BEFORE THE COMPANY LAW BOARD, NORTHERN REGION BENCH,

NEW DELHI

 

                                                                                                                             17TH  Jan. "2002.        

                                                                                   

CP No.3/111/2000

 

                                                            Present: 1.Justice A.K. Banerji,Chairman,

                                                                          2.Shri S. Balasubramanian,Vice Chairman

 

In the matter of Companies Act 1956, Section 111(4)

 

AND

 

In the matter of NIIT Limited having its Registered Office at NIIT House,C-125 Okhla Phase I, New Delhi-110020.

 

AND

 

                 In the matter of  Pyariben M. Shah                                                     Petitioner

 

                                            Versus

 

                                 NIIT Limited                                                                          Respondent

 

Present on behalf of the parties

 

1..Shri Vinod M. Shah, for the petitioner

2.Shri Kunjal Dalal, Practicing Company Secretary for petitioner

3.Shri Partha Banerjee,Manager(Legal) for Respondents

4.Shri Gaurav Khanna , Advocate for respondents

 

 ORDER

                                         (Date of hearing 4.1.2002)

 

 

A.K. BANERJI

 

By means of this petition filed under Section 111(4) of the Companies Act 1956 ( the Act ) the petitioner has interalia prayed  for rectification of the register of members of the respondent company by registering 100 shares of the company in the name of the petitioner, bearing the distinctive numbers specified in the petition, as well as the bonus shares issued thereon.  Consequential reliefs have also been sought.

2.         Briefly stated, the petitioner's case is that she had purchased 100 shares of the respondent company from a broker and had lodged the original share certificate alongwith valid transfer deeds with the company for transfer of the shares in the name of the petitioner.  However, the share certificates alongwith the transfer deeds were returned by the respondent company vide letter dated 16.3.95 stating that the name of the transferee was not in English and advising to relodge the document after rectifying the defect.   The petitioner relodged the original share certificate alongwith the transferdeeds duly rectified vide registered letter dated 26.4.95, which as per the postal certificate issued by the Post Office was received by the respondent company on 29.4.95.  No action however was taken by the respondent company despite reminders and subsequently after a long time the petitioner was informed vide letter dated 22.1.96 that no such registered letter containing the documents was received by the company.  The petitioner, therefore, had to file a civil suit in the court of Civil Judge Mangrol Distt. Surat which was subsequently withdrawn on 1.12.99 as the said court had no jurisdiction in the matter and the present petition was filed on 22.2.2000, for the reliefs mentioned above.

3.         The respondent company has filed a reply raising certain preliminary objections.  That apart, it has been further stated  that 100 duplicate shares alongwith further 50 duplicate bonus shares were issued in the name of the transferor on 15.5.2000 which on the same date were duly endorsed in the name of the petitioner after the petitioner had complied with the legal formalities for issuance of duplicate share certificates.  It was further stated that the cause of action for which this petition was filed having extinguished, the petition deserves to be dismissed

4.         The petitioner has filed a rejoinder to the said reply wherein in paragraph 2  the receipt of the duplicate certificate for 100 shares and duplicate certificate for 50 bonus shares have been admitted .  However, the petitioner has  claimed that she was entitled to further 50 bonus shares issued for the year 1995 as well as 25 bonus shares on the said 50 shares for the bonus declared in the year 1999. 

5.         We have heard the learned counsel for the petitioner and the learned practicing Company Secretary for the respondent.  We have also perused the pleadings.  It may be mentioned at the outset that this petition was filed under Sec 111(4) of the Act .  however, on the oral request made on behalf of the petitioner we have treated this petition as under Sec. 111A of the Act.  It is apparent from the pleadings that the main grievance of the petitioner is that though she had submitted the original share certificate alongwith valid transfer deed but her name was not recorded on the ground that the respondent company had not received the said documents, despite  the petitioner having given documentary evidence that the same was sent by Registered Post and duly served on the respondent company.  In our view, however, as admittedly the respondent company had issued duplicate shares in lieu of the 100 shares purchased by the petitioner as well as issued 50 duplicate bonus shares on the said original shares, to the petitioner, the relief claimed in this petition does not survive. 

6.         On behalf of the petitioner, however, it has been contended that the company had issued bonus shares during the period when the petitioner lodged the  certificates in respect of the shares in question and the same were lying with the respondent company, therefore, over and above the 50 bonus shares now issued by the respondent company to the petitioner they are also entitled to the 50 bonus shares issued in the year 1995 and the 25 bonus shares issued thereon in the year 1999.  We have carefully considered the said submission but are unable to agree.  It is noteworthy that the duplicate shares in question were not recorded in the name of the petitioner till 15.5.2000, as the respondent company was denying receipt of the  original documents in question, therefore, the petitioner could not be treated to be a legal holder until the shares were registered in her name.  Till that time the name of the transferor existed in the company's record as owner of the shares in question and therefore the bonus shares would have been issued by the company in the name of the transferor.  For the said reason the stand taken by the respondent company cannot be said to be wrong, illegal or without sufficient cause   However, if the petitioner being a transferee of the shares in question has any claim pertaining to the bonus shares issued to the transferor in respect of the said shares, she could, if so advised, proceed against the transferor in respect of the said bonus shares at the appropriate forum.  We agree with the learned counsel for the respondent that there is no obligation on the respondent to issue either any  bonus shares as claimed or to pay any compensation to the petitioner in the facts of the present case.

7.         For the reasons stated above the petition is dismissed .  No order as to cost.

 

 

(S. BALASUBRAMANIAN)                                                  (A.K. BANERJI)

        Vice Chairman                                                                     Chairman