VIJAYA FINANCE CORPORATION LTD. Vs. PEERLESS GENERAL FINANCE & INVESTMENT CO. LTD.

JUDGEMENT

(1.) IN this order I am considering CP No. 991(111A)/2011 filed by the petitioner, viz., Vijaya Finance Corporation Ltd., under section 111A of the Companies Act, 1956 ('the Act'), praying for a direction upon the respondent -company, viz., the Peerless General Finance & Investment Co. Ltd., to rectify the register of members and other necessary books of the respondent -company by including therein the name of the petitioner, viz., Vijaya Finance Corporation Ltd., in respect of 2,18,240 equity shares of the respondent -company. Briefly stated, the facts of the case are that one Poddar Udyog Ltd. ('Udyog') held 2,18,240 shares of the respondent -company. By an order dated 19th August, 1997, Calcutta High Court sanctioned a scheme of arrangement by virtue of which a part of the business division of Udyog was transferred to Poddar Project Ltd. ('Project') which included the subject shares. On or about 3rd September, 1999, Project sold the aforesaid shares to Vijaya Finance Corporation Ltd. ('Vijaya') for a consideration of about Rs. 41.46 lakh by executing relevant transfer instruments. Project also executed power of attorney dated 30th July, 2001 in favour of Vijaya to exercise all rights in respect of the impugned shares and executed share transfer forms on 10th November, 2001 in favour of Vijaya. By a letter dated 12th November, 2001, Vijaya lodged the share certificates along with the instruments of transfer with Peerless for registration of transfer in favour of Vijaya. Peerless refused to register such transfer by a letter dated 9th January, 2002. Thereafter, by virtue of the power of attorney, Vijaya again lodged the share certificates along with the order of hon'ble Calcutta High Court sanctioning the scheme, seeking for registration of shares in the name of Project. The respondent -company refused to register the said shares in the name of Project by a letter dated 8th August, 2002. As a result, a petition being CP No. 316(111A)/2002 was filed by petitioner company jointly with Project under section 111A of the Act before Company Law Board ('CLB'), Kolkata Bench, praying, inter alia, for rectification of the register of members of the respondent -company by including therein the names of Poddar Project Ltd. and Vijaya Finance Corporation Ltd., respectively. The CLB by an order dated 29th October, 2004 disposed of the said petition by directing registration of the shares in the name of Project Ltd., but refusing the prayer for registration in the name of Vijaya on the ground that the instruments of transfer of shares executed by Poddar Project Ltd. in favour of Vijaya Finance Corporation Ltd. were executed at a point of time when Poddar Project Ltd. was not on the register of the respondent -company in respect of the shares in question. The respondent -company preferred an appeal against the said order of the CLB, Eastern Region Bench, Kolkata, under section 10F of the Act before the hon'ble High Court at Kolkata, against the direction of CLB to register the name of Poddar Project Ltd. in respect of the subject shares, but no appeal was, however, moved by the present petitioner against the refusal of CLB to direct registration of the shares in the name of the petitioner. The said appeal was dismissed by Calcutta High Court. The respondent -company moved the hon'ble Supreme Court by way of special leave petition ('SLP') under article 136 of the Constitution of India. However, pursuant to an interim order passed in such SLP, shares were registered in the name of Poddar Project Ltd. and the appeal before hon'ble Supreme Court of India was finally disposed of on the basis that the appeal had become infructuous by reason of registration of the shares in the name of Poddar Project Ltd. during the pendency of the appeal. An application was moved in the said appeal by Vijaya Finance Corporation Ltd. for a direction to register its name in the share register of the respondent -company which was dismissed. The said decision of Supreme Court of India has been reported in : [2007] 2 SCC 431.

(2.) THEREAFTER , on 2nd May, 2007, the shares in question were again lodged on behalf of the petitioner for registration of its name in the books of the respondent -company. The aforesaid request for registration of shares was refused by a letter dated 25th June, 2007 issued by the respondent -company. In this regard, it is worth mentioning that the impugned shares were lodged on 2nd May, 2007 on the basis of share transfer forms which were executed on 10th November, 2001 with a revalidation by Registrar of Companies ('RoC') under section 108 of the Act till 17th April, 2007. No proceeding was instituted by the petitioner regarding the said refusal on 25th June, 2007 till the filing of the present petition on 31st October, 2011.

(3.) AS regards the refusal of the respondent -company dated 25th June, 2007 to register the subject shares in the name of the petitioner in the register of members of the respondent -company, the petitioner has mentioned about the following grounds of refusal: