ORDER
K.K. Balu, Member
1. This petition is filed under Section 111A of the Companies Act, 1956 (“the Act”) against the Registrar of Companies, Andhra Pradesh, Hyderabad (“the ROC”), M/s Dr. Reddy’s Laboratories Limited (“the Company”) and others seeking the following reliefs:
(i) to set aside the order dated 09.02.2004 made by the ROC in relation to 200 shares of the Company bearing share certificate Nos. 180771 and 180772;
(ii) to cancel the transfer of 100 shares comprised in share certificate No. 180772 made in favour of the respondents 3 to 5; and
(iii) to issue duplicate share certificate in respect of 100 shares comprised in share certificate No. 180771 in lieu of the original shares reportedly lost by the petitioner.
2. Shri P. Ravindranath Naidu, the learned authorised representative submitted: The petitioner had purchased the impugned shares from Smt. Sunita Agarwal and Pradeep Agarwal, which were duly transferred in her favour in September, 1994 by the Company. The petitioner neither sold any shares to the respondents 3 to 7 nor received any consideration from them. However, the original share certificates were stolen on 20.07.1995, as borne out by the first information report lodged with the Police Station, Aliganj, Lucknow (Annexure-A4). Despite the claim for the duplicate share certificates and the repeated requests made in writing (Annexures-A5, A6 & A7) and the letter dated 01.08.1996 that the Company shall not approve any transfer of the impugned shares at any point of time, the Company advised the petitioner by a letter dated 09.08.1996 (Annexure-A8) that it had already transferred 100 shares covered by share certificate No. 180772 in favour of the respondents 3 to 5; that the Company had received the original share certificate No. 180771 in respect of the remaining 100 shares together with the transfer form from the respondents 6 & 7 and further that in the absence of any order from a competent court of law restraining the Company from transferring the shares in favour of the respondents 6 & 7, the Company would transfer the said shares in the name of the respondents 6 & 7. According to the petitioner, she never executed any transfer form in favour of anyone including the respondents 3 to 5 and 6 & 7. The signatures contained in the share transfer forms are forged and fabricated. When the petitioner obtained an order of interim injunction in Regular Suit No. 448/1996 on the file of the Civil Judge (Junior Division) South, Lucknow, restraining the Company from registering the transfer in respect of 100 shares comprised in certificate No. 180771 the Company returned back the original share certificate and the transfer form to the respondents 6 & 7, without effecting registration of the transfer in their name. However, the civil suit came to be dismissed on the ground that the ROC is the competent authority to give appropriate directions for issuance of duplicate share certificates. When the ROC did not accede to the petitioner’s request, she approached the High Court of Allahabad for issue of a writ of mandamus to the ROC to make an enquiry in the subject matter, wherein the High Court by an order dated 23.10.2003 directed the ROC to dispose of the complaint of the petitioner in regard to the issue of duplicate share certificates in lieu of the original shares lost by her, upon which the ROC afforded an opportunity of hearing to the parties and directed the Company on 09.02.2004 to issue the duplicate share certificate in respect of 100 shares comprised in certificate No. 180771 after giving further opportunity of hearing to the respondents 6 & 7, but upheld the transfer of 100 shares covered by certificate No. 180772 in favour of the respondents 3 to 5. This order of the ROC confirming the transfer in favour of the respondents 3 to 7 is liable to be set aside, in view of the fact that the Company had effected the transfer of 100 shares in favour of the respondents 3 to 5 in spite of the repeated protests made by the petitioner. In regard to the issue of duplicate share certificate relating to 100 shares comprised in share certificate No. 180771, there was no need for the ROC to direct the Company to afford yet another opportunity to the respondents 6 & 7, before issue of the duplicate share certificate in favour of the petitioner. Shri Ravindranath Naidu, therefore, sought for the reliefs as claimed in the company petition.
