STERLITE INDUSTRIES LTD., REP. BY ITS CHAIRMAN CUM MANAGING DIRECTOR Vs. RANDIP SINGH CHAUHAN

JUDGEMENT

(1.) Aggrieved by the order in C.D.No.640/2004 on the file of Dist. Forum-III, Hyderabad, the opposite parties preferred this appeal.

(2.) The brief facts as set out in the complaint are that the complainant purchased 125 shares under certificate numbers 00908507 & 01105297-5299 respectively. The complainant submits that he was informed that the shares have been bought back by the opposite party company and hence his shares were cancelled. The complainant did not encash any of the cheques/warrants issued by the buy back offer made by the opposite parties 1 & 2 company in respect of the 125 shares. The complainant did not receive interest and warrants on the 625 debentures issued to him against the shares held on certificate no. R26025. The complainant returned the debenture certificates and unencashed warrants and the cheques and requested the opposite party company to process dematerialization. This request was forwarded to M/s.Gayatri Capital Limited. The complainant sent shares through the opposite party no.3 for dematerialization of shares to opp.party no.1 company. On 19.1.2004 the complainant wrote a letter to Share Pro Services that he does not want to surrender the shares of the opposite party no.1 company in the buy back offer and did not encash the warrants/cheques issued in his favour against buy back proceeds. The complainant received a letter dt.7.2.2004 from M/s.Share Pro Services stating that they are not able to process his request since the shares have been encashed and opposite party no.3 wrote a letter dt.9.3.2004 to the complainant rejecting the request of the complainant for dematerialization of shares. The complainant wrote another letter on 19.2.2004 to the opposite parties calling upon them to restore the original holding shares and also requested that he should get bonus shares as declared on 9.2.2004 by opposite party no.1. This letter was refused by the opposite party. The complainant sent another letter dt.20.2.2004 requesting opposite party no.1 for dematerialisation of 125 shares and opposite party no.1 sent cheques for Rs.1,359.93 ps. and another cheque for Rs.5,439-73 ps. for redemption of debenture cum interest. The opposite parties 1 and 2 have purchased shares at Rs.100/- per share and Rs.50/- converted them into debentures. Each non conventional debentures redeemed in three instalments of Rs.3.50 , 3.50 and 3.00 at the end of 4th and 5th year respectively from the date of allotment of debentures i.e. 6.8.2000 and investor money tied from 4th year to 6th year. The opposite party intentionally held up the amount of the investor. After purchasing the shares of small investors at low rate of interest for Rs.100/- per each share the opposite party converted the shares into company shares by fraudulent buy back offers and have intentionally stopped trading of stock exchange from 13.5.2002 to 1.11.2002 i.e. nearly six months to consolidate their share holding capacity and also to grab the small investors shares at low prices . Some shares were sold at high prices of Rs.1000/- from 10.11.2003 to 5.2.2004 on BSE gaining huge profit at the cost of small investors. Hence the complaint seeking direction to the opposite parties to pay Rs.1,76,250/- towards 125 shares value as on 14.1.2004 and also to pay interest from the date of cancellation of shares till the date of payment and also to allot bonus shares on the 125 shares as allotted by the opp.party company on 9.2.2005 in the ratio of 1: 1 and also to pay Rs.50,000/- towards compensation and to pay costs of Rs.5000/- .

(3.) The opposite parties 1 and 2 filed counter stating that they filed a petition in High Court of Mumbai under Section 392 of Companies Act,1956 for a scheme of arrangements between opp.party no.1 and its equity shareholders for buy back shares and the said scheme was approved and sanctioned by the High Court of Bombay and as per the scheme the share holders were required to send back the duly signed option form to opp.party no.1 in case the share holder do not wish to offer their shares for buy back. The last date for sending back the options was fixed at 21.6.2002. Against the said orders SEBI has preferred an appeal in High Court of Mumbai and while dismissing the said appeal the last date was also extended to 20.10.2002. As per the scheme the share holder was entitled for 5 non convertible debentures against holding of one share and these five non convertible debentures were also redeemed in the month of February 2004 and the option form along with the share repurchase consideration warrant were duly dispatched to the complainant in month of May,2002 and on receipt of this the complainant is required to return the option form duly filled and singed by him on or before 21.6.2002 or within the extended period. The complainant did not bother to return the said option form. The complainant himself annexed a copy of the letter dt.24.5.2002 sent by the opposite party no.1 to the complainant in which the opposite party no.1 clearly conveyed about the said scheme. Hence 125 shares of the complainant were considered for repurchase under the buy back scheme and the said original shares were cancelled and extinguished as per the order of the Honble High court at Mumbai. The complainant is entitled for 625 non convertible debentures and this was duly dispatched to the complainant which have been redeemed in the month of February 2004 and the redemption proceeds were also dispatched to the complainant while sanctioning the buy back scheme. The High Court clearly stated in its order that non receipt of the option form within the stipulated period the holding of the share holders shall automatically be considered for buy back and it is needless to state that on such buy back the shareholding of the share holders will automatically be cancelled. On receipt of the letter dt.19.1.2004 from the complainant, M/s.Sharepro Services replied on 7.2.2004 rejecting the demat request of the complainant on the ground that the shares were already bought back by the company . The limitation of this case started from the letter dt.24.5.2002 and the complainant ought to have filed this case before 24.5.2005 but it had filed beyond limitation and hence they seek dismissal of the complaint.