Mr. Ashwinkumar Gupta vs Visagar Polytex Ltd

Mr. Ashwinkumar Gupta .Appellant Vs Visagar Polytex Ltd. Respondent

With M/s. Sudhirkumar Gupta .Appellant Vs. Visagar Polytex Limited Respondent

Present: For Appellant - Mr. Rahul Chitnis and Mr. Aaditya Pande, Advocates.

For Respondent- Mr. Kamal Ahuja and Ms. Surbhi Sharda, Advocates.

ORDER

08.05.2017- In both the appeals as common question of law involved

and almost similar order(s) passed by the National Company Law

Tribunal, Mumbai Bench, Mumbai, in two different sets of Company

Petition(s) filed under section 111-A of the Companies Act, 1956, are

under challenge, we have heard the cases together and dispose of by this

common order.

2. The Appellant(s) preferred their respective Company Petition(s) under

section 111-A of the Companies Act, 1956, against Respondent M/s.

Visagar Polytex Ltd. (hereinafter referred to as the 'Company') for

directing them to issue fresh share certificates on the basis of reduction

in face value of shares effected by the Respondent Company with regard

to number of shares with folio number submitted by them and also to -2-

direct the company to rectify the Register of Members showing the

Appellant(s) as holder of respective shares in place of the original

shareholders. The Ld. Tribunal rejected the prayer on different grounds

including ground of limitation as the prayer for transfer of shares were

made after 17 years in one case and 20 years in another case.

3. The main plea taken by the Appellant(s) is that the Limitation Act is

not applicable in a petition under section 111-A of the Companies Act,

1956, which was filed before the erstwhile Company Law Board. It is also

submitted that the provisions of Section 433 of the Companies Act, 2013, 1St having come into force on June, 2016, is not applicable to the cases

which were preferred prior to the said date.

4. Ld. Counsel appearing on behalf of the Respondent opposed the

prayer and also raised question of genuinty of share certificates

including the signature(s) of the original shareholders.

5. We have heard Ld. Counsel for the Appellant(s) and Ld. Counsel for

the Company. Having noticed the facts that the share certificates

purported have been transferred about 17 years to 20 years back, we are

of the view that on the basis of the consent given by the original

shareholder 17 to 20 years ago, the transfer cannot be effected at this

belated stage. In this circumstances, without deciding the question

whether the case is barred by limitation or there was delay and latches

on the part of Appellant(s), we are of the view that the company should

return the share certificates submitted by the respective Appellant(s)

within one month. On receipt of such share certificates, if one or the -3-

other Appellant intend to get the shares transfer in their respective

name, they may take fresh consent from the original shareholder in the

proper format and may renew the prayer for transfer of share(s) in their

respective names. However, we were agree with the submissions made

on behalf of the Appellant(s) that these were not the cases where cost

should have been imposed as has been imposed by the Tribunal. We,

accordingly, set aside the part of the respective order(s) by which the

Tribunal imposed cost on the Appellant(s).

6. In view of the aforesaid observation and order as recorded above, Ld.

Counsel for the Appellant(s) sought permission to withdraw the appeals

to enable the Appellant(s) to file fresh application for transfer of share

after obtaining consent from original shareholders. Prayer for withdrawal

is allowed.

Both the appeals stand disposed of with the aforesaid observations.

(Justice S.J. Mukhopadhaya) Chairperson

(Mr. Balvinder Singh) Member(Technical) (ar)