IN RE: HINDUSTAN LEVER LTD. Vs. STATE

JUDGEMENT

(1.) IN this order I am considering CP No. 37 of 2011 filed by a partner of the firm under section 111 of the Companies Act, 1956 ('the Act') seeking rectification of the register of members of the R -1 -company, Petitioner's (share broker firm's) case is that on 12th March, 1992 it purchased 1,000 shares on behalf of R -2 and R -3 at Rs. 322.50 per share vide Bill No. 1613. The respondents did not make any payment but R -2 fraudulently filled her name as transferee in the blank transfer deeds given by the petitioner on 24th March, 1992 and lodged the same with the R -1 -company and got the shares registered in her name on 25th March, 1992. As the contract without payment was void, the petitioner issued legal notice to R -1 on 17th November, 1992 to stop transfer of shares and on 5th December, 1992 filed a civil suit for permanent injunction and declaration against R -Nos. 1, 2 and 3. On 18th December, 1992 the civil court directed the respondents to maintain status qua 1,000 shares. Petitioner also filed an FIR No. 114/93 against R -2 and R -3 in which charges have been framed at Tis Hazari Court. It was pointed out by the counsel for the petitioner that on 19th April, 2011, the civil court returned the plaint to the petitioner with liberty to file a petition before the CLB. Hence, this petition was filed before the CLB seeking rectification of register of members for deleting the name of R -2 and in its place the petitioner's name be entered as a member of the R -1 -company. It was pointed out by the counsel for the petitioner that the R -1 has not entered appearance despite service nor has it flied any reply to the CP though before the civil court it admitted that the shares were registered in the name of R -2 and that R -1 is maintaining status quo qua these 1,000 shares. Further, it was pointed out that before civil court R -4 to whom 100 shares are alleged to have been transferred was added as a party, however, R -4 has failed to produce any proof in this regard nor has R -4 filed any reply in the CP, Further, R -5 also claimed that 900 shares had been transferred to him but no proof has been produced, service of notice is 'refused', no reply has been filed.

(2.) RELYING on the case law in John Tinson & Co. P. Ltd. v. Surjeet Malhan : (1997) 25 CFA 3 (SC), it was contended that any transfer of shares without consideration is void. Drawing my attention to the case law in Vishnu Mangtani v. Reliance industries, (2011) 1 Apex Decision 3 (Del.). It was contended that once the matter relates to rectification of the Register of Members, CLB has exclusive jurisdiction, the jurisdiction of civil courts is barred in matters specifically vested exclusively with the CLB.

(3.) REPLYING to the respondents' contention that the petition is barred by limitation, it was contended that this contention is not tenable as the petition has been filed within the limitation period of three years; the petition has been tiled by the liberty given by the civil court, initial time for filing as given in the civil court's order dated 19th April, 2011 was extended up to 9th May, 2011, and the petition was filed on 6th May, 2011; there is no delay as under section 14 of the Limitation Act, 1963 "in computing the period of limitation for any suit the time during which the plaintiff has been prosecuting with due diligence another civil proceeding against the defendant shall be excluded, where the proceeding relates to the same matter in issue and is prosecuted in good faith in a court which, from defect of jurisdiction is unable to entertain it", and it was so in this matter and hence the civil court had granted extended the time for filing of the CP and had allowed the status quo qua 1,000 shares, there is no time limit under section 111A(4), even if there is, the petitioner has filed the petition within the three years' limitation period available in this case.