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TMI Blog2018 (10) TMI 1859X X X X Extracts X X X X X X X X Extracts X X X X ..... tter dated 30.10.2015 by citing two reasons for rejection. One is there are criminal/ civil cases being filed by the Petitioner and not attended the board meetings, and secondly original share certificates are not enclosed. As stated supra, it is not in dispute that the impugned shares were issued to respective Transferors and those shares were purchased by the petitioners for consideration by investing huge amount. The petitioner is admittedly shareholder and Director of the Company. And there are no rival claims by any party with regard to impugned transfer of shares. It is true that the Article 5 of the Articles of Association says that original share certificates has to be enclosed with Share Transfer Form. Since the Transferors themselves have furnished sworn affidavits/ indemnity bonds, as stated supra, by declaring that they have lost original share certificates and the Company was requested to issue Duplicate share certifies directly to the petitioner, as they have sold the shares in question, Company cannot again insist to produce original share certificates in question to effect impugned transfer of shares. The other contentions for refusal that there are several criminal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re Capital is ₹ 5,00,000/- (Rupees Five Lakhs only) divided into 5,000 (Five Thousand) Equity Shares of ₹ 100/- (Rupees One Hundred only) each, with power to increase or reduce the capital of the Company. Its main object is to carry on the business of Hotel, Restaurant, Café, tavern refreshment room and boarding and lodging, etc. 2) The Petitioner is an existing shareholder and all the Director/ members of the Company and Board are related/ family members of the Petitioner. The other Directors Mr. Mohamed Shereef Moideen Kunhi Kunhimahin and Mr. Moideen Kunhi Moideen Kunhi Kunhimahin are own brothers of the Petitioner. 3) The Petitioner has purchased 20,000 equity shares (Registered Folio No. 14) of the first respondent Company from one Mr. Shahul Hameed, on 10.04.2015, for a total consideration of ₹ 39, 15,000/- (Rupees Thirty Nine Lakhs Fifteen Thousand Only). The Petitioner has complied with all the necessary / statutory formalities as laid down in law for transfer of shares. After purchasing the said shares, the Petitioner has also given public notice in Kannada language in Samyukta. Karnataka newspaper on 11.07.2015, and in English language in The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n enclosed with share transfer form as required under article 6. 3. It is alleged that there were several criminal assaults / acts committed by respondent-2 and other Directors and their family members on the Petitioner and his family members. Accordingly, the Petitioner and his family members had lodged criminal complaints before the jurisdictional police stations, which were duly investigated and accordingly the FIRs have also been registered by the jurisdictional police stations. The following details are details of FIRS are appended below: FIR No. Date Police Station Petitioner Sections of IPC 741/13 10.12.2013 Vidya Nagar, Kasara od Ameena Nazifa W/0 Petitioner 143,147,148,341, 324,326,294B 92/14 06.02.2014 Vidya Nagar, Kasara od Ahamed Nizar K.M. 1 143,147,148,323, 324, 294, 149 114/ 14 28.01.2014 Vidya Nagar, Kasara od Ahamed Nizar K.M. 420, 468 446/ 14 12.08.2014 Vidya Nagar, Kasara od Ahamed Nizar 323, 341, 294 Apart from above criminal cases, other civil cases vide Suit No.] 4/ 14 before Hon 'ble Sub Court Kasaragod; Arbitration No.01/ 14 before retired Justice P.S. Gopinath, Ernakulam etc are pending adjudication. 4. It is stated that abo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is not admissible in evidence. The so called share purchase agreement or the purposed share transfer form does not disclose The details of shares proposed to be transferred thereunder. Even the newspaper publications do not disclose the description of shares purchased by the Petitioner. The paper publications did not disclose for what purpose they were issued. c. It is stated that the Company has not received letter dated 13.08.2015 from the petitioner. Even otherwise, no share certificate were admittedly enclosed to the letter, which was also confirmed by subsequent letter dated 15.09.2015. The non-receipt of share certificate/ s has also been communicated to the Petitioner vide letter dated 30.10.2015. It is stated that the Petitioner vide his letter dated 19.11.2015, for the firsts time, intimated the Company about the acquisition of shares and loss of original share certificates, about public notice, etc. It is stated that even though notices were sent to the Petitioner to attend the board meetings vide notice dated 09.05.2014, 14.08.2014, 19.04.2015, 05.05.2015, 22.09.2015 and 26.09.2015, he has not attended the Board Meetings. d. It is contended that Section 58(1) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... kind of power struggle, after the death of the Petitioner's father. In fact, it is the Petitioner alone, who has been cantankerous with evenly other family member. The rest of the family members have faced no problems either in their relationship with one another or in the affairs of the first respondent Company. The Petitioner is not willing to adopt a non-confrontational attitude, and used to pick quarrels at the drop of a hat with every other Director. g) The Petitioner has initiated many civil and criminal cases against the second respondent, and other family members. However, initiation of