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2026 Supreme(Online)(NCLT) 2981
NATIONAL COMPANY LAW TRIBUNAL
Sunil Kumar Aggarwal, Judicial Member, Radhakrishna Sreepada, Technical Member
Kamalapuri Narasimaih Jayalakshmi – Appellant
Versus
Vistara Media Private Limited – Respondent
C.P. No. 74/BB/2025
For the Appellants/Petitioners: Chethan Kumar
For the Respondents: Shiv M. V
A company is legally obligated to register a share transfer once valid consideration is paid and transfer documents are duly executed. In the absence of evidence regarding repayment or statutory prohibitions, the refusal to record the transfer in the register of members is unsustainable.
Headnote:(A) Companies Act, 2013 - Section 58 - Refusal to register transfer of shares - Petitioners acquired shares for valid consideration through banking channels - Duly executed transfer forms and share certificates were delivered - No evidence of repayment of consideration or statutory restrictions on transfer - Refusal to register transfer is unjustified. (Paras 5.1, 5.2, 5.4, 5.5)
(B) Corporate Law - Share transfer - Duty of company to register transfer - Once valid consideration is paid and transfer documents are executed, company is obligated to record the transfer in the register of members - Refusal without valid legal basis is unsustainable. (Para 6.1)
Facts of the case:
Petitioners invested substantial funds in a company and were issued share transfer forms and certificates. Subsequently, the company and its directors refused to register the transfer, citing alleged repayment of funds and government restrictions, neither of which were substantiated by evidence.
Findings of Court:
The court found that the consideration was paid through banking channels, the transfer forms were duly executed, and the company failed to provide any evidence of repayment or valid legal restrictions on the transfer.
Issues: Whether the refusal to register the transfer of shares was legally justified, whether the consideration was valid, and whether there were any statutory restrictions on the transfer.
Ratio Decidendi: Where a valid transfer of shares has occurred for consideration, supported by executed transfer forms and share certificates, the company is legally obligated to register the transfer. In the absence of evidence regarding repayment or statutory prohibitions, the refusal to register is invalid.
Result: Petition allowed.
| Table of Content |
|---|
| 1. petitioners' claims of valid share purchase and subsequent breach of transfer obligations. (Para 1 , 2 , 3 , 4) |
| 2. mandatory directive to register valid share transfers absent legal impediments. (Para 6) |
Per RADHAKRISHNA SREEPADA, Member (Technical):
1. This Petition is filed by Smt. Kamalapuri Narasimaih Jayalakshimi &
Shri. Krishna Karthik Darshan (hereinafter referred to as ‘Petitioners’) on 16.06.2025 under Section 58 of the Companies Act, 2013 for seeking the following reliefs:
i) Direct Respondent No. 1 to 7 to enter the names of the Petitioner No.1 and 2 in the register of members of the Respondent No.1 Company.
ii) Direct the Respondent No. 2 to 6 to make the Petitioner No.1 and 2 to be joint signatories to the bank account.
iii) Pass such other or further reliefs as this Hon’ble Tribunal deems fit in the circumstances of this case in the interest of justice and equity.
2. Submissions made by the Petitioners: The facts of the case as mentioned in the petition are as under:
1. The Respondent No.1 Company was duly incorporated under the provisions of the Companies Act, 2013, bearing Corporate Identification Number (CIN) U92419KA2021PTC154253, in the name and style of M/s Vistara Media Private Limited, having its registered office at No. 1, 2nd Floor and 4th Floor, Indian Express Building, Queens Road, Bengaluru – 560001, and is engaged in the business of media and news broadcasting. The present authorised share capital of the Respondent No.1 Company is Rs. 55,00,00,000/-, comprising Rs. 34,60,00,000/- towards equity share capital and Rs. 20,40,00,000/- towards preference share capital.
2. The Respondent Nos.1 to 6 represented to and persuaded the Petitioners and Mr. K. G. Krishna (husband of Petitioner No.1 and father of Petitioner No.2) that the Respondent No.1 Company had gained substantial popularity over the past three years since its incorporation and assured them of promising returns in the near future. The Respondent Nos.1 to 6 further represented that an investment of approximately Rs. 15 Crores was required to render the Respondent No.1 Company profitable and, on the basis of such representations and assurances, induced the Petitioners to make investments in the Respondent No.1 Company.
3. The Respondent Nos.1 to 6, with the intention to induce the Petitioners, represented that the Respondent No.1 Company was in urgent need of funds to meet its immediate operational requirements, including payment of salaries of approximately 300 employees, up-linking charges, DTH/Cable operator fees, rent, and other recurring expenses. It is submitted that the Respondent Nos.1 to 6, both through personal meetings and telephonic communications, persuaded and convinced the Petitioners to invest in the Respondent No.1 Company.
4. Respondent Nos.2 to 6 were Directors and/or Shareholders of the Respondent No.1 Company. Respondent No.5 Company, namely Mysore Mercantile Company Limited, holds approximately 34.54% shareholding in the Respondent No.1 Company. It is submitted that Dr. Halady Srinivasa Shetty, Managing Director of Respondent No.5 Company, through telephonic calls and personal meetings, induced and persuaded Mr. K. G. Krishna (husband of Petitioner No.1 and father of Petitioner No.2), as well as the Petitioners, to invest in the Respondent No.1 Company. The Directors and Shareholders of the Respondent No.1 Company, i.e., Respondent Nos.2 to 6, collectively induced and persuaded the Petitioners to make investments in the Respondent No.1 Company.
5. In order to further inspire the confidence of the Petitioners, the Respondent Nos.1 to 6 convened an urgent meeting of the Board of Directors on 24.08.2024, pursuant to which Smt. Kampalapura Narasimhaiah Jayalakshmi (Petitioner No.1) was appointed as an Additional Director of the Respondent No.1 Company and Sri. Kampalapura Guligowda Krishna (husband of Petitioner No.1 and father of Petitioner No.2) was appointed as the Chief Executive Officer of the Respondent No.1 Comp
