds the exercise of absolute and uncontrolled discretion of the Directors to refuse to register any transfer of shares. In that case there were two Directors who held the shares in equal numbers. One died. The other Director refused to register the transfer of shares in the names of the executors of the deceased Director except in respect of a part of the holding and upon the condition that the balance be transferred to the surviving Director. It was found to be a justifiable act of the Director in the interest of the company. 23. In the old Bombay decision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as done requiring correction. Rectification in other words, is the failure on the part of the company to comply with the directions under the Act. To show this error the burden is on the applicant, and to this extent any matter or dispute between persons raised in such Court it may generally decide any matter which is necessary or expedient to decide in connection with the rectification. 29. Both under the 1913 Act and 1960 Act a procedure is prescribed for admitting a person as member by purchase or transfer of shares of that company. With reference to 1913 Act under Section 29, a certificate of shares or stock shall be prima facie evidence of the title of the number of the shares or stock therein. Section 30 defines member to be one who agrees to become a member of a company and whose name is entered in its register. Section 31 is to keep register of its members. Section 34 deals with transfer of shares and application for the registration of the transfer of shares is to be made either by the transferor or the transferee. Where such application is made by the transferor for registration of his share a registered notice is to be sent to the transferee. Section 34 (3) restr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts jurisdiction. It cannot be doubted in spite of exclusiveness to decide all matter pertaining to the rectification it has to act within the said four corners and adjudication of such matter cannot be doubted to be summary in nature. So, whenever a question is raised court has to adjudicate on the facts and circumstance of each case. If it truly is rectification all matter raised in that connection should be decided by the court under Sec. 155 and if it finds adjudication of any matter not falling under it, it may direct a party to get his right adjudicated by civil court. Unless jurisdiction is expressly or implicitly barred under a statute, for violation or redress of any such right civil court would have jurisdiction. There is nothing under the Companies Act expressly barring the jurisdiction of the civil court, but the jurisdiction of the 'court' as defined under the Act exercising its powers under various sections where it has been invested. with exclusive jurisdiction, the jurisdiction of the civil court is impliedly barred. We have already held above the jurisdiction of the 'court' under Sec. 155, to the extent it has exclusive, the jurisdiction of civil cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... some of the documents of the appellant but concluded since they are disputed and said to be forged hence directed for seeding leave if advised for suit. We feel it would have been appropriate if the court would have seen for itself whether these documents are disputed and any document is alleged to be forged whether it said to be so jurisdiction of the civil court. So we conclude the principle of law as decided by the High Court that jurisdiction of Court under Section 155 is summary in nature cannot be faulted. reverting to the second limb of submission by learned counsel for the appellant that court should not have directed for seeking permission to file suit only because a party for dispute sake states that the dispute raised is complicated question of facts including fraud to be adjudicated. The court should have examined itself to see whether even prime facie what is said is complicated question or not. Even dispute of fraud, if by bare perusal of the document or what is apparent on the face of it on comparison of any disputed signature with that of the admitted signature the Court is able to conclude no fraud, then it should proceed to decide the matter and not reject it onl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 to 7 and 15, the Hon'ble Supreme Court has observed and held as under: 5. Having heard learned counsel for the parties we are of the opinion that unless there is any impediment in the transfer of a share of a public limited company, such as the appellant, a shareholder has the right to transfer his share. Correspondingly, in the absence of any impediment in this behalf the transferee of a share, in order to enable him to exercise the rights of a shares holder as against the Company and third parties, which is not possible until the transfer is registered in the company's register, is entitled to have a rectification of the share register of the company by inserting his name therein as a registered shareholder of the share transferred to him. To have such rectification carried out is the right of the transferee and can be defeated by the company or its Directors only in pursuance of some power vested in them in this behalf. Such power has to be specified and provided for. It may even be residuary but in that case too it should be provided for and traceable either in the Act or the Articles of Association. Even if the power of refusal is so specified and provided for th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the legislature an intention of making an effort to fix a square peg in a round hole, when the purpose, if it was to confer or recognize any inherent power to refuse registration of the transfer of a share, could plainly be achieved by inserting the words or otherwise after the words under its articles and before the words to refuse to register in subsection (1) of Section 111 which is the subsection relevant for such purpose. 7. The words or otherwise take colour from the context in which they are used. In our opinion, the words under its articles in subsection (2) of Section 111 of the 'Act have been used in the same sense as is expressed in legal terminology by the familiar words conferred by law . Consequently, if the opening part of subsection (2) is read as If a Company refuses, whether in pursuance of any power conferred by 88 law or otherwise it would be incongruous to suggest that the legislature in using the words or otherwise intended to give recognition to a power to refuse registration of the transfer of a share even otherwise than in accordance with law. This would be tantamount to putting a premium on taking the law into one's own hands ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ration, is for the Company Law Board to decide right to appeal. 8. 6. On considering the aforesaid decision of the Hon'ble Supreme Court, principle of law which is imparting is that there is no absolute right in favour of Directors of the Company not to register the transfer of shares; that the Director must act bonafidely and in the interest of company; the Director can refuse the register of transfer of shares if for the valid reasons, the Board of Directors are of the opinion that such transfer shall not be in the company interest; that the proceedings before the CLB are summary in nature; that the CLB can refuse to register the transfer on any sufficient cause. 8. 7. Applying the law laid down by the Hon'ble Supreme Court in the aforesaid decisions, now decision of the respondent no. 1 company and the impugned decision of the CLB in an application under Section 111 A of the Companies Act required to be considered. 9. 0. Considering the reasons given by the Company as well Company Law Board, it appears and it is not the case on behalf of the respondent no. 1 Company that if the shares are transferred in the name of appellant, it will be against the interest of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he share in the name of appellant transferee in fact no objection at all were there by the respondent Petrofils. The respondent Petrofils lodged the objection only after the decision of the company not to transfer the shares in favour of the appellant transferee. It is also required to be noted that even thereafter also the respondent no. 1 did not refuse to register / transfer of share in the name of appellant on the ground that there are serious dispute with respect to title / pledge. The CLB in the impugned order rejected the appeal / application submitted by the appellant under Section 111A( 2) of the Act on the ground that the suit filed by the plaintiff is pending and there are serious dispute with respect to pledge and therefore, as such CLB gone beyond the reasons even given by the respondent no. 1 company. 9. 5. Even otherwise, it is required to be noted that suit filed by the appellant was for recovery of the amount of ₹ 40 crores, which were put by way of fixed deposit with the Petrofils. In the said suit, belatedly the appellant submitted an application for interim relief / direction directing the respondent no. 1 company to transfer the share in question in fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come on record that Jashlok Finance handed over the shares certificate along with duly acknowledged the transfer deeds to the appellant. Considering the aforesaid transfer and the impugned decision of the CLB rejecting the application submitted by the appellant, cannot be said to be sufficient ground not to transfer freely transferable share in favour of appellant. 11. Now, so far as submission that respondent no. 2Petrofils has gone into liquidation and therefore, in view of the bar under Section 117 of the Multi State Cooperative Societies Act is concerned, at the outset, it is required to be noted that in the Company Petition before the CLB there was no relief against the respondent no. 2 society. It is also required to be noted that even the appellant is also Cooperative Bank and the amount which was invested with the Petrofils was a public money to the extent of ₹ 40 crores and now it will be approximately ₹ 100 crores. They put the said amount in the fixed deposit with the respondent no. 2 Petrofils against the aforesaid five shares certificates in respect of 38, 40, 100 equity share of respondent no. 1 company which as such can be said to be put as a securi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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