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Judgment
ORDER
‘Heard’ the Learned Counsel for the ‘Petitioner’/ ‘Appellant’, in IA No. 411/2023 (‘Delay’ in Refiling the ‘Appeal Papers’), in Company Appeal (AT) (CH) No. 40/2023.
According to the ‘Petitioner’/ ‘Appellant’, in the instant ‘Appeal’, the requisite ‘Appeal Papers’, were ‘Re-presented’/ ‘Refiled’, before the ‘Office of the Registry’, with a ‘Delay of 173 days’, in filing the ‘Appeal’.
The ‘Petitioner’/ ‘Appellant’, in Paragraph 2 of the IA No. 411/2023, has come out with reasons among other things that the ‘Appeal Papers’, which were refiled, were returned by the ‘Office of the Registry’, on 12/10/2022 and that the defects were to be cleared, within ‘7 days’, because of certain ‘communication delay’, the ‘Petitioner’/ ‘Appellant’, was not in a position to represent the ‘Appeal Papers’/ ‘Typed set of Papers’ , ‘in time’ and infact, the same were refiled, after curing the defects, on 10/10/2022 and subsequently, on 13/02/2023, ‘Notice’ was received by the ‘Petitioner’/ ‘Appellant’, through post, stating that the ‘Appeal Papers’, were returned on 12/10/2022 and ‘Defects’ were to be cured within the time prescribed therein.
As such, it is submitted that in this process, there has occasioned a ‘Delay’, owing to the fact that it took some time for the ‘Petitioner’/ ‘Appellant’, to make some arrangements, to cure the ‘Defects’, in the ‘Appeal Papers’, and after complying with the same, pointed out by the ‘Office of the Registry’, the ‘Appeal Papers’, were filed, before the ‘Registry’. Hence, there has occasioned a ‘Delay’ of ‘173 days’, in representing the ‘Appeal Papers’, which is neither ‘wilful’ nor ‘wanton’, but due to the aforesaid reasons.
It is to be pointed out that the ‘Delay in Representation’, is a matter between the ‘Petitioner’/ ‘Appellant’, and the concerned ‘Court’/ ‘Tribunal’/ ‘Appellate Tribunal’, as the case may be. Indeed, the ‘Respondent’, has no say in the matter, in the considered opinion of this ‘Tribunal’.
This ‘Tribunal’, on being subjectively satisfied as to the reasons ascribed, on behalf of the ‘Petitioner’/ ‘Appellant’, in Paragraph 2 of the IA No. 411/2023, in Comp App (AT) (CH) No. 40/2023, by adopting a lenient approach, ‘Condones the Delay’ of ‘173 days’, and ‘allows’ the IA No. 411/2023 in Comp App (AT) (CH) No. 40/2023. ‘No Costs’.
‘Heard’ the Learned Counsel for the ‘Petitioner’/ ‘Appellant’, in IA No. 412/2023, in Company Appeal (AT) (CH) No. 40 of 2023.
According to the ‘Petitioner’/ ‘Appellant’, the ‘Free copy’ of the ‘Impugned Order’ in CP/92/KOB/2019, dated 30/06/2022, was made filed on 05/07/2022 and in fact, the ‘Appeal’, ought to have been filed, within ‘45 days’, from the said date, in conformity with Section 421(3) of the Companies Act, 2013.
It is represented, on behalf of the ‘Petitioner’/ ‘Appellant’, the ‘Appeal’, was prepared electronically and filed on 03/09/2022 and in fact, the ‘Physical copy’ of the ‘Appeal Memorandum’, was entrusted with the ‘Petitioner’/ ‘Appellant’, for onward filing at Chennai and the ‘Representative’, took some time in filing the same and that too, only on 19/09/2022 and in this process, there has occasioned a ‘Delay’ of ‘30 days’, which is neither ‘intentional’ nor ‘deliberate’, but due to the aforesaid reason.
Considering the fact that the ‘Delay’ of ’30 days’, in instant Company ‘Appeal’, is within the ‘Condonable Limit of ‘45 days’, as envisaged, under Section 421(3) of the Companies Act, 2013, this ‘Tribunal’, on being subjectively satisfied as to the reasons ascribed, on behalf of the ‘Petitioner’/ ‘Appellant’, ‘Condones’ the delay of ‘30 days’, to secure the ends of ‘Justice’, but without ‘Costs’. Consequently, IA No. 412/2023 in Comp App (AT) (CH) No. 40 of 2023, is ‘allowed’.
The ‘Petitioner’/ ‘Appellant’, has preferred the instant Company Appeal (AT) (CH) No. 40/2023, before this ‘Tribunal’, on being aggrieved against the ‘Impugned Order’, dated 30/06/2022, in CP/92/KOB/2019, passed by the National Company Law Tribunal’, Kochi Bench, Kochi.
