Ownership disputes arising from share registrations and allegations of fraud must be adjudicated, preventing summary rectification processes under Section 59 of the Companies Act.

ORDER

1. The present petition has been filed under Section 59 of The Companies Act, 2013 by the Petitioner namely IND Finance & Securities Trust Private Limited in respect of its 9000 shares held in Rl company i.e.Eicher Motors Ltd. with the following prayers:

(a) To direct the rectification of Register of Members of Respondent No. 1 Company by restoring the name of the Petitioner with 900 Equity Shares with effect from the date on which it was illegally removed;

(b) To direct the Respondent No. 1 Company to deliver all entitlements, such as dividend, right issue, bonus issue or similar entitlements which the petitioner would have been entitled had the name of Brescon (now petitioner Company) not removed from the register of members of Respondent No. 1 Company;

(c) To direct the respondent No. 1 Company to pay compensation for mental harassments and stress undergone by the directors of petitioner in view of illegal transfer of 900 equity shares effected by the Respondent No. 1 Company in favour of Respondent No. 7;

(d) To direct the Respondents No. 1 Company to pay damages for the treatment meted out to petitioner company despite the loyalty shown by not selling its shareholding for last 23 years.

2. The contentions raised by the petitioner are summarised below:

2.1 As per the averments made in the petition the Petitioner purchased 900 shares from Unit Trust of India in 1995 and its name was duly endorsed on each of the share certificates. Previously Petitioner was known as' Brescon Share & Stock Brokers (P) Ltd.' and its name has undergone changes several times since 1995 and it has also been subject of scheme of amalgamation.Brescon was holding 900 equity shares at the time of amalgamation with the petitioner company.

2.2. It was further stated that during 2012, Respondent No. 7 i.e. Sharad Bhagwandas Negandhi approached Respondent No. 1 i.e. Eicher Motors Ltd and Respondent No. 2 i.e MCS Limited for issuance of duplicate share certificate for 1,000 equity shares in Respondent No. 1 Company, which included 900 equity shares held by Brescon. The Respondent No. 7 portrayed himself as a genuine buyer of those 900 equity shares in the stock market, which was purportedly lost by him.

2.3. It is submitted that duplicate shares in lieu of shares held by the Petitioner came to be issued by the R-1 Company without any verification, due care or following the mandatory procedure regarding issuance of duplicate shares. Further no notice or even intimation, at any stage of consideration of the request for duplicate shares at the behest of Respondent no.7, was ever given to the Petitioner. It is, thus, contended that the removal of the name of the Petitioner from the register of members was illegal and contrary to law and requires rectification of the register of members of Respondent No. 1 company.

2.4. It is stated that the following distinctive numbers of share certificates were held by the Petitioner:

It is, thus, claimed that the Petitioner continues to hold the original share certificates.

2.5. It is further stated that duplicate shares issued to a stranger in ex-facie violation of RTI Circular No.1 dated 09.05.2001 of Companies (Issuance of Share Certificates) Rules, 1960 and Companies Act, 1958 and there is a violation of the Rules as Respondent No.I company did not issue any advertisement in the newspaper. Further, there was a complete failure to notify the Stock Exchanges, and no intimation or notice was given to the Petitioner either. No proof has been enclosed