3. According to the ROC, the High Court of Allahabad, Lucknow Bench, Lucknow, by an order dated 23.10.2003 in the writ petition (W.P. No. 5392/2003) filed by the petitioner against the Company and others directed him to make an enquiry in relation to the issue of duplicate share certificates in lieu of the original shares lost by the petitioner on the complaint made by her, upon which the ROC conducted an enquiry after affording sufficient opportunity to the interested parties and after taking into account the evidence submitted in support of the claim made by the parties finally adjudicated the matter by an order dated 09.02.2004. In these circumstances, the petitioner, if aggrieved, ought to have approached the High Court of Allahabad by preferring an appeal to set aside the enquiry order made by him. The CLB does not have any jurisdiction over the present subject matter and therefore, the company petition is liable to be dismissed.
4. Shri B. Ravi, the learned authorized representative of the Company urged that the company petition filed under Section 10E, but not under Section 111A without satisfying the requirements of regulation 14(1), (5) & (7) of the Company Law Board Regulations, 1991 and without supported by an affidavit in accordance with regulation 14, is liable to be dismissed in limini as held by the CLB in Duroflex Ltd. v. Johnny Mathew (C.A. No. 56/2003 in CP No. 18/2003). The petitioner, if aggrieved by the order dated 09.02.2004 of the ROC ought to have agitated his grievances before the High Court of Allahabad and therefore, the company petition must be dismissed for lack of jurisdiction. The petitioner failed to disclose particulars of the civil suit filed by her in Regular Suit No. 448/1996 on the file of the Civil Judge (Junior Division), Lucknow, which came to be dismissed as early as on 12.12.2002, and thus she is guilty of suppression of these material facts in the company petition, disentitling her for any relief. The records of the Company reveal that the petitioner had purchased 200 shares impugned in the company petition from Ms. Sunita Agarwal jointly held with Pradeep Agarwal, upon which the Company had effected on 17.08.1994 registration of the transfer in respect of these shares in favour of the petitioner jointly with G.D. Bhageria. The Company is unaware of the alleged theft of the share certificates as claimed by the petitioner. The Company never received any registered letter dated 21.07.1995 together with copy of the FIR said to have been forwarded by the petitioner. The purported complaint does not bear any date or acknowledgement by the police officials. The Company neither received the communications dated 25.09.1995 and 16.11.1995 from the petitioner demanding the duplicate share certificates as claimed by her. The Company had, however, received the communication dated 01.08.1996 of the petitioner in response to which the Company had advised the petitioner by a letter dated 09.08.1996 that 100 shares comprised in the share certificate No. 180772 were already transferred in the name of the respondents 3-5 and further advised that the Company had received 100 shares comprised in the share certificate No. 180771 for transfer in the name of the respondents 6 & 7, making it absolutely clear that in the absence of any restraint order from a competent court of law, the Company would be compelled to effect the transfer of 100 shares in favour of the respondents 6 & 7. According to the Company, it had received the share transfer form duly signed, stamped and properly executed for transfer of 100 shares covered by certificate No. 180772 in favour of the respondents 3 – 5 as early as in the month of March, 1996 prior to the first communication, viz., 01.08.1996 received from the petitioner. The share transfer form in respect of these shares was in order in all respects and therefore the Company following the established practice and procedure had transferred 100 shares covered by share certificate No. 180772 in the name of the transferees. The whole procedure, was completed before receipt of the communication dated 01.08.1996 from the petitioner. Shri B. Ravi, Authorized Representative pointed out that the shares were sold through the share brokers registered with the Securities and Exchange Board of India and that the petitioner did not choose to make any complaint before SEBI in regard to the disputed sale of shares by the petitioner. Nevertheless, the Company upon receipt of the restraint order made by the Civil Judge (Junior Division) South, Lucknow from effecting registration of the transfer of 100 shares in favour of the respondents 6 & 7 had returned the original share certificate No. 180771 and the share transfer form in favour of the respondents 6 & 7 without effecting the transfer in their names. In the meanwhile, the ROC, under the order of the High Court of Allahabad in a writ petition filed by the petitioner, after conducting a detailed enquiry by an order dated 09.02.2004 directed the Company to issue the duplicate share certificate in lieu of the original share certificate bearing No. 180771 for 100 equity shares, after affording “once again” an opportunity of hearing to the respondents 6 & 7 within two months from the date of communication of the order. By virtue of this order, the petitioner is entitled only for 100 shares covered by the share certificate No. 180771. When the Company was taking necessary steps to issue the duplicate share certificate in terms of the order dated 09.02.2004 of the ROC in favour of the petitioner in respect of 100 shares covered by share certificate No. 180771, the petitioner came forward with the present company petition and therefore, the Company could not act as per the order of the ROC. The order dated 09.02.2004 was made by the ROC pursuant to the order of the High Court in a writ petition filed by the petitioner and in view of this, the order of the ROC cannot be challenged before the CLB. The prayer of the petitioner for cancellation of the transfer of 100 shares covered by share certificate No. 180772 in favour of the respondents 3-5 cannot be considered, since the transfer was registered after following the due procedure by the Company even before receipt of the intimation about loss of these shares by the petitioner in her communication dated 01.08.1996. Moreover, the ROC in his order dated 09.02.2004 has not directed the Company to issue the duplicate share certificate for 100 shares covered by certificate No. 180772. In these circumstances, the petitioner is entitled only for 100 shares covered by the share certificate No. 180771.