The National Company Law Tribunal, Kochi Bench, Kochi, while passing ‘Impugned Order’, in CP/92/KOB/2019 (Filed by the ‘Petitioner’/ ‘Appellant’, under Section 59(1) of the Companies Act, 2013), at Paragraph Nos. 26-29, had observed the following:
Para 26: “We have heard the learned counsel for the Petitioners Shri. Anil D Nair and the learned counsel for Respondent Nos. 1 to 8- Shri Paulose C Abraham through Video Conference and have gone through all the documents produced by both sides. It is true that the petitioner and his wife had subscribed to the Securities of the Respondent Company and invested certain amounts in the Company and that the petitioner was appointed as one of the Directors of the Company. The petitioner’s wife’s holdings were transferred to M/s Malabar Gold Holdings Pvt. Ltd as on 31.03.2018. According to the respondents, there was embezzlement in the Company by the petitioner along with one Mr. Nowfal Sheriff and when this embezzlement was brought out, in order to clear his dues, he has entered into a transfer deed for transferring his shares, which was registered and reported to the Registrar of Companies removing his name from the Register of Members. It is also stated that in connection with the embezzlement, criminal cases are pending before the Civil Court and the Police Crime Branch, Kottayam. The petitioner’s contention is that the transfer documents and deeds were got signed by the Respondents taking him to a closed room and forcibly obtaining his signature.
Para 27: The Criminal Cases taken against the petitioner is presumed to be still pending and no final outcome has come in the cases, as both sides have not stated whether any decision was taken in the Criminal Cases pending.
Para 28: According to the Registrar of Companies, the petitioner as per their record is not a member and shareholder of the Company as per the latest MGT-7 filed by the Company, as he was removed from the Directorship of the Company.
Para 29: For the reasons stated above, we do not want to enter into a final decision in the matter and grant the relief sought for in this Company Petition. It is for the petitioner to prove before the appropriate forum/Court that the documents have been forged and his signatures were taken forcibly to transfer his shares. When a decision in the matter to acquit the petitioner from the charges is taken by the appropriate court, he is at liberty to approach before this Tribunal under Section 59 of the Companies Act, 2013.
and dismissed the main ‘Petition’, but ‘without costs’.
Assailing the ‘Correctness’, ‘Validity’, ‘Propriety’ and ‘Legality’ of the ‘Impugned Order’, dated 30/06/2023, in C.P.(IB)384/7/HDB/2018, passed by the National Company Law Tribunal, Kochi Bench, Kerala, the Learned Counsel for the ‘Petitioner’/ ‘Appellant’, submits that the ‘Impugned Order’ suffers from ‘legal infirmity’, because of the fact that it had not taken into account, the relevant material facts, coupled with the another fact that the original ‘Share Certificates’, are still in the ‘Custody’ of ‘Petitioner’/ ‘Appellant’, and added further, the ‘Appellant’, was not approached with an offer, towards the ‘Transfer of Securities’, nor was ‘Valuation of Securities’, carried out for the purpose of fixing consideration.
At this juncture, the Learned Counsel for the ‘Appellant’/ ‘Petitioner’, points out that the ‘Appellant’/ ‘Petitioner’, was perforced under threat to sign the ‘Blank’ ‘Transfer Deed Forms’ and it is a settled position of ‘Law’ that when the nature of the ‘Impugned Transfer’, was not that of ‘Gift’, consideration towards the same is necessary.
In this connection, the Learned Counsel for the ‘Appellant’ adverts to the decision in Vinayak Vasudeo Sahasrabudhe v. Pentagon Drugs (P.) Ltd., wherein it is observed as under:
“Now that I have held that the factum of gift has not been established, the shares could not have been transferred without consideration even assuming that handing over of blank transfer forms indicated the intention of the petitioner to transfer the shares. Transfer of shares without consideration is null and void and, therefore, the prayer of the petitioner for rectification of the register of members deserves to be granted.”
The other Contention advanced on behalf of the ‘Appellant’, is that the ‘Transfer of Securities’, held by the ‘Appellant’, was done so, without Valuation of the Securities, carried out and also that ‘Fair Value of the Securities’, was to be determined, before the same is transferred and in this regard, reliance was placed in regard to Article 22 of the Respondent’s Company, which points out that prior to the transferring of Shares, ‘Fair Value’ was to be ascertained and there has been a non compliance with the true condition for transfer, will render the transfer void, because of the fact that the same is in negation of the ‘Articles of Association’, of the ‘Respondent’/ ‘Bank’.
