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TMI Blog2024 (7) TMI 1218X X X X Extracts X X X X X X X X Extracts X X X X ..... e got the delivery of the shares on 02.05.1997 along with the original shares and blank transfer deed. He also states that through his proprietorship concern Jain and company, Mr. Anoop Jain made the payment to Delhi Stock Exchange. In effect the appellants' sole objection is that there is discrepancy in the timeline when the shares were sold by the appellant No. 1, and thereafter sold by broker to the respondent No. 1 in each appeal and that in Mr. Anoop Jain's case the contract notes, bills for delivery of possession of shares and proof of having paid the consideration is not coming forth and in Saraf brothers' case the contract notes, bills for delivery of possession of shares and proof of having paid the consideration were placed on record by them after the order was reserved by the learned Company Court but they did not get any chance to rebut the same. The matter is remanded back to the learned Company Court only for the limited purpose to inquire when the 4000 shares subject matter of transfer to Mr. Anoop Jain; 1500 shares subject matter of transfer to Mr. Murari Saraf, 900 shares subject matter of transfer to Mr. Banwari Lal Saraf and 600 shares subject matter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no. 1 to not to sell, transfer, create charge or mortgage or deal in any manner with its property and assets without the written assent of RBI. Subsequently, winding up petition being Company Petition no. 191/1997 was instituted against CRB Capital Markets Ltd. by RBI. In this very petition vide an ad-interim ex-parte order dated 22.05.1997, the learned Company Court appointed an official liquidator as a Provisional Liquidator qua CRB Capital Markets Ltd. The Provisional Liquidator was directed to take into custody all properties, books of accounts, records and documents of the company. 5. While the aforesaid company petition was pending adjudication several applications were filed by creditors of appellant no. 1 claiming rights over certain shares. Applications bearing CA No.782/2006 by Murari Lal Saraf, CA No.783/2006 by one Bihari Lal Saraf, CA No.784/2006 by one Banwari Lal Saraf, and CA No.1232/2005 was instituted by one Anoop Jain. Bihari Lal Saraf, Banwari Lal Saraf and Murari Lal Saraf are brothers. 6. It is the case of the respondents that they were investors in Reliance Industries Ltd. The amount payable against purchase of the shares, works out to be Rs. 4,48,134/- by M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndents therefore, directed the Official Liquidator to sell the rights entitlement in open market and freeze the proceeds in a fixed deposit to ensure to the benefit of successful applicants. Subsequently, Official Liquidator filed a subsequent application bearing CA No. 348/2020 seeking permission of the learned Company Court to publish a General Public Notice‟ seeking deposit of physical shares with it for the purposes of de-materialization. The same was allowed vide order dated 06.07.2020. Thereafter, Bihari Lal Saraf also filed another application bearing CA No. 499/2020, Murari Lal Saraf filed CA No. 501/2020, Banwari Lal Saraf filed CA No. 505/2020 and Anoop Jain filed CA No. 503/2020 before this court whereby the learned Company Court vide order dated 31.08.2020 directed them to deposit the entire shares in original with the Official Liquidator while holding that their interest is squarely protected in terms of order dated 22.05.2020. Vide the same applications, respondents except Anoop Jain also, placed copies of the share certificate along with share transfer deeds on record. 9. All the parties put forth their arguments and vide impugned order the learned Single Judge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and submitted to Karvy Consultants Ltd., respondents sought transfer of shares they had allegedly bought from A.G. Vidyasagar Co. Thus, there could not have been any occasion for him to have shared the certificates with Karvy Consultants Ltd. / RIL for transfer. It is also most relevant to notice that as per the record, A.G. Vidyasagar and Co, had purportedly purchased the said shares only on 17.04.1997 and respondents could not have sought any transfer of the same after 12.04.1997. The above-mentioned facts were sufficient for doubting the veracity and authenticity of the transaction claimed by the respondents. 12. It is submitted by Ms. Devika Mohan, learned counsel for respondent Anoop Jain that, learned Single Judge failed to appreciate that CA No. 1232/2005 was grossly delayed and was beyond the period of limitation. It is an admitted stand that Anoop Jain became aware of the restraint imposed vide order dated 22.05.1997 and communication dated 20.06.1997, yet the present application was preferred only in 2005 i.e. after a gap of 8 years from the date of first knowledge. Thus, the Impugned Order is liable to be set aside for Anoop Jain. 13. The learned counsel for the appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Judge failed to appreciate that the alleged sale bill also refers to a hand written note thereupon which mentions CRB Corporation Ltd. and not CRB Capital Markets Limited. This fact indicates that CRB Capital Markets Limited (In Provisional Liquidation) has not received any consideration towards the sale of subject shares. 16. The learned counsel for the appellants further submitted that the impugned order is liable to be set aside as it has allowed the applications without ascertaining the date of purchase, which necessarily has to be done prior to issuance of prohibitory order, the application of the above-mentioned respondents could not have been allowed. It is submitted that impugned order nowhere ascertains the date of purchase of the said shares but merely proceeds on a statement by the Ex-management in a factually different context and scenario of M/s Vikram Commercial Limited wherein the facts revealed sale purchase of shares to be 24.01.1997; i.e., before the issuance of prohibitory order of 09.04.1997. 