Company Law Board
P.S. Securities Limited And Itc Limited vs Itc Limited And Ors. on 19 January, 2006
Equivalent citations: [2007]137COMPCAS727(CLB), (2006)5COMPLJ406(CLB), [2006]72SCL33(CLB)
ORDER
S. Balasubramanian, Chairman
1. In this petition filed under Section IIIA of the Companies Act, 1956, the petitioner has sought for rectification of register of members of M/s. ITC Limited ("the company") in respect of 300 shares, comprised in share certificate No. 2114933 for 100 shares presently standing in the name of the 3rd respondent, share certificates No. SE/044838 and SE/180842 for 50 shares each presently standing in the name of 4th respondent and share certificate No. 1120219 for 100 shares presently standing in the name of 5th respondent, by substituting the petitioner's name in place of their names in the register of members of the company and also for issue of duplicate share certificates.
2. According to the petitioner, being engaged in the business of trading in shares and securities it purchased the impugned shares from the market, evidenced by Settlement No. 9710 of National Stock Exchange of the payout dated 19.03.97. When the share scripts were sent by courier, the packets containing the certificates were lost by the courier and accordingly, an FIR was lodged. The petitioner immediately informed the company by a letter dated 28.3.97 intimating the loss of the share certificates and requested the company to stop transfer/transmission of the shares. The company by its letter dated 20.5.97, advised the petitioner to obtain a court order to enable the company to stop transmission since it had already received a notice for transfer in respect of shares comprised in share certificate No. 1120219. The petitioner filed a suit in the Court of Senior Civil Judge in Delhi on 01.12.97 and obtained a status quo order on 12.12.97. However, by an order dated 21.2.04, the Civil Judge dismissed the suit on the ground that the civil court had no jurisdiction and accordingly, the present petition has been filed.
3. Except the respondents 1 and 3, other respondents have neither filed any reply nor they were represented during the hearing. In its reply, the company has submitted that 100 shares in share certificate No. 2114933 are standing in the name of the 3rd respondent, 100 shares in share certificate No. 1120219 are standing in the name of the 5th respondent and other 100 shares in share certificates nos. SE/044838 and SE/180842 are standing in the name of 4th respondent. While share certificate No. 2114933 was received from the 3rd respondent for dematerialization on 4.9.98, the share certificate in respect of other 200 shares were being lodged for transfer from time to time. But in view of the status quo order passed by the Civil Court, the company has neither effected dematerialization nor registered further transfer of the impugned shares. The company has also submitted that it would abide by the order of this Board. The 3rd respondent who was not represented during the hearing, has filed a reply stating that it had purchased 100 shares comprised in share certificate no.2114933 and its name was entered in the register of members of the company on 11.4.96 and as such, it is not necessary to be a party to the proceeding. It has further denied all the averments of the petitioner.
4. I have considered the matter. The factum of the purchase of the shares by the petitioner and the loss of the impugned shares is evident by the documents on record. The petitioner has diligently pursued the matter with the police, the company and the Civil Court and presently before this Bench. The respondent nos. 2, 4 and 5 have neither filed any reply to the petition nor were represented in the hearing ascertaining their right to the impugned shares. As far as the 3rd respondent is concerned, it is M/s. Duetschc Bank AC as the custodian of the 3rd respondent has filed a reply. According to them, they became the custodian of the 3rd respondent in July, 1999. In the letter dated 9.4.99, the State Bank of India (SBI), which was the earlier custodian of the 3r respondent, has stated that the shares comprised in share certificate No. 2114933 for 100 shares were sold by them on 6.2.97 and since they were returned by the broker on 15.5.97 under objection, the shares were re-deposited in the account of the 3rd respondent. From the letter of SBI it is evidently clear that the 3rd respondent had sold the shares and therefore has no right or title to the shares. Therefore, the objection of the 3rd respondent for the grant of prayers by the petitioner does not survive. Since the 4th and 5th respondents have not evinced any interest in the shares as is evident from the fact that they have not participated in the present proceeding and that the 3rd respondent had evidently sold the shares and that the factum of the purchase of the impugned shares by the petitioner is established, I direct the company to register all the impugned shares in the name of the petitioner and issue duplicate shares in respect of the same. The company will also release all the benefits like dividend, bonus shares, if any, which has been withheld by the company, to the petitioner. The action by the company should be completed within a month from the date of this order.
The petition is disposed of on the above terms.