SASHI PRAKASH KHEMKA Vs. NEPC MICON LIMITED

JUDGEMENT

(1.) IN this order, we are dealing with the preliminary objection raised in the company petitions--C. P. No. 20/111/SRB/97 and C. P. No. 4/111/ SRB/98--filed under Section 111A of the Companies Act, 1956 (hereinafter referred to as "the Act"), against NEPC Micon Limited and NEPC Agro Foods Limited (hereinafter referred to as "the companies") with regard to the maintainability of the petitions. The petitioners are seeking rectification of the register of members, share transfer register and index of members of the companies in respect of the impugned shares including the rights issue and fully convertible debentures said to have been renounced by the petitioners.

(2.) Shri A. K. Mylsamy, appearing on behalf of the companies, submitted that Section 111A(2) provides remedial measures in case of refusal by a company to register the transfer of shares without sufficient cause within two months from the date of lodgment of the instrument of transfers. The Company Law Board may assume jurisdiction under Section 111A(3) for rectification of the register of members or records of a company provided the transfer is in violation of the provisions of the Securities and Exchange Board of India Act, 1992, or the Regulations made thereunder or the Sick Industrial Companies (Special Provisions) Act, 1985, or any, other law for the time being in force and an application is made by a depository, company, participant or investor or the Securities and Exchange Board of India within two months from the date of lodgment of the instruments of transfer with the company. This provision is not applicable in the case of a person whose name has been omitted in the register of members. By virtue of Section 111(4)(a)(ii), if the name of a member is omitted from the register without sufficient cause, the person aggrieved or any member of the company may apply to the Company Law Board for rectification of the register. But Section 111A does not contain a similar provision. Consequently, the Company Law Board has no jurisdiction to entertain a petition with regard to the name of a person being entered in the register and without sufficient cause is omitted therefrom. In the instant case, the petitioners are challenging the transaction which relate to the years 1992, 1993 and 1994. Even if the provisions of Section 111A are held to be applicable, the petitioners failed to approach the Company Law Board within two months from the date of transfer of the impugned shares. The Company Law Board has no power to condone the delay especially when the period of two months has been fixed by the statute.

(3.) IN the circumstances, Shri Mylsamy submitted that the Company Law Board cannot entertain the petitions under Section 111A of the Act and that the petitions are liable to be dismissed.