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TMI Blog2020 (9) TMI 846X X X X Extracts X X X X X X X X Extracts X X X X ..... o the matter only in the year 2015 and has lost his rights of challenging the transfer deed on account of delay and laches - The company being a listed company, having dematerialised shares cannot access to the transfer of shares. The shares of the public company are traded at the stock exchange and evidently the shares are held by Jayneer Capital P. Ltd., from the year 2006. Appeal dismissed. - T. C. A. No. 15/58, 59 of 2016. - - - Dated:- 17-6-2020 - Smt. Suchitra Kanuparthi (Judicial Member) And V. Nallasenapathy (Technical Member) For the Appellant : Ashish Kamat along with Ms. Keya Raval instructed by Dhru and Co. For the Respondent : Gautam Ankhad along with Ms. Rima Desai instructed by Parinam Law Associates ORDER SMT. SUCHITRA KANUPARTHI (JUDICIAL MEMBER) .- This is an appeal filed under section 59 of the Companies Act, 2013, by the appellant, Rajiv Garg against the respondent, Siti Cable Network Ltd., seeking relief that : (a) This hon'ble Bench be pleased to order the respondent to rectify the register of members by deleting the transfer entry dated March 31, 2007 recording the transfer of 1,66,550 equity shares of the respondent f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Total 50,000 100 As can be seen from the above table, the appellant (one of the sub- scribers of the respondent) held 33.133 per cent. of the issued, subscribed and paid-up equity share capital of the respondent. The petitioner paid the amount of ₹ 1,66,550 as subscription money vide Cheque No. 201001 dated March 24, 2006 drawn on HDFC Bank, Sandoz I-House, Worli Branch. The said amount has been debited to the appellant's account on March 29, 2006. 6. The respondent is a group/associate company of the Essel group of companies, as stated earlier. At the relevant time, the appellant was employed with Essel Corporate Resources P. Ltd., as its CEO-corporate. Considering the appellant's internal relationship within the Essel group, the share certificates in respect of the said 16,550 equity shares subscribed and allotted to the appellant were retained with the respondent. 7. Through an e-mail dated December 21, 2006 one Mr. Laxminarayan, the company secretary of Zee Telefilms Ltd. (now Zee Entertainment Enterprises Ltd.) and the advisor generally to the Essel group and Mr. Subhash Chandra, asked the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d such inspection using various excuses and, in any case, gave only a partial inspection on August 28, 2015 as the office was preparing to shift. On August 31, 2015 the appellant was informed that the records were not available for inspection and that inspection will be provided at Share Pro Services India Ltd.'s office at 13AB, Samhita Warehousing Complex, Second Floor, Sakinaka Telephone Exchange Range, Andheri (East), Mumbai. The appellant followed up with the respondent Secretarial Department for seeking inspection of records. 14. On September 11, 2015 Mr. Anil Dalvi of Share Pro confirmed that inspection of records of the respondent would be provided to the appellant on September 18, 2015 but no records were provided even on inspection on September 18, 2015 and partial records were allowed to be inspected. The appellant during the course of inspection obtained copies of the following entries : (a) Computer record and a printout of a page bearing Folio No. 000001 in the name of the appellant. (b) Computer record and a printout of a page bearing Folio No. 062063 stated to be in the name of Jayneer Capital P. Ltd. ( Jayneer ) recording the alleged transfer of 1,66,55 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The face value of equity shares were sub-divided from ₹ 10 to ₹ 1. 18. The name of the respondent was changed to Siti Cable on September 5, 2012. The appellant and the subscriber to the memorandum of association of the respondent were employees of Essel Group entities. The share transfer deed records the transfer of shareholding by the appellant to Jayneer for a consideration of ₹ 1,66,550. The share transfer was ratified and approved by the share transfer and investor grievance committee by its resolution dated March 31, 2007. The respondent relies upon the copy of the share transfer register certified by M/s. Share Pro Services P. Ltd., the Registrar and share transfer agent of the company. 19. However, in breach of understanding as well as the terms of employment, the appellant sought to claim market value of the equity shares earlier held by him in the respondent. This claim was not acceded by the promoters of Essel group. The appellant's employment was terminated, with effect from January 31, 2007 and he ceased to be a shareholder by virtue of transfer in favour of Jayneer Capital P. Ltd. The shares are currently in dematerialised form and are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o take up employment till the year October, 2011 and had no intimation of fraudulent action of transfer and vide letter dated August 31, 2015 he sought inspection of records from the respondent. Therefore, he denied that the application is barred by limitation. Sur-rejoinder of the respondent 27. The respondent denied all the allegations made in the rejoinder and stated that all documents are available with the Registrar of Companies and Ministry of Corporate Affairs website. The respondent submitted that since the appellant had weak case on merits, as afterthought he is trying to claim that the transfer deed dated December 22, 2006 is fabricated to mislead the hon'ble Tribunal. Citations relied on by the appellant 28. The hon'ble Supreme Court has in the case of Mannalal Khetan v. Kedar Nath Khetan [1977] 47 Comp Cas 185 (SC) ; [1977] 2 SCC 424 held that, the provisions of section 108 of the Companies Act, 1956 (section 56 of the Companies Act, 2013) are mandatory in nature and transfer in violation thereof is illegal and void . Once an act is void, no rights can be claimed under such void transaction by Jayneer or any of the other third parties. The court wou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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