ADVANSYS (INDIA) PRIVATE LIMITED, SHRI PANKAJ INDER BALWANI, SMT. SHAKUNTALA BALWANI AND SMT. JAANHVI BALWANI Vs. PONDS INVESTMENT LIMITED AND M/S. THAKUR VAIDYANATH AIYAR & CO.

JUDGEMENT

(1.) I : Summary of the Dispute

(2.) This is the issue to be decided in this company appeal, one that was admitted on 18th March 2013. The appeal is directed against an order dated 14th January 2013. By that order, the Company Law Board directed original respondent Nos. 2 to 4 (the present appellants) to issue the original 7.5 lakh share certificates of Rs. 10/- each in the original 1st respondent company (the 1st appellant here) duly stamped and sealed to the petitioner (the present 1st respondent). Those respondents (the present appellants) were directed to rectify the register of members by inserting the name of the original petitioner and to inform the competent authorities.

(3.) By the Companies (Amendment) Act 1988 (effective 31st May 1991; "the 1988 Amendment"), Section 111 of the Companies Act was extensively amended. Clause 16 of the Companies (Amendment) Act sets out the purpose of this amendment. The amended Section 111 assimilated the provisions of the earlier Section 111 and Section 155 and conferred the powers of the Court under the unamended Section 155 on the Company Law Board. Sections 155 and 156 of the unamended Act were altogether omitted by the 1988 Amendment. Clause 16 of the 1988 Amendment said that the purpose of the amendment was to recast existing Section 111 by incorporating in it the provisions of Section 155. This conferred power on the High Court to order rectification of the register of members. The purpose and intent the amendment was to provide sufficient protection to investors against an unlawful refusal to register a transfer of shares. Therefore, the amended section also requires the companies to give reasons before refusing any such transfer. Rights were conferred on the aggrieved investor to apply for relief to the Company Law Board (instead of the High Court), on specified grounds.