several criminal/ civil cases initiated by the petitioner, creating an atmosphere of mutual mistrust, ill-will and bad blood amongst the Petitioner and other family members. The admission of the Petitioner that there are several civil and criminal disputes between the family members itself proof that the rejection of the request for registration of transfer of shares is well-founded and not based on caprice. h) It is alleged that request of the Petitioner to transfer shares would only increase disputes, and business of the Company would come to a standstill because of the numerical ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wards purchase of a total 32,500 equity shares of the Company, it cannot be refused to transfer the shares on mere technical grounds especially in the absence of any case, transferor has no objection for the same. 9. Shri K.V Satish, learned Counsel for Respondent, while pointing out various averments made in the Common Counter, as briefly stated above, has also filed written Arguments dated 07.12.2017, by inter alia contending as follows: 1) The share transfers in question do not disclose the share certificates number, folio number, name and address of the transferee, not attested by any witnesses, original share certificates were not enclosed by the Petitioner, etc. Non-receipt of share certificate was also communicated to the Petitioner vide order dated 30.10.2015. As per Rule 6 of the Companies (Share Capital and Debenture) Rules, 2014, if share certificates were lost/ misplaced, the registered shareholders ought to have made an application to the Company for issue of duplicate share certificates, after establishing that he had lost share certificates to the satisfaction of the Company. However, the transferor failed to reason so as to satisfy the Board of Directors to conc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsfer. If the Directors refusal to register transfer of any shares, they shall within two months after the date on which the transfer was lodged with the Company; send to the transferor and transferee notice of the refusal. " Section 56 and 58 of the Companies Act, 2013, deals with transfer and transmission of securities, and the appeal to the Tribunal. As per Section 56(1), a Company shall not register transfer of securities of the Company unless proper instrument of transfer in such form as may be prescribed, stamped, dated and executed by or on behalf of the transferor and transferee specifying the name, address and occupation of the transferee has been delivered to the Company by the transferor and the transferee within a period of 60 days from the date of execution along with certificate relating to the securities. It is also stated that Company also may register the transfer on such terms as to indemnity as the Board may think in case the instrument of transfer has been lost or the instrument of transfer has not been delivered within the prescribed period. Section 58 empowers the aggrieved party to approach the Tribunal within a period of 30 days from the date of refu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2015. 13. The Company has rejected transfer of shares vide letter dated 30.10.2015 by citing two reasons for rejection. One is there are criminal/ civil cases being filed by the Petitioner and not attended the board meetings, and secondly original share certificates are not enclosed. As stated supra, it is not in dispute that the impugned shares were issued to respective Transferors and those shares were purchased by the petitioners for consideration by investing huge amount. The petitioner is admittedly shareholder and Director of the Company. And there are no rival claims by any party with regard to impugned transfer of shares. It is true that the Article 5 of the Articles of Association says that original share certificates has to be enclosed with Share Transfer Form. Since the Transferors themselves have furnished sworn affidavits/ indemnity bonds, as stated supra, by declaring that they have lost original share certificates and the Company was requested to issue Duplicate share certifies directly to the petitioner, as they have sold the shares in question, Company cannot again insist to produce original share certificates in question to effect impugned transfer of shares. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 30.10.2015 directing the respondents to register the transfer of 20,000 equity shares of Mr. T. Shahul Hameed (Registered Folio No. 14) in the name of the Petitioner with effect from lodgement of share transfer request on 13.08.2015; 2) Directed the respondents to rectify the register of shareholders by incorporating the name of the Petitioner in place of Mr. T. Shahul Hameed in respect of 20,000 equity shares (Registered Folio No. 14); 3) Directed the respondents to register the transfer of 12,500 equity shares of Mr. P.A. Ibrahim Haji (Registered Folio No. 06) in the name of the Petitioner with effect from lodgement of share transfer request on 13.08.2015, 4) Directed the respondents to rectify the register of shareholders by incorporating the name of the Petitioner in place of Mr. P.A. Ibrahim Haji in respect of 12,500 equity shares (Registered Folio No.06), etc. 5) The Petitioner is directed to submit all necessary documents as sought by the Company, within a period of three weeks from the date of receipt of copy of this Order, and thereafter, the Company is directed to comply the directions as mentioned above, within a period of three weeks thereafter. 6) The petit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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