C.R. Mehta, Member - (1.) THE petitioner named above along with 9 other petitioners, namely, (1) Joshuha Investments Pvt. Ltd., (2) Virtuous Finance Limited, (3) Tejas Kiran Pharmachem Industries Pvt. Ltd., (4) Family Investments Pvt. Ltd., (5) Viditi Investments Pvt. Ltd., (6) Quality Investment Pvt. Ltd., (7) Virtuous Shares and Investment Pvt. Ltd., (8) Airborne Investments Pvt. Ltd. and (9) Dilip Shantilal have filed these petitions under Section 111A of the Companies Act, 1956 (hereinafter referred to as "the Act") against M/s. Ambalal Sarabhai Enterprises Limited (hereinafter referred to as "the respondent-company"). THE petitioners have prayed for an order against the respondent-company, inter alia, directing it to record and register the transfer of 30,17,767 equity shares of the respondent-company in their favour and return the share certificates relating to the said equity shares duly endorsed in their favour. THE petitioners have also prayed for directions to rectify the register of members to place their name in the register of members in respect of these 30,17,767 shares. THE petitioners have also sought for directions for payment of all dividends that might have been declared in respect of the said shares as well as the bonus, rights and other entitlements in respect of the said shares. Since the subject-matter in all these appeals is the same, all the ten appeals are being disposed of by this common order.
(2.) The above referred to ten petitioners, during the period April, 1997 to October 9, 1997, lodged the above 30,17,767 equity shares of Rs. 10 each of the respondent-company for effecting the registration of transfer in their name. However, the respondent-company failed and refused to record the registration of transfers of the said shares in favour of the petitioners. The respondent-company, vide its letter dated October 14, 1997, conveyed the company's decision to refuse to register the transfers of the said shares alleging that the petitioners have violated the provisions of Chapters II and III of the SEBI (Substantial Acquisition of Shares and Takeover) Regulations, 1997, by acquiring more than the stipulated percentage of shares in concert with others. The respondent-company, however, did not give any particulars with regard to the said alleged stipulated percentage of shares that the petitioners are alleged to have acquired in concert with others and/or the name and identity of persons in concert with whom the shares are alleged to have been acquired by the petitioners. It is further submitted that the respondent-company has not submitted any concrete evidence as to how the above-named petitioners have violated the SEBI Take Over Code. The respondent-company has not submitted the copy of the board resolution whereat the said shares were rejected for registration of transfers. The respondent-company in its reply have submitted that the petitioners were required to comply with the provisions of the SEBI Take Over Regulations, 1997, as also various provisions of the SEBI Act. The respondent-company further submitted that they had already registered the transfer of 4.72 per cent. of the shares in favour of the petitioners and other companies associated with them. According to the respondent-company any further acquisition of shares, if registered, would exceed the 10 per cent. limit as is prescribed in regulation 10 of the said Take Over Regulations. The respondent-company also submitted that some of the petitioners have the same address and telephone numbers. Further, according to the respondent-company, the petitioner companies are associated with their business rivals. Further it is submitted that the constituted attorney of the petitioner-company namely Mr. Ashok I. Bhuta and one of the proposed associate persons Mr. Ashok R. Bhuta whose shares were not registered is of the same identity. The respondent-company further submitted that they have informed the SEBI about the alleged violation of the SEBI Take Over Regulations by the petitioners wherein it has clubbed other entities holding 5,73,706 shares whose transfer has also been refused along with the petitioners.
(3.) IN the counter reply the petitioners denied the allegation made by the respondent-company and requested this Bench to direct the respondent-company to produce the proof. The petitioners also submitted that the respondent-company be put to strict proof to substantiate the averments made about the alleged violation of the SEBI Take Over Regulations. It is further submitted that the board of directors of the respondent-company has not even conveyed any decision of the board of directors of the respondent-company though the statutory period of 60 days as per the Companies Act and the period of 30 days under the listing agreement have expired. It is further submitted by the petitioners that enough time and opportunity was given to the respondent-company to substantiate their allegation about the alleged violation of the SEBI Take Over Regulations but they have failed to do so. The petitioners have also denied the claim of being business rivals of the respondent-company and submitted that the said claim is irrelevant to justify the refusal of transfer of shares and is not covered under the provisions of Section 111A of the Companies Act. The petitioners have also submitted that in arriving at the conclusion of crossing the limit of 10 per cent. as prescribed by the SEBI Take Over Regulations, the respondent-company has falsely and without any basis included the shares acquired by three private limited companies and three individuals as referred to in exhibit B to the reply filed by the respondent-company. No reason or proof is given in support of the clubbing of these parties with the Sun Pharma group. The petitioners have already admitted that they have acquired 9.37 per cent. of the paid up capital along with the persons acting in concert whose names and addresses are furnished to this Bench and to the SEBI. It is further submitted that Mr. Ashok R. Bhuta residing at Samrudhi Apartments, Dadar, Mumbai, who is alleged to have acquired 71,350 (0.11 per cent.) shares and included in the list of alleged persons acting in concert as per exhibit B filed by the respondent-company and the person, Ashok I. Bhuta, residing at Sriram Apartments, Kandivli (West), Mumbai, who has verified this petition and is the duly constituted attorney of the petitioner are not the same persons. It is further submitted that as per the provisions of Section 111A, the petitioners are entitled to have shares registered in their name since the respondent-company being a listed company is bound by the listing agreement and further after taking into account the share transfer provisions of the Companies Act as amended through the Depositories Act, 1996, which is effective from September 20, 1995, the listed company has no right to refuse the transfer of shares as the shares are freely transferable.;