M.R. SHAH, J.

1. Feeling aggrieved and dissatisfied with the impugned order passed by the learned Company Law Board dated 26.5.2006 dismissing the said appeal preferred by the appellant herein filed under the provisions of Section 111-A of the Companies Act, 1956 seeking direction against the respondent no.1 Company to register the transfer of 38,04,100 shares in favour of the petitioner, original applicant- Appellant - Mehsana District Central Cooperative Bank Limited has preferred present appeal.

2. The facts leading to the present appeal in nutshell are as under:

2.1. It is the case on behalf of the appellant Bank that appellant lent an amount of Rs. 40 Crores to respondent no.2- Petrofils Cooperative Ltd (hereinafter referred to as "Petrofils") by way of fixed deposits which carried interest @ 18% p.a between 23.11.1995 to 18.02.1996. That the deposits were for the period between 60 days and 90 days. It is the case on behalf of the appellant Bank that against the aforesaid finance deposit of Rs. 40 crores, by way of security, the Petrofils agreed to handover custody of 38,04,100 equity shares of respondent no.1- Gujarat Industries Power Company Limited. According to the appellant, the Petrofils handed over the custody of 5 share certificates which are in respect of 38,04,100 equity shares of respondent no.1 company to one Jashlok Finance Services who as such was broker/agent of the Petrofils. According to the appellant, the said share certificates were handed over to the said Jashlok Finance Services vide letter dated 19.12.1995. According to the appellant, the Petrofils in the year 1997 agreed to create second charge on the fixed assets of Petrofils in favour of the Bank. According to the appellant, the appellant addressed a letter to Jashlok Finance Services to exercise the power of transfer of shares in the name of appellant bank. Accordingly and as per the appellant, Jashlok Finance Service vide letter dated 25.5.1999 sent letter/notice to the Petrofils giving notice of 30 days as required under letter dated 19.12.1995. It appears that thereafter in the month of August 1999, the appellant also filed application for interim injunction.

2.2. It appears that thereafter the Petrofils came to be wound up and liquidator came to be appointed on 11.04.2001. The appellant Bank also filed its claim with the Liquidator of the Petrofils to the extent of Rs. 89.29 crores on 30.01.2001. That the Jashlok Finance Service informed Petrofils that the custody of the equity shares are with the appellant bank. That in the month of June 2005, the appellant filed an application in the pending Special Civil Suit No.758 of 1999 for direction to transfer the shares in favour of the appellant bank. According to the appellant, in its meeting held on 18.07.2005 the Board of Directors of appellant passed a board resolution to take steps for transfer of shares. That thereafter, the appellant bank addressed letter to the MCS Limited, Baroda, the share transfer agents of respondent no.1 along with the letter dated 25.7.2005 and the appellant bank handed over five original equity share certificates together with duly filled in and executed transfer deeds for transfer of 38,04,100 equity shares of respondent no.1 in favour of the appellant.

2.3. That MCS Limited confirmed the receipt of 38,04,100 equity shares for transfer. That the respondent no.1 has refused to register the transfer of the shares in favour of the appellant bank on the following reasons:

"(1). The Shares held by any promoter of the company is covered under the Undertaking to the Term Lending Institutions to the effect that these shares will not be transferred/hypothecated/pledged etc. in favour of any person or entity and Petrofils being one of the promoter has also given such undertaking to the company and hence without prior approval of the term lending institutions the transfer cannot be affected in the favour of any party including you. (copy of undertaking of Petrofils