| The Tax Publishers 2019 TaxPub(CL) 0733 (NCLAT-Del) : (2019) 214 CompCas 0576 COMPANIES ACT, 2013,
Sections 421, 241, 242 & 59, Sections 10FQ, 397, 398,
Though shareholder's mother failed to prove that his son had gifted his shares to her and all due procedure was followed for omitting name of shareholders and entering her name in register of members, thus, NCLT rightly declared transfer of the shareholder's shares to his mother as illegal and the company was directed to rectify register of members by restoring the shareholder's name.
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Appeal from order of Tribunal - NCLT declared transfer of shares as illegal and directed to rectify register of members - Shareholder transferred his shares to her mother by way of gift not proved by evidence - Procedure to omit name of shareholder not duly followed
Shareholder filed petition under sections 397, 398, 108 and 111A against illegal transfer of his shares in his mother name in connivance with his father. Shareholder's mother's raised objection that the shareholder had gifted his shares to her. NCLT declared the transfer of the shareholder's shares to his mother as illegal and the company was directed to rectify register of members by restoring the shareholder's name. The shareholder's mother filed an appeal against the order on the ground that all due procedure was followed for omitting the name of the shareholder and entering her name in the register of members. Held: The shareholder's mother first took defence to claim that in normal and general practice of the company, the shares were transferred by the shareholder to her. Subsequently, she took a defence of handing over of shares with transfer forms to claim that there was gift (without referring to any document) and then took a stand that there was also a gift deed executed. The shareholder's mother failed to produce a single document, which proved that the shareholder gifted his shares to her and due procedures under the Companies Act had been followed regarding change in the register of members. There was no justifiable reason to omit the name of the shareholder and to enter the shareholder's mother name in the register of members. Thus, the NCLT rightly declared the transfer of the shareholder's shares to his mother's as illegal and the company was directed to rectify register of members by restoring the shareholder's name.
REFERRED : Shashi Prakash Khemka (Dead) Through LRs. & Anr. v. NEPC Micon (Now called NEPC India Ltd.) & Ors. (2019) 212 Comp Cas 385 (SC); Ammonia Supplies Corpn. (P) Ltd. v. Modern Plastic Containers (P) Ltd. (1998) 17 SCL 463 (SC); Vasudev Ramchandra Shelat v. Pranlal Jayanand Thakar (1975) 45 Comp Cas. 43 (SC) : 1975 TaxPub(CL) 54 (SC); Life Insurance Corpn. of India v. Escorts Ltd. (1986) 59 Comp Cas. 548 (SC) : 1986 TaxPub(CL) 36 (SC)
FAVOUR : Against the appellant
A.Y. :
IN THE NATIONAL COMPANY LAW APPELLATE TRIBUNAL, NEW DELHI
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