C.P. No. 4/111A/SRB/2001

C.P. No.67/163/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 111A & 163

AND

IN THE MATTER OF THE M/S VISION TECHNOLOGY INDIA LIMITED

C.P. No.4/111A/SRB/2001:

Shri Ashok Kumar Puri … Petitioner

Vs.

1.Vision Technology India Limited

2.Shri S.V. Raja Rao … Respondents

C.P. No.67/163/SRB/2001:

Shri Ashok Kumar Puri … Petitioner

Vs.

M/s Vision Technology India Limited … Respondent

PRESENT ON BEHALF OF PARTIES:

1. Shri K.M. Gupta, Chartered Accountant… for Petitioner in CP Nos. 4/2001 and 67/2001.

2. Shri P.H. Arvindh Pandian, Advocate … for Respondent No.1 in CP Nos. 4/2001 and 67/2001.

3. Shri N.R. Sridharan, PCA … for Respondent No.2 in CP No.4/2001.

4. Shri V. Balasubramanyan, PCA … for Respondent No.2. in CP No.4/2001.

O R D E R

(DATE OF FINAL HEARING: 09.11.2001)

K.K.BALU:

1. In this order, we are dealing with two petitions – CP No.4/2001 filed under Section 111A of the Companies Act, 1956 (“the Act”) seeking directions against M/s Vision Technology India Limited (“the Company) and another to rectify the register of members of the Company by entering the name of the petitioner in respect 6,000 shares, settle dividend and rights attached to the impugned shares and pay damages for the loss suffered by the petitioner and CP No.67/2001 filed under Section 163 seeking directions against the Company to provide certain documents sought in the letter dated 3.6.2000 of the petitioner. The petitioner as well as the Company in both the petitions are common and the order of this Bench that may be passed in CP 4/2001 would have bearing on the petition in CP 67/2001. For these reasons, both these petitions are disposed by this common order.

2. The facts of the case as stated by the petitioner are that the petitioner had purchased 6,500 equity shares of the Company – 6,000 equity shares from the second respondent and 500 equity shares from one Shri S.Ramachandra Rao – in the year 1995 for valuable consideration and that the shares were duly transferred in favour of the petitioner by the second respondent as well as Shri S.Ramachandra Rao. The present petition (CP 4/2001) relates only to 6,000shares purchased from the second respondent. The impugned shares were misplaced by the petitioner in his office which could be traced out only in October, 1999. Thereafter, the petitioner had lodged the shares impugned in the petition together with the instruments of transfer on 27.12.1999 with the Company to register the transfer in his favour. In spite of repeated demands made by the petitioner, the Company failed to register the transfer of shares in favour of the petitioner. According to the petitioner, all the directors of the Company are related to the second respondent. The second respondent had filed a suit in collusion with the Company before the City Civil Judge Court, Bangalore in O.S. No.102/2000 and obtained an order of temporary injunction restraining the Company from transferring his 1,00,000 shares which include the impugned shares. After the protracted proceedings, the injunction order has been vacated by the Civil Court upon which the Company has preferred an appeal before the High Court of Karnataka and the appeal is still pending. The petitioner pointed out that there has been no stay against registration of transfer of the impugned shares in his favour and hence sought for the reliefs against the Company made in the petition.

3. According to the respondents, the second respondent is holding 1,00,000 shares of the Company. These shares were sent to one Shri Ravi Anandalwar on 21.6.1996 to sell them in the open market, which could not be sold on account of slump in the prices of the shares. In the meanwhile, the share broker informed the Company that the shares belonging to the second respondent which were sent to him for sale, were missing from his office and advised the Company not to transfer these shares, which was not conceded to by the Company. Consequently, the second respondent filed a Civil Suit before the City Civil Court at Bangalore and obtained a restraint order prohibiting the Company from giving effect to transfer of any of these shares. Thereafter, the petitioner got himself impleaded in the Civil Suit and after hearing the parties the City Civil Court passed an order on 27.03.2000 and modified its earlier order vacating the temporary injunction upon which the second respondent filed a miscellaneous petition in MFA 1781/2000 on the file of High Court of Karnataka. The High Court by its order dated 17.11.2000 set aside the order dated 27.03.2000 of the City Civil Court granting liberty to the parties to seek any order as is necessary from the lower court in accordance with law in the pending interlocutory application. Pursuant to the directions of the High Court, the injunction application was taken up for disposal and after hearing the parties the City Civil Court dismissed the injunction application, upon which the second respondent has again preferred an appeal before the High Court of Karnataka which is still pending. In view of the pendency of the proceedings before the High Court, in relation to the shares of the second respondent, which includes the impugned shares, the respondents sought for dismissal of the petition. Though the respondents have agitated in the pleadings that the petitioner did not pay any consideration for the impugned shares, no arguments have been advanced in this behalf.

4. We have considered the pleadings and heard the oral submissions made on behalf of the petitioner as well as respondents. There are protracted proceedings before the Civil Court and High Court in regard to the shares belonging to the second respondent. After hearing the parties concerned, the City Civil Court by its order dated 8.2.2001 in IA No.IV of 2000 in OS No.102 of 2000 has categorically given a finding that the petitioner purchased the impugned shares and that the impugned shares were lodged for transfer, but the Company deprived him of the benefit and accordingly vacated the injunction order in respect of the impugned shares. However, the second respondent has preferred an appeal against the said order dated 8.2.2001 before the High Court of Karnataka which is still pending for adjudication. Admittedly, there has been no order of stay against registration of the transfer of impugned shares in favour of the petitioner. In view of this , we hereby direct the Company to register the transfer of shares in favour of the petitioner within 30 days of receipt of this order, however, subject to the ultimate decision of the High Court of Karnataka in the pending appeal proceedings. It is further ordered that the impugned shares shall be kept in the physical form and that the petitioner shall not effect any transfer of the shares and the Company shall not effect registration of any further transfer till disposal of the pending appeal before the High Court of Karnataka, filed by the second respondent.

5. In view of our order that the Company shall effect registration of the impugned shares in favour of the petitioner, the Company is further directed to make available documents sought by the petitioner (CP 67/2001) within 30 days of receipt of this order.

6. With the above directions, both the petitions stand disposed of.

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

Dated this 10^th day of December, 2001