5. The respondents 3 to 5 in their objections contended that they are bonafide purchasers of 100 shares comprised in the certificate No. 180772 for valuable consideration through P.R. Khandelwal & Co., Kanpur, Members of U.P. Stock Exchange Association Limited, as seen from the contract note dated 15.01.1996 and bill No. C/1/37 dated 29.01.1996. P.R. Khandelwal & Co., Kanpur, in turn purchased these shares from NDA Securities Limited, Bombay as borne out by copy of the Bill dated 25.01.1996. The respondents paid a sum of Rs. 21,230.50 towards consideration for the shares by way of a crossed account payee cheque dated 25.01.1996 drawn on Punjab National Bank in favour of P.R. Khandelwal & Co., Kanpur, realization of which has been confirmed by Punjab National Bank, in its communication dated 23.01.2004. The Company had effected registration of the transfer of 100 shares in favour of the respondents 3 to 5 and returned the original share certificate to the third respondent by its letter dated 06.04.1996. The respondents were receiving dividend amount from the Company in respect of these shares till 31.03.1996. Though the share certificates are said to have been stolen, yet the petitioner has not chosen to indicate even the date on which the share certificates were lost by her. The alleged first information report lodged with Aliganj Police, Lucknow is untrue for want of any action or filing report by the police authorities. The duty cast on the petitioner to prove the loss of share certificates has not been duly discharged by her. The order dated 09.02.2004 of the ROC categorically rejected the theory of loss of the share certificates by the petitioner. Copy of the share transfer form duly signed by the petitioner as well as her husband and witnessed by Sonal Shares and Securities, Lucknow in respect of 100 shares comprised in certificate No. 180772 disprove the claim of the petitioner. Moreover, the Company had effected the transfer of these shares in favour of the respondents 3-5 even prior to filing of the civil suit by the petitioner against the Company as borne out by the communication dated 11.08.1998 of the Company. In view of this, the prayer made in the company petition must be rejected.
6. According to the respondents 6 & 7, they had purchased 100 shares of the Company comprised in share certificate No. 180771 for valuable consideration through a share broker. The claim of the petitioner that she had lost the original share certificate in respect of the shares purchased by these the respondents is false. The communication dated 14.11.2004 received from the ROC, Andhra Pradesh, Hyderabad did not indicate the full details of the impugned shares excepting the reference to the petitioner and therefore, these the respondents did not take part in the proceedings of the ROC initiated pursuant to the order of the Allahabad High Court. The order dated 09.02.2004 made by the ROC is not binding on them. The sixth respondent never received the original share certificate No. 180771 together with the share transfer form said to have been forwarded by the Company by registered post on 10.10.1996. Both the original share certificate and the share transfer form are still in the custody of the Company, as borne out by xerox copy of the share transfer form duly signed by the transferors as well as transferees and witnessed by their respective share brokers. Moreover, the Company by a letter dated 09.08.1996 addressed to the petitioner confirmed that the transfer of 100 shares in the name of the respondents 6 & 7 is in order and that the Company cannot stop the transfer in the absence of any restraint order from a competent court. The sequence of events show that the respondents 6 & 7 are bonafide purchasers of 100 shares comprised in the certificate No. 180771. Therefore, the Company may be directed to effect the transfer of 100 shares covered by share certificate No. 180771 in favour of the respondents 6 & 7 and thereafter forward the original certificate to them.
