M/S. Eicher Motors Limited vs Adesh Kaur & Ors

referred to as Tribunal), New Delhi Bench, in Company Petition No.

8/59/15. By the impugned order the Tribunal ordered to record the

shares in question in the name of the Respondent Mrs Adesh Kaur.

2. The Company Petition was preferred by the 1st Respondent -

Mrs. Adesh Kaur - under Section 59 of the Companies Act, 2013

1 praying for rectification of the Register of Members of Appellant

company and to record her name in respect of 903 equity shares.

Further prayer was made for recovery of all her entitlements such

as dividends, rights issue, bonus shares or any similar entitlement

etc., she has been deprived of.

3. The Tribunal by impugned order held that the

Respondent/ petitioner is entitled for rectification of Register of

Shareholders and allowed the petition with following directions: -

"13. Given the facts of This, this Bench is of Ihe opinion that the petitioner is entitled to rectification oJ Registerof Shareholders ,naintained by the Respondent No.1 company in Folio No. 031308 registerinq her as the rightful owner of 903 shares, details which are provided hereu nde

Folio no. DistiQ ers Number From to of equity shares

058178 10591370 10591469 100 03130 058179 10591470 10591569 100 031308 0.5 10591570 10591669 100 031308: 0581 10591670 10591769 100 031308 8182 l 0591770 10591772 003 TOTAL 403

Folio no. Certificate Distinctive Numbers Number no. From to of equity shares

031308 098712 19404859 19404958 100 031308 098713 19404959 19405058 100 031308 098714 19405059 19405158 100 031308 098715 19405159 19405258 100 031308 098716 19405259 19405358 100 TOTAL 500

14. The original of these certificates, in the physical form, are still in possession of the petitioner. The petitioner may take adequate steps to get

2 the same demated after due confirmation of the rectification of the Register having been carried out.

15. The petitioner would also be entitled to all dividends declared on the aforesaid shares which have not been passed on to her. She would also be entitled to any bonus shares or other benefits that may have accrued on these shares.

16. Petition stands allowed. No order as to costs."

4. Ld. Counsel appearing on behalf of the Appellant submitted

that the petition under Section 59 was not maintainable as no name

purported to be appearing in the Register of Members of the

company. Reliance was placed on Hon 'ble Supreme Court decision

in "MIs. Ammonia Supplies Corporat

Plastic Containers Put. Ltd.

case the Hon'ble Supre .Section 155 of the

Companies Act, 1956 oürt should see for itself

whether the documents a and any documents are alleged

to be forged whether it said to be so only to exclude the jurisdiction

of the court or it is genuinely so The Apex Court further observed

while deciding such issue, the Court should take into

consideration the submissions of Respondents to find out whether

the dispute would come within the scope of rectification or not.

5. In the present case, the Appellant raised dispute before the

Tribunal and pleaded that on 7th November 2012, the 2''

Respondent received a 'transfer deed' along with share certificates

for 903 shares lodged by one Mr Vikas Tara Singh (8th Respondent

3 herein) to transfer the said shares in his favour. After verification

and due diligence, 2nd Respondent transferred the said shares in

favour of the 8th Respondent Mr. Vikas Tara Singh and

transferred shares were sent to him in due course.

6. On 28th December 2012, the 2nd Respondent received a

request from 8th Respondent Mr Vikas Tara Singh, for

dematerialisation of the said 903 shares. Alter verification and

due diligence on 4th November 2013, the demat request was

confirmed by 2nd Respondent to the Depository Participant of 8th

Respondent - Mr Vikas Tara Singh.

7. It was submitted that the 2nd Respondent by its e-mails

dated 18th February 2013 and 28th February 2013 informed the

1st Respondent! Petitioner, Mrs Adesh Kaur, that duplicate share

certificates have already been issued on her request dated 4th

September 2012 after following the due process of law and

completion of documentary formalities.

8. Subsequently, the Appellant received e-mail of 1st

Respondent/ Petitioner on 2nd June 2014 addressed to the

erstwhile Director of the Appellant company and informed about

issuance of duplicate shares when she was informed about

issuance of duplicate share certificates in favour of 8th

Respondent and dematerialisation of subject shares.

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9. It is stated that the 1st Respondent/ Petitioner by e-mail

dated 2nd June 2014 suggested that a fraud had been played

upon by her and documents had been fabricated, signature had

been forged and that there was a possibility of impersonation.

10. According to Ld. Counsel for the Appellant, there being

dispute about the fraud in respect of the ownership of the claim

of the subjective shares and suspected impersonation of a

shareholder and fabrication of documents and fraud played and

as a complaint is pending with the Okhla Police, it was not open

to the Tribunal to pass the order.

11. Ld. Counsel for the Appellant further submitted that the

shares have been dematerialised, and as. the matter is with the

Depository Authority, the question of rectification of Register

under Section 59 of the Companies Act, 2013 does not arise.

12. Ld. Counsel appearing on behalf of the 1St

Respondent/ Petitioner relied on the impugned order and

submitted that the Tribunal alter taking into consideration the

facts that fraud has been committed and Securities & Exchange

Board of India (hereinafter referred to as SEBI) is verifying the

matter has passed the impugned order.