It is brought to the ‘Notice’ of this ‘Tribunal’, on behalf of the ‘Appellant’, that in March 2016, he was required to be present, at the Corporate Office at Kozhikode, Kerala, to meet the ‘Respondents No. 3,5,&7’. Also that, according to the ‘Appellant’, he was not lawfully detained in a room for well over 5 hours, without an access to his Mobile phone, nor is friend who had accompanied him, etc. As s matter of fact, the ‘Appellant’, was fastened with the ‘Liability’ of repaying the due sum, despite demonstrating his innocence in the matter. But under ‘Coercion’, he was forced to right down as was directed to him on a Rs. 100 Stamp paper and further he was forced to affix his ‘Signature’ on ‘Transfer Deed Forms’.
Besides the above, the stand of the ‘Appellant’, is that his ‘Signatures’ were obtained on a ‘self-undertaking’, by which he was forcefully required to under take that he would pay a sum of Rs.3.65 Crores, within a month etc.
According to the ‘Appellant’, he lodged a Complaint with Kasba Police’, Kozhikode, through ‘Registered Post’, narrating the illegal detention, faced by him, the threat that was exerted upon him and the ‘Signatures’, obtained through ‘Coercion’. That apart, the ‘Appellant’, was not paid any consideration for the ‘Transfer of Securities’, nor was intimated about the same through any medium.
The clear cut stance of the ‘Appellant’, is that the consent of the ‘Appellant’, was not obtained, which is a Contention precedent for ‘Transfer’. Added durther, the ‘Tribunal’, had not borne in mind, the Ingredients of Section 59 of the Companies Act, 2013, because the same were not fulfilled and that ‘Transfer’, is a ‘Element of Fraud’.
This ‘Tribunal’ has heard the Learned Counsel for the ‘Appellant’/ ‘Petitioner’, in the instant Company Appeal (AT) (CH) No. 40 of 2023, at the ‘Admission’ stage, itself and disposes of the same, without issuing ‘Notice’ to the Respondent’s side.
At the outset, this ‘Tribunal’ points out that a cursory perusal of the ‘Impugned Order’, dated 30/06/2022, in C.P./92/KOB/2019, passed by the ‘Tribunal’, indicates that the ‘Petitioner’/ ‘Appellant’, had subscribed to the ‘Securities’ of the ‘Respondent’/ ‘Bank’ and invested particular/certain amounts in the Company and the ‘Appellant’/ ‘Petitioner’, was appointed as one of the ‘Directors of the Company’.
There is no second opinion of the fact that the Appellant’s/ Petitioner’s wife’s holds were transferred to Mrs. Malabar Gold Holding Private Limited as early as on, 31/03/2018.
It comes to light that the ‘Respondents’, before the ‘National Company Law Tribunal, Kochi Bench’ had come out with a plea that there was ‘Misappropriation’/ ‘Embezzlement in the Company, by the ‘Appellant’, along with Mr. Nowfal Sheriff, and when this was brought out with a view to clear his dues, he had entered into ‘Transfer Deed’. For transferring his shares, which was registered and reported to the ‘Registrar of Companies’ and his name was removed from ‘Register of Members’.
There is no query as to the candid fact, that the Criminal Cases pending before the ‘Competent Court’ and the Crime Bench, Kottayam, in connection with the embezzlement of the amounts, as on date is pending and it is admitted by the Learned Counsel for the ‘Appellant’/ ‘Petitioner’, that as on date, they are pending on the file of the respective Fora. Before the ’Tribunal’, it was brought to the fore that according to the ‘Registrar of Companies’, the ‘Appellant’/ ‘Petitioner’, is not a Member, as per record, and a Shareholder of the Company, recent Latest MGT-7 filed by the Company, seeks he was removed from the ‘Position of Director’ of the Company.
Be that as it may, in the teeth of plea, being taken by the ‘Petitioner’/ Appellant’, that the signatures were taken with ‘coercion’/ ‘force’, to transfer his shares and the averment of ‘Forgery’, was also put forward, before the ‘Tribunal’ and also that when a ‘Liberty’ is granted to the ‘Petitioner’/ ‘Appellant’, to approach the National Company Law Tribunal, Kochi Bench, Kochi, (in terms of the Ingredients of the Section 59 of the Companies Act, 2013), (Rectification of ‘Register of Members), when once he is concluded by the Criminal Court in respect of the Charges levelled against him, then the view arrived at, by the National Company Law Tribunal, Kochi Bench, in C.P./92/KOB/2019, in dismissing the main Company Petition, is free from any legal flaws. Viewed in that perspective, the instant ‘Company Appeal (AT) (CH) No. 40/2023’, fails.
In fine, the instant Company Appeal (AT) (CH) No. 40/2023, is dismissed by this ‘Tribunal’ for the reasons ascribed in this ‘Appeal’. ‘No costs.’