CASE IN BRIEF: Section 111A of Companies Act, 1956 – Loss of share certificates – fraudulent transfers – non- issuance of duplicate share certificate by company – whether petition is maintainable- Held, Yes.
FACTS: The Petitioner has filed a petition under Section 111A of Companies Act, praying for an order for rectification of register of members by restoring the name of the petitioner and payment of the accrued benefits.
In the year 1997, the aforesaid share certificates in physical form were lost and a police complaint was lodged by the Petitioner. However, on the other side, when the said share certificates were first lodged with the erstwhile M/s. Jindal Strips Limited (“Company / Respondent company”) by some person for transfer in his name, wherein the signature of the petitioner were forged and fabricated, the company noticed the difference in the signatures with the specimen signatures of the petitioner in its records and returned the share certificates to the alleged transferee and also, informed the petitioner in this regard and made a ‘stop transfer’ remark in its records. Immediately thereafter, the petitioner informed the company about the loss of share certificates along with copy of the police complaint.
When the petitioner applied for issuance of the duplicate share certificates, the company rejected the request informing that the said share certificates have already been lodged with the company by various alleged transferees.
Therefore the present petition filed against such rejected request and other matter incidental thereto.
DECISION: Petition allowed
REASONS FOR ALLOWING THE PETITION:
The petition was allowed by the board on the following grounds:
Firstly, the petitioner has complied with the entire requirement for issue of duplicate share certificates and submitted the affidavit, indemnity bond, police complaint and demand draft of necessary fees.
Secondly, in the year 2001, the company informed the petitioner about a scheme of arrangement between M/s. Jindal Strips Limited and M/s. Jindal Steel & Power Limited, whereby the petitioner would be allotted shares in the ratio of 60:40, and thereby the petitioner was allotted 300 new equity shares of Rs. 10 each of M/s. Jindal Strips Limited and 200 new equity shares of Rs. 10 each of M/s. Jindal Steel & Power Limited. In the later years, there was a stock Split and issue of bonus shares in the company and the petitioner was also paid dividend till the year 2001 which all justified the fact that company accepted the ownership of the petitioner on the impugned shares as no claim was made by the respondent before any court or judicial authority for transfer of impugned shares.
Thirdly , Neither the respondent nor their counsel have appeared before the Hon’ble board despite the notices issued to the Respondents on different dates, therefore the aforesaid order passed.