ESTATE INVESTMENT COMPANY PRIVATE LIMITED Vs. SILTAP CHEMICALS LIMITED

JUDGEMENT

(1.) ESTATE Investment Company Private Limited (hereinafter referred as "the petitioners") have lodged 1,100 shares -- 500 standing in the name of Mr. Om Prakash Roongta and 600 standing in the name of Mr. Harshvardhan Roongta, with Siltap Chemicals Limited (hereinafter referred as "the respondent-company"), vide its letter dated November 18, 1996, for transfer of these shares in their favour which is the subject-matter of Petition No. 41, Likewise, Govindram Brothers Private Limited (hereinafter referred as "the petitioners") have also lodged 1,000 equity shares for transfer in their name which is the subject matter of Petition No. 42. The respondent-company, vide its letter dated December 18, 1996, informed the petitioners that they are unable to proceed with the transfer of shares on the ground that : (a) there were corrections in the material portion of the transfer deeds which were not authenticated by the signature of the transferor, (b) the adhesive stamps affixed were not duly cancelled, and (c) the transferors, apprehending foul play in respect of their shares had requested the respondent-company not to transfer the shares.

(2.) The petitioners' case is that between September, 1994, and May, 1995, the petitioners in the course of their business had advanced diverse sums of money as loans, by cheques. As security for these loans, share certificates of various companies were pledged with the petitioners accompanied by blank transfer forms, duly signed by the transferors. In the event of defaults in repayment of loan these shares along with the transfer forms were to be lodged for transfer, in the name of the petitioners. As there is a default in the repayment of the loan, the aforesaid shares have been lodged accompanied by transfer form on November 18, 1996, for transfer in their name.

(3.) THE respondent-company in its reply has submitted that there appears to be some dispute between the petitioners and O. P. Roongta and Mr. Harshvardhan Roongta, the registered holders, in respect of shares which the petitioners have lodged with the respondent-company for transfer. THEy have further submitted that the transferors have filed a civil suit in the Bombay High Court in Suit No. 1668 of 1998 in respect of the said shares therein seeking certain reliefs including a permanent injunction against the transfer of the said shares and the summons in the said suit have been served upon the company. THE respondent-company has further submitted that they had informed the petitioners since the matter was subjudice in the Bombay High Court and the transfer of the said shares was withheld pending the orders of the High Court. THEy have further submitted that from the pleadings in the said suit it appears that there are allegations of fraud and cheating against the petitioners and the company would not like to be involved directly or indirectly in the matter if such allegations were ultimately found to be true by the court. It is further submitted that in so far as the respondent-company is concerned even the transfer deeds which were first lodged with them in respect of the said shares contained material alterations which were unauthenticated. Subsequently, fresh transfer deeds were lodged in respect of some of the said shares under the signature of the transferor, thus giving some credence to the, transferor's contentions in the said suit which requires going into in detail. In this connection, they invited our attention to the decision of the Board in Bipin K. Jain v. Savik Vijay Engineering (P) Ltd. [1997] 26 CLA 255 ; [1998] 91 Comp Cas 855 (CLB) wherein the Company Law Board held that if complicated questions of law or facts arise in a petition under Section 111 which cannot be adjudicated on the basis of documents made available, but could be decided only on trial by evidence, the Company Law Board should relegate the matter to a suit.