17. The learned counsel for the appellants further submitted that the Reserve Bank of India issued the prohibitory order under section 45MB (2) of the Reserve Bank of India ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l for the appellants further submitted that in their account statements, Bihari Lal Saraf and Murari Lal Saraf showed debit of Rs. 179,253.60 and Rs. 448,134/- from their bank account. It is submitted that the bank statements of Bihari Lal Saraf and Murari Lal Saraf do not show to whom these payments were made. Further the statement of M/s. AG Vidyasagar Co., does not reflect credit entries of these payments received from Banwari Lal Saraf (Rs. 179,253.60) and Murari Lal Saraf (Rs. 448,134/-). In case, these payments were in fact encashed in the account of M/s. AG Vidyasagar Co., the credit entries would have reflected separately as credits of Rs. 179,253.60 and Rs. 448,134/-. It is also pertinent to point out that bank statement of Banwari Lal Saraf has not been filed by Saraf‟s before this Court, leading to an adverse inference that the payment is not reflecting in his account statement. 21. It is submitted that the learned Single Judge erred in holding that the order passed in application bearing C.A. No. 176/1998 would apply to the present case. The facts of both the cases are completely different. In the case of Vikram Commercial Ltd., it was held that the shares were pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ocus to file and/or maintain the present appeals. 25. It is further submitted on behalf of respondent Anoop Jain that he got the delivery of all 28900 shares on 02.05.1997. All shares accompanied with blank transfer deeds, however, for the present case the blank transfer deeds of 4000 shares are relevant which were duly signed by the authorized signatory of CRB Capital Markets. It is submitted that the above case is exactly the same as that of Vikram Commercial Ltd. where the settlement cycle was between 12.04.1997 to 25.04.1997. The previous owner of shares was also CRB Capital Markets Ltd. hence, in view of the above, the application moved by Anoop Jain deserves to be allowed. 26. It is submitted on behalf of Anoop Jain that he has original shares certificates as well as share transfer deeds and therefore he is the owner of the said shares. Thereafter, original share certificates were deposited with the Official Liquidator on 07.09.2020 as per the Notice published in Newspaper dated 28.07.2020, regarding the deposit of the physical share certificates of Reliance Industries Ltd. held in the name of CRB Capital Markets Ltd. for converting the same to dematerialized form. This notic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd. for converting the same to dematerialized form. This notice had been published by O.L. in compliance of the various orders passed by this Court in C. P. No. 191 of 1997. 30. It is submitted that Official Liquidator i.e. the main contesting party has not filed any appeal till date and admittedly as per various Judgements of the Hon‟ble Supreme Court of India, the appellants does not have any locus to challenge the impugned order. In view of the above, the order dated 10.08.2023 deserves to be vacated and the present appeal deserves to be dismissed. 31. Learned counsel for respondent no. 2 submitted that there is no documentary evidence on record evidencing sale purchase of the shares of RIL held by the company (in Provisional Liquidation) i.e. M/s CRB Capital Markets Limited. There is also no document on record evidencing any flow of consideration between the applicant and the company. 32. Learned counsel for respondents relied upon the following judgments: (i) R.K Aggarwal v. Official Liquidator Others, 2020 SCC OnLine Del 2667 (ii) V.K Sharma v. Official Liquidator Others DHC CO.APP. 24/2018 (iii) Standard Chartered Bank Anr. V. Custodian Anr. (2000) 6 SCC 427 (iv) Cla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hares were not registered because appellant No. 1 was the owner of these shares and there was a restrain order against it. 36. It is an admitted position that the original share certificates of 4000 RIL shares (96 in number) along with transfer deeds are in possession of Shri Anoop Jain. Now the only issue raised is of consideration for these 4000 shares. Shri Anoop Jain has relied on Delhi stock exchange register within the cycle 12.04.1997 to 25.04.1997 to show that he had paid the consideration. He also stated that he got the delivery of the shares on 02.05.1997 along with the original shares and blank transfer deed. He also states that through his proprietorship concern Jain and company, Mr. Anoop Jain made the payment to Delhi Stock Exchange. 37. However, the appellants contents that the contract notes, bills for delivery of possession of shares and proof of having paid the consideration are not placed on record by the respondent No. 1. 38. The CO. APP pertaining to Mr. Murari Saraf, CO. APP pertaining to Mr. Banwari Lal Saraf and CO. APP pertaining to Mr. Bihari Lal Saraf (three SARAF Brothers): The above named three brothers have contended that they purchased a total 3000 RI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... matter of transfer to Mr. Anoop Jain; 1500 shares subject matter of transfer to Mr. Murari Saraf, 900 shares subject matter of transfer to Mr. Banwari Lal Saraf and 600 shares subject matter of transfer to Mr. Bihari Lal Saraf brothers were sold by the Appellant No. 1, CRB Capital Markets Limited. Once it is established that CRB Capital Markets Limited had sold these shares prior to 09.04.1997, then the only satisfaction is to be obtained is the dates of contract notes, bills for delivery of possession of shares and proof of respondent No. 1 in each appeal having paid the consideration for these shares stated to have been purchased. 42. Without disturbing the decision of the learned Company Court, the matter is remanded back to the learned Company Court only for the limited purpose to inquire when the 4000 shares subject matter of transfer to Mr. Anoop Jain; 1500 shares subject matter of transfer to Mr. Murari Saraf, 900 shares subject matter of transfer to Mr. Banwari Lal Saraf and 600 shares subject matter of transfer to Mr. Bihari Lal Saraf brothers were sold by the Appellant No. 1, CRB Capital Markets Limited and to whom; and that Mr. Anoop Jain, Mr. Murari Saraf, Mr. Banwari L ..... X X X X Extracts X X X X X X X X Extracts X X X X
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