K.L. GOYAL Vs. JAIPRAKASH ASSOCIATES LTD.

JUDGEMENT

(1.) IN this order I am considering CP No. 6/111/2008, filed by Sh. K L Goel and another against Jaiprakash Associates Ltd. and others under section 111A of the Companies Act, 1956 ('the Act') praying for rectification of the register of members of R1 -company with respect to 700 shares of the petitioners in R1 company and issuance of duplicate shares certificates in the name of petitioners, or compensating the petitioners for the aggregate market value of 700 shares.

(2.) THE counsel for the petitioners contended that 1,000 shares of erstwhile jaiprakash Industries Ltd. now named as Jaiprakash Associates Ltd. the respondent No. 1, were admittedly registered in the joint names of the petitioners, i.e., Sh. K L Goyal and Smt. Shashi Goyal under folio No. 0123713 (now numbered 1123713) with distinctive number of shares as 14657758 to 14658757 under share Certificate No. 648250 to 648259. Somewhere in January 1994, the petitioner received a court notice of a Suit No. 1312/1993 titled as Shashinder Yadav v. Jaiprakash Industries Ltd for declaration and injunction of the aforesaid 1,000 shares impleading Jaiprakash Industries Ltd. as defendant No. 1 and the petitioners as defendant Nos. 2 and 3 respectively. In the suit, it was admitted by the plaintiff that the petitioners were registered owners of these shares, out of the said 1,000 shares, 100 shares with distinctive No. 14658658 to 14658757 were stated to be sold by the plaintiff to somebody (the defendant No. 1 in their WS stated the 100 shares to be transferred in the name of Sh. K Rajeshwar Rao), the remaining 900 shares were allegedly lost by the plaintiff on 21st January, 1993. The plaintiff had sought the relief for decree of declaration to the extent that the plaintiff was the owner of subject 900 shares standing in the names of the petitioners in the register of shareholders. The plaintiff had stated in the plaint that the plaintiff contacted and was in touch with the defendant No. 1 and that the defendant No. 1 was threatening him that they would transfer the said shares in the name of the persons other than the plaintiff. It was pointed out that the plaintiff, in spite of his knowledge about ownership of the petitioners of the said shares, never approached the petitioners about the alleged loss of aforesaid shares or for fresh transfer deed of the said shares though he was allegedly in touch with the defendant No. 1. Mr. Rajesh Aggarwal and company from whom the plaintiff allegedly purchased the shares was not impleaded as defendant in the suit. The defendant Nos. 2 and 3 in the suit (petitioners), in their written statement, challenged the legality and validity of the alleged transaction.

(3.) THE counsel for the petitioners contended that the petitioners received from the respondent -company a postal ballot form No.504963 dated 1st March, 2007, related to 100 shares without distinctive number of the shares or the share certificate. The petitioners approached respondent No. 1 for issue of duplicate shares for the said 100 shares which was declined by the respondent -company vide their letter dated 29th March, 2007 stating that the matter was sub -judice and they would not take any action till the decision of the court. That the petitioners got the civil court record related to the aforesaid suit inspected in April 2007 and found that there was an interim stay order on 24th May, 1997, restraining the defendant No. 1 with respect to the aforesaid remaining 800 shares. The petitioners also came to know that the suit was dismissed on 13th April, 1998, for non -prosecution by the plaintiff. On the dismissal of the aforesaid suit, the false claim of the plaintiff did not survive and ownership of the petitioners herein for at least 800 shares reconfirmed. Petitioners reconciled with the loss of 200 shares on account of effort and financial involvement in litigation with two different persons. The petitioners, vide their letter dated 21st April, 2007 sent the copies of the court's order to respondent No. 1 company and request for issue of duplicate shares in their names. The respondent No. 1 -company vide their letter dated 11th May, 2007 declined the request of the petitioners on totally illogical grounds, self -contradictory and contrary to statutory provisions. Contrary to their stand in their WS and their letter dated 29th March, 2007, the respondent -company held that on the basis of a broker's note submitted by the plaintiff in the suit to the company as proof of ownership over the said shares, it was proved that the subject shares had been sold by the petitioners for consideration and the petitioners no longer had any claim over the said shares and that the subject shares were further transferred as and when duly lodged by the claimants. It was stated that the respondent -company even at this stage concealed that the subject 700 shares had already been transferred by them in the name of respondent No. 2 on 15th January, 2000. Legal notice dated 8th June, 2007 sent on behalf of petitioners to the respondent -company was followed by personal approaches and requests to the company but to no avail. The transfer of other 700 shares in the name of respondent No. 2 informed by the respondent -company vide their letter dated 20th August, 2007 was totally illegal, mala fide and fraudulent in collusion and conspiracy between the respondents. The respondent -company along with letter dated 20th August, 2007 also sent to the petitioners, photocopy of some bill No. 2043 dated 9th November, 1992, of some Rajesh Aggarwal & Co. in the name of Sh. Shashinder Yadav and the photocopy of some transfer deed dated 18th December, 1992 related to 100 shares with distinctive Nos. 14658658 -757 under shares certificate No. 648259. The petitioners again approached the respondent -company on 14th November, 2007 stating that they had never sold the subject shares and that they knew neither Rajesh Aggarwal & Co. nor Mr. Rustagi. The respondent -company was requested for issue of duplicate shares for 700 shares. The admitted ownership of the petitioners as registered holder of the subject shares stood reconfirmed on dismissal of aforesaid false suit and the respondent No. 1 -company had no jurisdiction to decide the ownership of the said shares. The transfer of 700 shares by respondent No. 1 in the name of respondent No. 2 was illegal, contrary to the statutory provisions and, hence, fraudulent as the shares could not be transferred unless legal and valid transfer deed by the transferors and the shares certificate in original were submitted to the company. The petitioners, therefore, filed the present petition before this court. The respondent No. 1 -company filed their reply to the petition taking preliminary objection that the petition is barred by limitation, non -joinder/misjoinder of the parties and not maintainable under section 111A of the Act. The respondent -company has made self -contradictory averments in their reply and their stand for transfer of the 700 shares in the name of respondent No. 2 is contrary to their stand in their WS in the suit and also contrary to statutory provisions.