Akula Nagalaxmi vs Crompton Greaves Ltd

Smt. Akula Nagalaxmi W/o Gopuri Shankar Archana Dresses, Subash Road, Kamareddy Town, Nizamabad Distt Andhra Pradesh- 503111 Appellant

Vs

1. M/s.Crompton Greaves Ltd CG House, Dr.annie Besant Road, Worli, Mumbai 400030 Represented by its Managing Director Sri S.M.Trehan

2. Rupesh K Sanghvi Broadway Avenue A10/24 RNA Complex, Mira Road, Mumbai 401107

3. M/s Zen Securities Ltd 101 Vijayasree Apartments Nagarjuna Nagar Colony Hyderabad 500007 Respondents

Present:

Mr. Narender Singh Yadav, Advocate for Appellant. Mr Shankh Sengupta and Ms Jojongandha Ray, Advocates for R1.

JUDGEMENT

( 30th January, 2020)

Company Appeal (AT) No.247/2018 2

Dr. Ashok Kumar Mishra, Technical Member

The present appeal has been filed under Section 421 of the Companies

Act, 2013 against the impugned order dated 02.05.2018 passed by National

Company Law Tribunal, Mumbai Bench, Mumbai in CP

No.45/111A/MB/2011. The relief sought by the Appellant is to set aside

and/or quash the impugned order dated 02.05.2018 passed by the NCLT

Mumbai; to direct the Respondent No.1 to register the transfer of 700 shares

in the name of Appellant and also issue original share certificates in the name

of the Appellant and also to rectify the Register of Members by entering the

name of the Appellant with a holding of 700 shares in the Register of

Members. The Appellant has further sought relief to pay and give all corporate

benefits including all dividends accrued in the past and all such dues against

the shares of the Appellant.

2. The brief history of the case what has been submitted by the Appellant are as follows:

3. The Appellant had purchased shares through M/s Zen Securities Ltd,

Hyderabad both in her name and also in the name of her husband against bill

No.3119 dated 23.4.1998, No.23080 dated 09.10.1997 and bill No.5207 dated

07.05.1998 through National Stock Exchange. Both husband Mr. Gauri

Shankar and wife Mrs. Akula Nagalaxmi, the Appellant forwarded 1450 shares

in the same envelop to Respondent No.1 through Sanchar Courier for transfer in

the name of Appellant and her husband on 30.5.1998 vide Courier consignment

Note No. L115288. Thereafter the Appellant sent several reminders to

Respondent No.1 for transfer of shares in her name. Thereafter the Appellant

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had issued a legal notice on 12th March, 1999. They have also submitted that

similar case with her husband has happened where they originally transferred

only 50 shares and thereafter the rest of the 700 shares have been transferred

after going through several litigations from Company Law Board, Hon'ble High

Court to Hon'ble Supreme Court. Thus 750 shares were transferred in the name

of Appellant's husband. Mr. Gauri Shankar filed Company Petition No.69/2008

before Company Law Board, Mumbai and the same was disposed off in his favour

and on 28th September, 2010 directing Crompton Greaves Limited i.e.

Respondent No.1 to issue share certificates for 750 shares and also put a cost of

Rs.25000/- on the Respondent to be paid to the petitioner. The cost was stayed

at the superior court but in any case the matter travelled from Junior Civil Judge

Kamareddy to Hon'ble High Court and thereafter to Hon'ble Supreme Court but

finally the transfer has been effected.

