Companies Act Case Law Peerless General Finance & Investment Co. Ltd Vs Poddar Projects Ltd. & Anr

CASE NO.:
Appeal (civil) 5929 of 2005

PETITIONER:
PEERLESS GENERAL FINANCE & INVESTMENT CO. LTD

RESPONDENT:
PODDAR PROJECTS LTD. & ANR

DATE OF JUDGMENT: 13/02/2007

BENCH:
Tarun Chatterjee & Altamas Kabir

JUDGMENT:
J U D G M E N T
ALTAMAS KABIR, J.

Certain shares of the appellant-company were being held
by Poddar Udyog Limited. Under a scheme of arrangement
sanctioned by the Calcutta High Court on 19th August, 1997,
a part of the business division of Poddar Udyog Limited was
transferred to the respondent No.1 herein. On 3rd September,
1999, the respondent No.1, Poddar Projects Limited, sold the
shares to the respondent No.2, Vijaya Finance Corporation
Limited. The said respondent lodged the shares with the
appellant-company herein for registration on 12th November,
2001. The appellant-company refused to register the said
shares on 9th January, 2002 and intimated the advocate for
the respondent No.2 of its said decision.
On 16th May, 2002, the shares were again lodged for
registration on behalf of the respondent No.1-Poddar Projects
Limited, but once again the appellant-company refused to
register the same.
Such refusal led to the filing of an application by the
respondents herein under Section 111 A of the Companies Act,
1956 on 28th October, 2002. The Company Law Board allowed
the application filed by the respondent No.1 herein by
directing the appellant-company to register the original
shares in favour of the respondent No.1, but declined to
grant any relief to the respondent No.2. The respondent No.2
accepted the order and did not prefer any appeal. The
appellant-company being dissatisfied with the decision of the
Company Law Board filed an appeal before the Calcutta High
Court under Section 10F of the Companies Act,1956. Before
the Calcutta High Court, it was submitted on behalf of the
appellant-company that since no transfer deed was delivered
in terms of Section 108 (1A) of the Companies Act, the
lodgment for registration was itself defective and could not,
therefore, be acted upon. It was further submitted that till
such time as the shares were not registered in favour of the
respondent No.1-company, the same could not be registered in
the name of the subsequent transferee, namely, the
respondent No.2 herein. Certain other objections were also
taken regarding cancellation of stamps and the fact that the
transferee was not a desirable person.
The Calcutta High Court negated the submissions made
on behalf of the appellant-company and affirmed those of the
Company Law Board. It is against the said order of the
Calcutta High Court that the instant appeal has been filed.
Although, in the appeal a question was raised as to
whether for registration of transfer of shares effected under a
scheme of arrangement or compromise or amalgamation
sanctioned by a competent court under Sections 391 and 394
of the Companies Act, it is necessary to execute a further
instrument of transfer as contemplated by Section 108 of the
said Act, at the time of the hearing of the appeal, it was
submitted on behalf of the appellant-company that the said
question had been rendered academic. It was submitted that
during the pendency of the appeal, the appellant-company had
complied with the direction of the Calcutta High Court and
had registered the original shares in the name of the
respondent No.1-compnay. Since the respondent No.2 had
not preferred any appeal against the order of the Company
Law Board, the same became final as far as the respondent
No.2 is concerned. Although, on behalf of respondent No.2, it
was submitted that the decision of the Company Law Board,
as applicable to the respondent No.1, would also operate in its
favour, such a submission is not acceptable since the
respondent No.2 stands on a different footing. Till such time
as the shares were not registered in the name of the
respondent No.1, the application of the respondent No.2 for
subsequent registration of the same shares in its name could
not be considered. Accordingly, the direction given by the
Company Law Board in respect of the respondent No.1 could
not apply to the respondent No.2 and that is why the said
respondent No.2 did not prefer any separate appeal against
the order of the Company Law Board.
As pointed out by Mr. Ashok Desai, learned senior
counsel, appearing on behalf of the appellant-company, the
questions raised in the appeal have been rendered academic
having regard to the fact that the appellant-company has
since registered the shares in question in the name of the
respondent No.1-company.
The appeal is, therefore, disposed of as having become
infructuous and the questions raised therein are left open for
decision in an appropriate case.
There will be no order as to costs.

Leave a Comment