Hasmukh Bachubhai Baraiya vs Symphony Ltd. & Ors

Hasmukh Bachubhai Baraiya ...Appellant

Vs.

Symphony Ltd. & Ors. ...Respondents

Present: For Appellant: - Mr. Shyam K Shelat, Advocate.

ORDER

17.08.2017- The appeal is filed by the Shareholder of Symphony

Limited preferred application under Sections 56, 58 and 59 of the

Companies Act, 2013 for direction to the 1st Respondent Company to

issue duplicate shares in respect of 21500 equity shares vide Ledger Folio

Nos. 021673 and 021674 and for an order to release unclaimed dividend

on those shares.

2. The National Company Law Tribunal (hereinafter referred to as

"Tribunal") Ahmedabad Bench, taking into consideration the disputed

question of the fact and that the appellant apart from the general

statement that share certificate have been misplaced has not enclosed

any evidence in its support and in view of the provisions of the law, and

further taking into consideration the fact that a suit is pending between

the appellant and the 5th Respondent claiming right over the 20000

equity shares, refused to grant relief to the appellant by impugned order dated 26th April, 2017 passed in TP No.1 16/2016(New). The impugned

order is under challenge in this appeal.

3. Ld. Counsel appearing on behalf of the appellant submits that

three issues have not been considered by the Tribunal, but from the

detailed impugned order dated 26th April, 2017, which runs into 20

pages, we find that no such arguments were advanced. In the

circumstances, this Appellate Tribunal cannot decide any other issue

apart from the issue as were raised by appellant before the Tribunal.

4. Ld. Counsel for the Appellant then submits that the impugned

order is bad, there being conflicting observations made by the Tribunal.

It is submitted that at one place the Tribunal accepted that the letter of

1st Respondent dated 20th November, 2015 shows that the signature of

the transferor on the transfer deed tallied with the specimen signature of

the petitioner and in the records of the 1st Respondent Company and the

shares were not transferred only due to insufficient stamp, but on the

ground that a dispute is pending before a Civil Court and the Tribunal

has no power to exercise the jurisdiction under section 56 of the

Companies Act has rejected the claim.

5. Ld. Counsel for the appellant relied on sub-section (2) of Section

46 of the Companies Act, 2013 to suggest that if the company refuses to

exercise its power for issuance of duplicate certificate of shares in case

the shares are lost or destroyed, it is always open to the Tribunal to issue appropriate direction to the company to act in accordance with law

(Section 46(2)) for issuance of duplicate shares certificate.

6. The aforesaid submissions made on behalf of appellant though

appears to be attractive but in the present case, as we find that there is

a doubt about the averment of appellant about misplacement of the

equity shares, and in spite of loss of shares by the appellant in the year

1997, the appellant did not choose to filed any application for issuance

of duplicate shares certificate on the ground that it has been misplaced

for about 20 years i.e. till September, 2015 and there is nothing in the

record to suggest that shares were lost and no specific date or year of

loss has been shown and the 5th Respondent in the meantime claimed

that the shares were transferred in his favour by the appellant as back

as January 1998, it is not a fit case to interfere with the impugned order.

7. Further what we find that in November, 2015, when 3rd Respondent

intimated the appellant that shares have been transferred in January,

1998 in favour of 5th Respondent, then the appellant filed petition under

sections 56, 58 and 59 of the Companies Act, 2013 and the FIR was

lodged much, thereafter in May, 2017 i.e more than twenty years from

the date the shares certificates alleged to have been lost. Aforesaid facts

give an idea that the appellant has suppressed some facts and tried to

make out the case for getting relief from Tribunal.

8. Admittedly, there is dispute relating to title over the shares

certificate between the appellant and the 5th Respondent. A suit is pending between the parties with regard to same shares certificate since

2016. In such a situation, there being a doubt about the averment made

by appellant that the shares were lost or misplaced the Tribunal rightly

refused to exercise its power. We find no reason to entertain the same.

The prayer made in this appeal is accordingly rejected.

9. However, it is made clear that if suit is decreed in favour of

appellant or the other party, holder! owner of the certificates may move

before the company for issuance of shares certificate/ duplicate shares in

view of such fresh cause of action. In such case parties may raise all the

contention and the Tribunal may pass appropriate order in accordance

with law, uninfluenced by any observations made in the impugned order

or order of this Appellate Tribunal. It is also made clear that this order

will not come is the way of SEBI in the matter of investigation, if it has

initiated.

10. The appeal is dismissed with aforesaid observations. However, in

the facts and circumstances of the case, there shall be no order as to

cost.

(Justice S.J. Mukhopadhaya) Chairperson

ar