4. Similarly in this case also the Appellant has filed Civil Suit in the court of

Junior Civil Judge, Kamareddy, being OS No.73/1999 for declaration that the

Appellant is the lawful owner of shares and for direction to effect transfer of

shares in her name. The Appellant was decreed Ex-parte by the aforesaid court

vide order dated 31st January, 2000. Thereafter Respondent No.1 filed petition

to set aside the ex parte decree passed I.A No. 288 of 2006 in O.S No.73/1999

and the same was dismissed on the ground of delay 2611 days on 18th July,

2006 by the Principal Junior Civil Judge of Kamareddy. Whereas the Hon'ble

High Court of Andhra Pradesh by an order in Civil Revision No.4758 of 2006

allowed the said CRP (Civil Revision Petition) and set aside the ex parte order

passed on OS No.73/1999 and the Hon'ble Supreme Court dismissed the Special

Company Appeal (AT) No.247/2018 4

Leave Petition filed by the Appellant against the order of Hon'ble High Court of

Andhra Pradesh setting aside the ex parte decree.

5. The Appellant had also alleged that thereafter the matter was placed before

the NCLT Mumbai as the case was transferred from Company Law Board and

they have placed all the relevant orders in respect of her husband before the

Learned Tribunal and they have considered the issue and dismissed the petition

on the ground of limitation and complicated question of facts which can only be

decided by Civil Court. Hence the Appellant has filed the present appeal.

6. We have gone through the facts of the case. It is being observed that the

NCLT has basically dismissed the petition as the shares were dematerialised and

it has been transferred in the name of number of persons whereas they have

made only Respondent No.2 i.e. Rupesh.K.Sanghvi as party Respondent. The

NCLT is also of the view that they should have made all the transferee as on the

date as Respondents which result into misjoinder of parties. Hence accordingly

NCLT considered the issue as of ownership of shares and hence decided that the

proper forum for deciding the title to shares is only a Civil Court and not a

Tribunal.

7. Respondent No.2 has not been represented in this case inspite of serving

notice through newspapers and other way as confirmed by the petitioner on

21.1.2019. Thereafter the case was listed on several dates viz. 06.02.2019,

18.02.2019, 13.03.2019, 29.03.2019, 25.04.2019 01.05.2019, 07.05.2019

17.05.2019, 11.07.2019, 19.07.2019, 14.08.2019, 02.09.2019, 13.09.2019,

01.10.2019, 25.10.2019, 25.11.2019, 03.12.2019, 09.12.2019 & 09.01.2020

but the counsel for the Respondent No.2 has not appeared. The question is not

Company Appeal (AT) No.247/2018 5

here relating to ownership of shares but relating to transfer of shares or its

rejection.

8. The steps involved in this case was when the shares were purchased

through Respondent No.3 i.e. M/s.Zen Securities Ltd., both by husband and

wife were sent in the same envelop through courier and initially they have

transferred only 50 shares in husband case and based on further orders

Respondent No.1 have transferred the entire shares. In case the Respondent

No.1 has not received those shares they should have responded to the Appellant

at that very time during 1998 which has not been done by and 150 shares in the

meantime they have put under "stop transfer". Now the individual who has

purchased the shares is trying hard from 1998 to get the shares transferred and

what has been raised by the NCLT that the matter to be adjudicated by

appropriate Civil Court. Now NCLT is appropriate court and NCLAT is the

appropriate Appellate Authority. This reflect the attitude of the Respondent No.1

by not intimating to the Appellant at least to provide the document if they have

not received instead of approaching various courts and putting mental agony

and hardship to the Appellant. The Appellant has provided the details of

certificate numbers, registered folio of all these shares and the company should

have responded immediately in 1998 if they have not received those shares. No

action was taken by the company for few years and suddenly went into litigation

in various courts. All this suggest that the individual has sent the shares for

transfer and accordingly we direct the Respondent No.1 to transfer the shares to

Appellant after taking requisite declaration, indemnity bond and relevant papers

and thereafter to issue shares with consequential benefit in accordance with law.

Company Appeal (AT) No.247/2018 6

9. With these observations the case is disposed off and no other relief is

considered. No order as to costs.

(Justice Jarat Kumar Jain) Member (Judicial)

(Mr.Balvinder Singh) Member (Technical)

(Dr. Ashok Kumar Mishra) Member (Technical) New Delhi RK

Company Appeal (AT) No.247/2018