Delhi High Court
Vinod K. Patel vs Industrial Finance Corporation Of ... on 27 January, 1999
Equivalent citations: 1999IIAD(DELHI)650, [2001]103COMPCAS557(DELHI)
ORDER Usha Mehra, J.
1. Shri Vinod K. Patel, appellant has assailed the impugned order of the Company Law Board (in short the Board), inter alia, on the ground that the Board could not have dismissed his appeal on the ground of maintainability. It was the appellant who felt aggrieved by illegal and unlawful action of the respondent company, thereby not transferring the shares sold by the petitioner to the transferee. Even though appellant was neither the transferor nor the transferee, still being an aggrieved person because of the action of the respondent, his appeal was maintainable under the provision of sub section (2) of Section 111 of the Companies Act (in short the Act).
2. In order to appreciate the points raised, let us have quick glance to the facts of this case. The appellant herein had sold 100 shares to one Shri Kanwarpal Singh. Shares were delivered alongwith the transfer deed on which the appellant put his signatures witnessing the execution. The said Kanwarpal Singh lodged the shares with the Registrar as well as with the transfer agents for the registration of transfer of the said shares in his name. No reply was received from the respondents inspite of repeated reminders nor the shares were transferred. However, in March,1995 an envelope was received from the respondent containing share certificate, Transfer Deed and other documents. The share certificates indicate that the respondent transferred those shares in the name of Shri Kanwarpal Singh by affixing the stamps. This the respondents did after satisfying themselves about the authenticity of the signatures of the transferor namely, Smt. and Shri Suresh G.Thakkar. Hence, the subsequent action of the respondent in refusing the transfer in the name of Shri Kanwarpal Singh was not justified. On respondent refusing transfer, Shri Kanwarpal Singh approached the appellant. This appellant replaced those 100 shares sold to Shri Kanwarpal Singh by issuing another set of 100 shares. Because of the refusal to transfer those 100 shares by the respondent, the appellant suffered financially. He, therefore, approached the Board by filing an appeal under Sub Section (2) of Section 111 of the Act.
3. By the impugned order Board found that since the appellant was neither transferor nor transferee hence he had right to file the petition. He was also not the person who had given intimation of the transmission by operation of law. In this regard, reference can be made to the provisions of subsection (2) of Section 111 of the Act, which is reproduced as under : "2) The transferor or transferee, or the person who gave intima tion of the transmission by operation of law, as the case may be, may appeal to the Company Law Board against any refusal of the company to register the transfer or transmission, or against any failure on its part within the period referred to in subsection (1), either to register the transfer or transmission or to send notice of its refusal to register the same."
4. Relying on the above provision, appellant contends that appeal ought to have been accepted by the Board because even if the appellant was not a transferor or a transferee, still being an aggrieved person his appeal was maintainable. He was the one who sold the shares to Shri Kanwarpal Singh on behalf of the transferee i.e. Smt. and Shri Suresh G.Thakkar. Therefore, in the absence of transferor or transferee he was the aggrieved person who suffered heavily financially.
5. The expression "aggrieved person" would include the transferor of the shares who handed over the documents for the transfer. It was the transferee who lodged the share certificate with the company. It was these 100 shares which were refused by the company to be transferred in the name of the transferee on account of the signatures of the transferor not tallying.
6. The question for consideration is whether in the present appeal any question of law has been raised. Contention of counsel for the appellant that "any other person" appearing under Section 10F of the Act would also include beside transferor or transferee, a person whose right has been effected, to my mind, this argument is without substance. Admittedly this appellant being neither the transferor nor transferor nor person giving intimation of the transmission his appeal could not have been covered under the provisions of subsection (2) of Section 111 of the Act. Appellant's status was merely an intermediator in the transaction. He never made any request to the company for registration of the shares. Because of this transaction if the appellant has suffered some monitory loss, that prayer could not have been covered under Section 111(2) of the Act. Since the substantive prayer could not have been invoked by the appellant hence ancillary prayer of compensation for monetary loss could not have been claimed. Substantive relief could have been registration of transfer of shares, which relief was not sought by the appellant. In fact no legal infirmity has been pointed in the approach of the Board in the impugned order. Having failed to make out any legal infirmity in the impugned order of the Board, appeal would not lie to the High Court. Section 10F of the Act which is reproduced as under provides :
"Appeals against the orders of the Company Law Board Any person aggrieved by any decision or order of the Company Law Board may file an appeal to the High Court within sixty days from the date of communication of the decision or order of the Company Law Board to him on any question of law arising out of such order :
Provided that the High Court may, if it is satisfied that the appellant was prevented by sufficient cause from filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days.
7. This appellant has not been able to formulate any question of law which requires consideration. As already observed above, the appellant being merely a intermediatory in the transaction, no legal right had accrued in his favour to file appeal before the Board. The word "any person" appearing under Section 10F of the Act has direct reference to the provisions of Section 111(2) of the Act. Against the decision of the Board only that person can file appeal who had a right to file appeal to the Board and against whom decision had been given by the Board. But person other than transferor or transferee cannot file appeal before the Board. This shows that any person aggrieved appearing Section 10F of the Act has a direct nexus with the transferor or the transferee as the case may be. Stranger to subsection (2) of Section 111 of the Act by no stretch of imagination can be called "any person aggrieved". The work "aggrieved" refers to a person having substantial grievance who has been denied some personal or property rights. Merely because the transferor and transferee chooses not to prefer appeal before the Board was no ground to permit the appellant to prefer appeal on account of his alleged pecuniary loss. He cannot be called an aggrieved person. Refusal to transfer the share certificate was not to the appellant nor he had demanded the same. Therefore, by no stretch of imagination appellant can be called an aggrieved person. He never claimed substantial relief before the Board nor this appeal showed any cause of action arising under Section 111(2) of the Act. This appeal does not raise any question of law by a person aggrieved by the order of the Board. He being neither transferor nor transferee can be called the person aggrieved.
Even otherwise, this appeal is barred by time.
8. The appellant ought to have filed the appeal within sixty days from the date of communication of the decision or order of the Board. The impugned order is dated 6th March,1997 whereas the appeal was filed on 17th May,1997 i.e. beyond the period of sixty days. No explanation has been given for this delay. In fact no application seeking condensation of delay has been filed nor sufficient cause shown in the appeal for condoning the delay.
9. For the reasons stated above, it can be said that this appeal by the present appellant is not maintainable and it is also barred by time. The same is accordingly dismissed.