13. On perusal of the impugned order we find that the Tribunal

has given the following reasons to issue direction:

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"4. In the reply filed by Respondent No. 1, they deny any liability and squarely lay it at the door steps of their Share Transfer Agents, Respondent No.2, duly approved by Respondent No. 3. Needless to say that Respondent No. 2 has found it convenient not to appear before this forum. Before this Bench, Respondent No. 1 has denied allegations of fraud, forgery and manipulation of the documents and has submitted that as the facts of the case are disputed, complex and complicated, it would be beyond the summary jurisdiction of this Tribunal to adjudicate in respect of the same. It is further submitted that being a listed company in terms of SEBI guidelines they were under the obligation to appoint a common agency (Registration-cum-share transfer agents), which in this case is Respondent No. 2. This work of maintaining the register and looking after transfer of shares, be it in the physical form or in the demat, was mandatorily required to be entrusted to the SEBI- approved agents, over whom they had to control. Having done so, they were no longer liable for maintaining the record of their shareholders or dealing with transfer of shares and issuance of duplicate certificates. It is further stated that as per the record the shares had been transferred and are presently registered in the name of Mr Vikas Tara Singh, Respondent No. 8. It is also stated that their Share Transfer Agent had duly verified facts and after due diligence recorded the change of address of the petitioner in their records from Sangrur to Mumbai and later issued the duplicate shares. They, however, do not deny that the petitioner has been pursuing redressal of the fraudulent transfer relentlessly. It is also their case that a criminal complaint has been registered on their initiative which is pending with the EOW Cell at Mumbai.

5 Notice was also issued to SEBI Respondent N6.3, the statutory organisation created to protect the interest of investors Though the Ld Counsel appearing on their behalf had filed an application for being dropped fromthe array of parties, it was found expedient to keep them in the loop and get necessary assistance as to what action is contemplated at their end in such cases offraud. Ld. Counsel appearing for Respondent No. 3 submits that the petitioner had not lodged a complaint directly with them but with this Bench and since the matter was sub-judice, they have refrained from enquiring into the matter. It was only after specific directions of the Tribunal that Respondent No. 3 has initiated an enquiry in the alleged fraud perpetuated upon the petitioner. They have also apprised this Bench that in a similar complaint of one Mr Manoj Dharamdas Shah, they had initiated enquiry proceeding against Respondents 1 and 2 which culminated in a finding that shares of the complainant Mr Manoj Dharamdas Shah were fraudulently transferred to a third party. Directions were given for - Respondent No. 1 to reinstate the 100 shares to him.

6. Respondent No. 1 has acknowledged that the petitioner is a victim of fraud. This is evident from the acknowledgement in their correspondence dated 11. 7.2014 which is reproduced as under:

6 "It appears that some unscrupulous person(s) have allegedly impersonated your identity and, misrepresented documents before MCS in order to obtain duplicate Share Certificates and subsequently transferred them to third parties.

EML is already enquiring from MCS further details in your case and would like to assure you that all documents and information available with MCS would be shared with you.

For your reference, the copies of the documents including the request letter dated 20th July, 2012 for the issuance of the duplicate Share Certificates, the indemnity bond, affidavit, copy of FIR, attested Vote ID Card, address proof and the signature verification letter issued by Bank are being provided to you for your reference and record.

This unfortunate instance therefore requires the cooperation and action by both the parties (i.e., yourself and EML) in tandem and we would like to assure you ofourfull cooperation to you. We will proceed to file a complaint with the police and request them to investigate the matter"

14. From the aforesaid finding of the Tribunal, we find that the

Appellant while acknowledged that the 1st Respondent/ Petitioner

may he a victim of fraud, the Tribunal noticed that certain

procedure were not followed and that duplicate transfer shares

had already been issued and transferred and dematerialised in

favour of the 8111 Respondent - Mr Vikas Tara Singh. Thus, there

being an allegation of impersonation and forgery of signature and

fraud lodged already levelled by the 1st Respondent/ Petitioner in

respect of which a criminal complaint has been lodged and is

pending with the Economic Offences Wing Cell of Mumbai Police

and the matter has also been brought to the notice of SEBI, in

the light of the decision of the Hon'ble Supreme Court in "MIs.

7 Ammonia Supplies Corporation (P) Limited v. MIs. Modern Plastic

Containers Pvt. Ltd. & Ors." it was not a fit case for Tribunal to

exercise its power under Section 59 of the Companies Act, 2013

solely on the ground that the original certificates are in the physical

possession of the 1st Respondent/ Petitioner.

15. For the reasons aforesaid, we set aside the impugned

judgement passed by Tribunal in Company Petition No. 8/59/15

and dismiss the Company Petition preferred by the 1st

Respondent! Petitioner.

16. However, this or ill not coe m of the 1

Respondent/ petitioner ove before a ourt of Competent

Jurisdiction for appropriatc relief, including declaration of title over

the shares in question and/or for declaration that the transfer in

favour of the 211(1 Respondent or the 8t11 Respondent are illegal, being

based on impersonation and fraud. Both the appeals are allowed

with aforesaid observation. However, in the facts and circumstances

of the case there shall be no order as to cost.

(Mr. Balvinder Singh) (Justice S.J. Mukhopadhaya) Member (Technical) Chairperson

NEW DELHI 29th August, 2017