Company Petition No. 7 of 2010. Case: Bhima Govindan Vs Reliance Capital Limited and Ors.. Company Law Board

Case Number:Company Petition No. 7 of 2010
Party Name:Bhima Govindan Vs Reliance Capital Limited and Ors.
Judges:Kanthi Narahari, J.M.
Issue:Company Law
Judgement Date:November 11, 2010
Court:Company Law Board

Order:

Kanthi Narahari, J.M., (Kolkata Bench)

  1. Kanthi Narahari, Judicial Member-The present petition is filed under Section 111A of the Companies Act, 1956 (the Act) seeking direction to the 3rd Respondent to surrender the duplicate share certificate and also sought direction to the 2nd Respondent to return the original share certificates to the Petitioner duly transferred in his name.

  2. Shri P.K. Vankataraman, Learned Counsel appearing for the Petitioner, submitted that the Petitioner purchased 100 shares of the R1-company from Respondent No. 3 through the authorized broker, i.e., Alexander Associates of Cochin Stock Exclrange on 29.1.1994. The Respondent No. 3 executed valid transfer deed and surrendered the original share certificates covering 100 shares. Thus, the requirement for the transfer of 100 shares from R3 to the Petitioner was under due compliance with Section 108 of the Act. The Petitioner revalidated the transfer deed on 18.4.2007 and forwarded the same to the 2nd Respondent on 25.4.2007. Upon lodgment of original share certificate for transfer the R2 refused to transfer the said shares and communicated vide their letter dated 18.5.2007 whereby it is stated that since the share certificates have been lost by the registered holder, duplicate share certificates have been issued to the registered holder on 9.6.2006. Further, the R2 stated that the certificates lodged for transfer are no more valid and the same are cancelled. The R3 fraudulently sought and obtained duplicate share certificates by willfully suppressing the transaction with the Petitioner. The R3 has mis-appropriated the dividends and other lawful corporate benefits.

  3. The Learned Counsel further submitted that the conduct of the R1 in not returning the original share certificates to the transferee is beyond the scope of the statute and against the mandate of the court as held in Jagatjit Industries v. Mohan Meakan Ltd. (1991) 2 Comp LJ 288 (CLB). The Company Law Board is of the view share certificate has to be returned without delay to the persons who lodged them. In view of the reasons stated above the Learned Counsel urged the bench to allow the petition as prayed for.

  4. The R3 filed reply to the petition. It is stated that the petition is hopelessly time barred on the ground that he claims to have been purchased shares in the year 1993 from his broker and approached this bench after lapse of 17...

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