C.P. No. 109/113(3)/SRB/2000

C.P. No.6/111A/SRB/2001

Present: 1. Shri S. Balasubramanian, Vice-Chairman

2. Shri K.K.Balu, Member.

IN THE MATTER OF COMPANIES ACT, 1956 (1 OF 1956)

SECTION 113(3)

AND

IN THE MATTER OF SATYAM COMPUTER SERVICES LIMITED

C.P. No. 109/113(3)/SRB/2000

PETITIONER:

Mrs. S. Seetha

RESPONDENTS:

1. Satyam Computer Services Limited

2. Smt. Harwant Kaur

3. Karvy Consultants Limited

C.P. No.6/111A/SRB/2001

PETITIONER:

Mrs. S. Seetha

REPONDENTS:

1. Satyam Computer Services Limited

2. Karvy Consultants Limited

3. Harwant Kaur

4. Alamelu Investments

PRESENT ON BEHALF OF PARTIES:

1. Shri R. Venugopalan, Advocate for Petitioner.

2. Shri S. Ravi, Advocate for Respondent.

O R D E R

(Date of hearing: 08.06.2001)

S. BALASUBRAMANIAN:

1. In the above two petitions, one under Section 111A of the Companies Act, 1956 (“the Act”) seeking rectification of register of members and the other under Section 113 seeking of delivery of share certificates in regard to 100 shares of M/s Satyam Computer Services Limited (“the Company”) allegedly lodged by the petitioner for registration of transfer are disposed of by this single common order.

2. The summary of the petitions is as under:-

The petitioner purchased 100 shares of the Company bearing certificate No.146602, Folio No.7210500 standing in the name of third respondent through the fourth respondent (CP 6/2001) and lodged the same with the second respondent being the share transfer agent of the Company for registration of transfer on 1.8.84. However the Company has not effected the transfer in her name and she has been in correspondence with the Company for a long time. It transpired that the second respondent wrote a letter to the third respondent dated 31.8.94 informing the third respondent that her request for stop transfer cannot be considered since her signature on the transfer instruments does tally with records of the Company and if she desired she should obtain a court injunction order within 15 days failing which the registration of transfer would be effected. This would indicate that the transfer deed along with the share certificate sent by the petitioner had been received by the second respondent. In the meanwhile the second respondent ceased to be the share transfer agent of the Company. When the petitioner contacted the second respondent she was informed that since the second respondent has ceased to be the share transfer agent of the Company all the records had been handed over to the Company. Thereafter, only by a letter dated 12.06.2000, the petitioner was informed that the Company had already issued a duplicate share certificate in respect of these shares impugned in the petition to the third respondent as per her request. In the meanwhile, the Company had also issued 100 bonus shares to the third respondent. Since the petitioner had acquired the shares for valuable consideration and since the second respondent had acknowledged the transfer instrument along with the share certificate the entitlement of the petitioner for these 100 shares should be recognised and the register of members should be rectified not only in respect of these 100 shares but also the bonus shares of 100 as well as 80 shares offered and issued as right shares and she should also be paid all the dividends.

3. No reply has been filed by the second, third and fourth respondents. The Company has submitted as follows:-

The Company is not aware of the lodgement of the instrument of transfer for registration with the second respondent as the same was not brought to their notice. Even prior to the purchase of shares by the petitioner on 09.05.94, the third respondent had applied to the Company for duplicate shares on 16.04.94 and accordingly the duplicate share certificate bearing No.186429 was issued by the second respondent to the third respondent. Since the name of the third respondent was in the register of members when bonus shares were issued in September, 1999, the same has been issued to her. Since there has been inordinate delay on the part of the petitioner in bringing this matter to the notice of the company and also delay in filing of this petition, no relief should be granted.

4. The learned Counsel for the petitioner and the respondent reiterated the averments in the pleadings. We have seen the documents relating to purchase of these shares on 09.05.94 in the form of memo of confirmation given by the fourth respondent and also the delivery slip issued by the fourth respondent (Annexure A-1) to the petitioner. Therefore, the factum of purchase of the impugned shares by the petitioner is not in dispute. We have also seen the memo sent by M/s J.K. Shares to the second respondent (Annexure A-3) regarding despatch of the share certificate together with the transfer deed for registration. Even though there is nothing on record to show the acknowledgement of the second respondent for having received the said documents, yet from the letter dated 31^st August, 1994 written by the second respondent to the third respondent it is evident that the second respondent had received the said documents. In this letter, the second respondent has stated “we have pursued the matter and find that the statement made by you is not correct, since it is clearly evident from the transfer deed executed that the signature was affixed by you. For your reference, we enclose copy of transfer deed received together with the share certificate for transfer from S.Seetha.” Therefore, on 31^st August, 1994, the transfer instrument together with share certificate lodged by the petitioner was with the second respondent. According to the Company, the second respondent had issued duplicate share certificate in respect of these shares on the basis of a letter from the third respondent dated 16.04.94. Even in the letter dated 31^st August, 1994, reference was only to the letter of the third respondent dated 16.04.94. The Company has not indicated the date on which the duplicate certificate was issued by the second respondent. It has also not been made clear as to whether provisions relating to issue of Share Certificates Rules had been followed before issue of duplicate certificates. If the duplicate certificate had been issued before 31^st August, 1994, then there was no need for the second respondent to have issued the letter dated 31^st August, 1994. No duplicate certificate could have been issued after 31^st August, 1994, since the second respondent was in possession of original share certificate as is evident from his letter dated 31^st August, 1994. Thus, we find that the Company/transfer agent had acted in a negligent manner in issuing duplicate certificates and not responding to the request of the petitioner to register 100 shares in her name.

5. Accordingly, in view of the stand of the transfer agent as evidenced by its letter dated 31^st August, 1994 that the signature of the third respondent in the transfer instrument tallied with records of the Company and the factum of purchase of the shares by the petitioner is evinced by Annexure A-1 and Annexure A-3, we hold that the petitioner is entitled to have her name entered as the owner of these 100 shares in the register of members of the Company. Accordingly, we order that the name of the third respondent who has not chosen to file any reply to the petition nor entered appearance in spite of notice, shall be deleted from the register of members in respect of these 100 shares and the name of the petitioner shall be entered in lieu thereof. Since the Company had issued bonus shares of 100 against these original shares, the name of the petitioner shall be entered after deleting the name of the third respondent in respect of these 100 shares also. The petitioner has sought for the rights shares and also bonus shares declared thereof. In the absence of any details as to the timing of the issue right shares and as to whether anyone has applied against these right shares, we are not passing any order as far as these right shares are concerned. As far as dividend is concerned, even though the Company has taken a stand that part dividend has already been paid to the third respondent and since we have held that the petitioner is the rightful owner of these 100 shares as also 100 bonus shares, she shall be entitled for the dividend declared after 09.05.94 and the Company shall pay the dividend on these shares. The registration of transfer as well as payment of dividend shall be effected within 30 days from the date of the receipt of this order. The Company is also directed to issue duplicate shares in respect of these two hundred shares within the same period.

6. The petitioner has also sought for damages claiming that due to inaction of the Company to effect transfer in her name, she could not sell the shares and has lost substantial amount. Since we have already held that the Company had acted in negligent manner, which has resulted in filing of this petition, we direct the Company to pay a compensation of Rs.5,000 to the petitioner which should also be paid to her within 30 days from the date of this order.

(K.K. BALU) (S.BALASUBRAMANIAN)

Dated this the 13th day of July, 2001