Vimla Yadav, J. - (1.) IN this order I am considering Company Petition No. 22 of 2012 filed by the petitioner under section MA of the Companies Act, 1956 (hereinafter referred to as "the Act") seeking a direction to the respondent -company M/s. Baroda Crystal Glass Works Ltd., to rectify its register of members by inserting the name of the petitioner against 24,795 shares of respondent No. 1 company. The petitioner's case is that 24,795 shares were held by the following persons during their life time in the respondent -company as under:
(2.) THE entitlement of the petitioner to aforesaid shares was adjudicated in Succession Case No. 88 of 2003 by the learned Additional District Judge -III, Patna and on being satisfied a succession certificate dated April 2, 2012, was issued by the aforesaid court. Making a brief statement on the facts of this case, counsel for the petitioner pointed out that admittedly. Late Mr. Nandvandan J. Gor promoted various companies including respondent No. 1 company during his lifetime. He held 16,190 shares in respondent No. 1 company. Late Mr. Nandvandan J. Gor died on November 1, 1956, leaving behind his wife and children, namely Mrs. Sarlaben N. Gor (wife), Mrs. Anila Sinha (daughter) and Mr. Shrish Chandra N. Gor (son). Under a family arrangement, late Mrs. Anila Sinha and late Mr. Shrish Chandra N. Gor relinquished their rights and interest in the estate of late Mr. Nandvandan J. Gor in favour of late Mrs. Sarlaben N. Gor. Apart from holding 1,795 shares of respondent No. 1 company, Mrs. Sarlaben N. Gor also came to hold 16,190 shares of respondent No. 1 company held by late Mr. Nandvandan J. Gor during his life time. Mrs. Sarlaben N. Gor died on April 22, 1984, leaving behind a will dated April 28, 1966, on which probate was granted by the learned District Judge, Patna on September 3, 1991, in Probate Case No. 132 of 1986. As per the aforesaid Will. Mrs. Sarlaben N. Gor bequeathed her entire estate to her daughter Mrs. Anila Sinha and son Mr. Shrish Chandra N. Gor. Late Mrs. Anila Sinha and Mr. Shrish Chandra N. Gor held 600 and 6,210 shares of respondent No. 1 company in their individual capacity. They also came to hold additional 17,985 shares bequeathed by late Mr. Sarlaben N. Gor to them. Mr. Shrish Chandra N. Gor and Mrs. Anila Sinha passed away on January 11, 2003 and January 31,1998, respectively. On their demise, the petitioner instituted Succession Case No. 88 of 2003 on which the succession certificate was issued holding that the petitioner is entitled to 24,795 shares of respondent No. 1 company.
(3.) IT was argued that the respondents cannot refuse rectification in the present matter. The petitioner had made the request for transmission of shares in his name, for the first time, with a letter dated September 15, 2005. The respondents replied with a letter dated October 19,2005, stating that the matter is under consideration for necessary action. Instead of complying with the request of the petitioner for rectification of the register of members, the respondents issued a letter dated December 23,2005, requiring the petitioner to produce a succession certificate. The petitioner thereafter made another request for rectification of register of members vide letter dated September 19, 2009, followed with a letter dated October 6, 2009. The respondents reverted to the petitioner in terms of letter dated October 15, 2009, stating that matter shall be placed before the board of directors in the next board meeting and the petitioner shall be intimated accordingly. It was pointed out that to the surprise of the petitioner, the respondents issued a letter dated January 12, 2010, once again requiring the petitioner to provide the succession certificate. The petitioner responded to the aforesaid letter vide letter dated August 23,2010, requesting the respondents to act on the basis of the final order dated November 4, 2004, passed in Succession Case No. 88 of 2003. Respondent No. 1 company once again wrote to the petitioner on September 27, 2010, to produce the succession certificate and the original share certificates and assuring the petitioner that upon the receipt of the documents, the needful will be done. Thereafter, with great difficulty the petitioner obtained the succession certificate and forwarded the same to respondent No. 1 company vide a letter dated April 15, 2012. Respondent No. 1 company did not give any reply to the letter dated April 15, 2012, issued by the petitioner and hence the present company petition was filed on July 4, 2012. It was argued that the respondents have failed and neglected to send any intimation of refusal to register the shares within 2 months from the date of delivery of intimation for transmission of shares of the petitioner. Reliance was placed upon the judgment passed by the Karnataka High Court in Smt. Kamabai v. Vithal Prasad Co. P. Ltd. reported in : [1993] 77 CC 231 (Kam) which reads as under (page 242): Lastly, it was argued by the respondent's counsel that article 16 of the articles of association provides for refusal to register the transfer of shares, and the directors of respondent -company are, in fact, of the view that petitioner No. 2 is not a responsible person and petitioner No. 1 is a lady not well versed in company matters. It is contended by the petitioners' counsel that these allegations have now been belatedly made to justify their arbitrary action refusing to effect the transmission of shares in the name of petitioners. On October 30, 1988, an application was sent by petitioner No. 1 after the death of her husband. The respondent -company sent a reply as per annexure C, asking the petitioner to produce succession certificate. The succession certificate was produced and along with it the consent letter of petitioners Nos. 2 to 7 giving no objection for transfer/transmission of the shares in the names of the petitioners. The respondent -company thereafter in spite of several reminders, including notice calling upon it to effect the rectification of register of members showing the name of the petitioner as shareholder in place of her deceased husband, Channabasappa, did not take any action. However, the respondent -company by its reply letter dated February 21, 1990, stated that the matter will be placed before the next board of directors. There was no communication thereafter by the respondent -company either accepting or refusing transmission of shares in the names of petitioners. It is seen that the intimation for transmission of shares was given by the petitioners to the respondent -company, on October 30,1988, the respondent -company has asked to produce succession certificate which was produced by the petitioners. Thereafter, the respondent -company by its letter dated February 21,1990, intimated that it would place the matter before the board. But, till today no action was taken by the respondent either to accept or refuse the grant of transmission of shares in the name of the petitioners. Under section 111, the company has power to refuse registration of shares, in pursuance of power under articles of association, but such refusal shall be made within two months of the date of delivery of intimation of transfer/transmission of shares, and send the intimation of refusal to the person giving intimation of such transfer/transmission. In the present case, the respondent has not refused to register the shares, nor sent any intimation of refusal to register the shares within two months from the date of delivery of intimation for transmission of shares. Mere silence by the directors of company may not be acquiescence, but sub -section (2) of section 111 of the Act requires the company to notify the person delivering intimation of transmission of shares, within two months of the refusal to register. Therefore, if two months elapsed, it would be clear that the directors can no longer refuse to register/effect the transmission of shares. Since the respondent -company has not refused to effect transmission of shares, in pursuance of its power under its articles within two months from the date of delivery of intimation of transmission of shares by the petitioners, the directors of respondent -company cannot now refuse the transmission of shares in favour of petitioners.;