ADESH KAUR versus EICHER MOTORS LIMITED AND ORS.

Citation: [2018] 5 S.C.R. 200 · Decided: 03-07-2018 · Supreme Court of India · Bench: R.F. NARIMAN · Disposal: Appeal(s) allowed

Cited by 1 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

A
B
C
D
E
F
G
H
200
SUPREME COURT REPORTS
[2018] 5 S.C.R.
ADESH KAUR
v.
EICHER MOTORS LIMITED AND ORS.
(Civil Appeal Nos. 19426-19427 of 2017)
JULY 03, 2018
[R. F. NARIMAN AND INDU MALHOTRA, JJ.]
Companies Act, 2013 – s.59 – Rectification of register of
members – On facts, respondent no. 2 issued duplicate shares without
following proper procedure, in favour of impersonator, who in turn
transferred the said shares to respondent no. 8 – Subsequently,
appellant came to know about the fraud and sought issuance of
revalidated fresh share certificate for the said equity shares –
However, the same was not done – Company petition by appellant –
NCLT held that the Company was liable for the acts of their Register
cum Share Transfer agents, and as such there was no reason for
appellant to resort to civil court in order to prove her title – However,
the appellate tribunal holding that since criminal complaint and
SEBI investigation was pending, it was not correct for the tribunal
to exercise its power to rectify the register u/s. 59, set aside the
judgment of NCLT and relegated the appellant to a suit – Correctness
of – Held: Not correct – Tribunal was correct in not relegating the
appellant to any further proceedings since it was a case of fraud
wherein the appellant was the victim, and respondent no. 2 was the
perpetrator – Further, the due procedure of the RTI Circular was
not followed – Thus, the appellate tribunal’s order is set-aside and
that of the tribunal is upheld.
Allowing the appeals, the Court
HELD: The tribunal was absolutely correct in not relegating
the appellant to any further proceedings inasmuch this was an
open and shut case of fraud in which the appellant has been the
victim, and respondent no. 2 the perpetrator. Equally, it is clear
that the due procedure of the RTI Circular has not been followed.
When the duplicate shares were issued, stock exchanges were
not informed and neither was an advertisement in a widely
circulated newspaper issued as the value of the shares were far
[2018] 5 S.C.R. 200
200
A
B
C
D
E
F
G
H
201
greater than Rs. 10,000/-. The appellate tribunal in relegating
the appellant to a further proceeding was not correct. Therefore,
the appellate tribunal’s order is set-aside and that of the tribunal
is reinstated. If respondent No. 8 does not happen to be on the
register at all, then there would be no difficulty whatsoever in
restoring the appellant back to its original position. Even if
respondent No. 8 has been entered on the Register, his name
will have to be deleted in view of the fact that the transfer to him
has been declared to be void in law. The Company is directed to
rectify its register, insofar as the physical share certificates are
concerned, and the concerned depository to rectify the demat
records in accordance with this order. [Paras 8-11][204-B-F]
CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 19426-
19427 of 2017.
From the Judgment and Order dated 29.08.2017 of National
Company Law Appellate Tribunal at New Delhi in Company Appeal
(AT) Nos.176 and 177 of 2017.
Mr. K. V. Viswanathan, Sr. Adv., K. V. Balakrishnan, S. M.
Sundram, Ravi Raghunath, K. V. Mohan, Advs. for the appellant.
Mr. Tushar Mehta, ASG, Mr. Shyam Divan, Sr. Adv., Anoop
Dawar, Rajesh Ranjan, Sumit Teterrwal, Pratap Venugopal, Ms. Surekha
Raman, Ms. Niharika, Ms. Kanika Kalaiyarasan, M/s. K. J. John and
Co., Bharat Singh, Arvind Kumar Sharma, Ms. Swati Ghildiyal, Mukesh
Kumar Maroria, Advs. for the respondents.
The Judgment of the Court was delivered by
R. F. NARIMAN, J.  1. The present case discloses a very sordid
state of facts.
2. The appellant before us is a resident of Punjab, and had acquired
in all 903 equity shares in the respondent No. 1-Company.  This acquisition
took place way back in the year 1994-95.
3. It appears that sometime in 2012, another Ms. Adesh Kaur,
who is a resident of Mumbai impersonated the appellant and requested
respondent No. 2 to change the address from Punjab to Mumbai.  It is
not disputed before us that the standard procedure to be followed was
not followed by respondent No. 2, and the aforesaid change of address
ADESH KAUR v. EICHER MOTORS LIMITED
A
B
C
D
E
F
G
H
202
SUPREME COURT REPORTS
[2018] 5 S.C.R.
was despite the requirements of Circular No. 1 dated 09.05.2001.  The
impersonator then went on to execute an indemnity bond by forging the
appellant’s signature for issue of duplicate share certificates of the 903
equity shares mentioned above.  This being done, on 28.09.20

Excerpt shown. Read the full judgment & AI analysis in Lexace.