VIDYA PRIMLANI Vs. ITC LTD.

JUDGEMENT

(1.) THE Petitioner filed this petition under Section 111 A read with Section 111(4) of the Companies Act, 1956 ('the Act'), seeking rectification of the entries of register of shares of the company in her name being the legal heir of the deceased shareholders, i.e., her father, namely, Parmanand T. Lalwani, and her mother, namely, Vishni P. Lalwani, and a relief to declare the entries of 1,640 shares under Folio No. 20/26771 for and 3,280 shares under Folio No. 20/ 26773 in the name of the second Respondent as null and void, for they were previously standing in the name of her father Parmanand T. Lalwani under Folio No. 12/1014.

(2.) THE case of the Petitioner is that her father and mother held 492 shares of Rs. 10 each under Folio No. 12/1015 and in Folio No. 12/1014 in the first Respondent -company, by reason of splitting, shares in each of the folios became 4,920 shares. Since her father and mother expired in the year 1994 and 1990, on 18th January, 2006, the Petitioner wrote a letter to the company indicating those two folios held jointly by her parents, thereby requesting the company to give particulars as to the status of the said shares and not to transfer or demat the shares in the name of anybody. Responding to the same, Respondent No. 1 -company wrote back to the Petitioner on 20th January, 2006, that the split share certificates were despatched by registered post to her father on 22nd October, 2005, itself. It is also further informed that out of those 4,920 shares lying in the name of the Petitioner's father, 1,640 shares comprised in share certificate No. 95754 bearing the distinctive numbers 2528020236 -2528021857 had been lodged with the company for transfer on 22nd December, 2005, along with a duly executed transfer deed complete in respect for transfer in favour of the second Respondent, viz., Sanjay Kumar Taneja. Since the signature of the transferor on the transfer deed being matched with the specimen signatures on record, the shares were transferred and registered in the name of Respondent No. 2 under Folio No. 20/ 26771, accordingly, new share certificate No. 135376 was despatched to Respondent No. 2. Since Respondent No. 2 lodged the very 1,640 shares with the company through the ICICI Bank for demat on 19th January, 2006, but the same was not given effect due to the Petitioner's letter dated 18th January, 2006. As to the remaining 3280 shares in Folio No. 12/1014 comprised in share certificate No. 29542 bearing the distinctive Nos. 4918217 -49185450 had also been lodged with the company on 13th January, 2006, for transfer along with the executed transfer deed in favour of Respondent No. 2, the signature of the transferor in the transfer deed being matched with the specimen signature on record, the transfer has been effected in the name of Respondent No. 2, accordingly, new share certificate bearing No. 135902 was issued in favour of Respondent No. 2. However, it was also withheld due to the Petitioner's letter dated 18th January, 2006. The letter written by the company was marked as annexure P4. Again the Petitioner on 30th January, 2006, wrote another letter to the company requesting for transmission of shares of her parents by deleting the name of Respondent No. 2, to which the company wrote a letter on 7th February, 2006 (annexure P5) informing that 4,920 shares in Folio No. 12/1015 could be transmitted in favour of the Petitioner on producing the requisite documents, whereas to the shares in Folio No. 12/ 1014 an order from the competent court is necessary. Following annexure P5, the Petitioner deposited the documents (annexure P6) for transmission of shares in Folio No. 12/1015 in her favour ; accordingly, the company transmitted those 4,920 shares in Folio No. 12/1015 in the name of the Petitioner. The company wrote a letter (annexure P7) dated 31st August, 2006, refusing to transmit shares in Folio No. 12/1014. Thereby the Petitioner challenged the transfer made in favour of Respondent No. 2 as illegal, null and void, because the parents of the Petitioner expired in the year 1994 and 1990, thereby the question of her parents signing on the transfer deed on 22nd December, 2005 and matching the signatures on the transfer deeds with the specimen signature on record would not arise. The Petitioner further alleged that the company also illegally and fraudulently transferred new share certificate No. 135376 bearing distinctive numbers in the name of Respondent No. 2. Despite the company was put to the notice of all these things long prior to transfer, the company, knowing pretty well that the transfer of shares to Respondent No. 2 is in violation of law, transferred the shares to Respondent No. 2. Thereby, the Petitioner submits that she alone is entitled for transmission of shares in her name, the transfer purportedly had taken place in favour of Respondent No. 2 is manifestation of fraud, in view of the same, she filed this petition stating that the other legal heirs of her parents, i.e., her sister Sheela T Mansukhani and her brother Gulu P Lalwani relinquished their entitlement to the shareholding in this company lying in the name of her parents by filing affidavits and also deed of relinquishment entitling her to ownership rights to the disputed shares, hence, sought rectification in her name.

(3.) AS to Respondent No. 1, he addressed to this Board informing that the shares transferred in his name was brought to him in physical form by Ms. Renu Ashok Lalwani, daughter of Ashok Lalwani and grand daughter of parents of the Petitioner for a loan against the above said 4,920 shares. Then he clarified to her that he could not provide any loan against the shares unless they were transferred in his name when shares came back transferred in his name, he sent the same to the company for dematerialisation, then only received a letter from the company and came to know that the parents of the Petitioner had already died, thereby submits that he has no objection if the shares are reverted back in the name of the original shareholder and he will have no claim over the same shares in future and abide by the decision of the first Respondent -company or this Board.