7. Shri P. Ravindranath Naidu, the learned authorised representative in his rejoinder pointed out that the requirement of an affidavit as per regulation 14 has been subsequently complied with by the petitioner and further that Section 111A has been invoked seeking rectification of the register of member of the Company, as borne out by the rejoinder filed on behalf of the petitioner. The ROC disposed of the complaint of the petitioner pursuant to the order dated 22.10.2003 of the Allahabad High Court and therefore, the petitioner cannot approach the High Court for her grievances. The plea of the Company that it never received the communications sent by the petitioner is negatived by the receipt issued by the postal authorities and the acknowledgment obtained from the Company by the courier agent which are forming part of the records of this Bench. The Company failed to act on the various letters of the petitioner which resulted in the transfer of 100 shares in favour of the respondents 3 to 5, which is solely on account of negligence of the Company which failed to act as per the request made by the petitioner in her various communications, causing huge loss to the petitioner. The Company failed to issue the duplicate share certificate in respect of 100 shares covered by certificate No. 180771 even after a lapse of more than seven months of the order of the ROC. Though the petitioner is challenging the order dated 09.02.2004 passed by the ROC pursuant to the directions of the High Court of Allahabad, the petitioner cannot seek any relief before Allahabad High Court in view of the fact that the High Court has not retained any seisin over the matter. Moreover, it is only the ROC and not the civil court is a proper forum to grant relief in the matter of issue of duplicate share certificate in accordance with the Companies (Issue of Share Certificate) Rules, 1960 as held by the Supreme Court in 1995 (4) Supreme Court Cases 590 — Shripal Jain v. Torrent Pharmaceuticals Ltd. In these circumstances, the petitioner can seek appropriate relief only before the CLB, but not the High Court of Allahabad.
8. I have considered the pleadings and arguments advanced on behalf of the contesting parties. The issue that arises for my consideration is whether the petitioner is entitled for the reliefs as claimed in the company petition in the facts and circumstances of the present case. While according to the petitioner, she had lost the impugned shares, i.e., 200 shares comprised in share certificate No. 180771 & 180772, the respondents 3 to 7 contended that they are bonafide purchasers of 100 shares comprised in share certificate 180772 and the respondents 6 & 7 urged that 100 shares comprised in share certificate No. 180771 were acquired for valuable consideration. Before going into the merits of the case, I shall consider the preliminary objections raised by Shri B. Ravi, the learned authorized representative of the Company. Though the company petition was filed under Section 10E of the Act without meeting the requirements of the Regulations and without supported by any affidavit as specified therein, yet, I find that these defects subsequently stand rectified by filing rejoinder duly supported by an affidavit sworn on 09.12.2004 by the petitioner in terms of the regulation 14 and invoking the provisions of Section 111A of the Act. Hence, the preliminary objections raised on behalf of the Company do not survive. The decision in Duroflex Limited v. Johnny Mathew (supra) will not go to the aid of the Company, especially when the initial defects are found to be cured.
It is on record that the respondents 3 to 5 had purchased 100 shares of the Company comprised in share certificate No. 180722 in the open market through P.R. Khandelwal & Co, Kanpur (“the Stock Broker”) on 15.01.1996 as seen from copy of the contract note dated 15.01.1996. The respondents took delivery of these shares from the Stock Broker on 29.01.1996 in terms of the bill No. C/1/37 dated 29.1.1996 and paid the purchase price of Rs. 21,230.50 by way of an account payee cheque dated 25.01.1996 drawn on Punjab National Bank, Kanpur in favour of the Stock Broker, the proceeds of which are found to be realized by the latter as borne out by copies of the cheque dated 25.01.1996 and the certificate dated 23.01.2004 issued by Punjab National Bank, Kanpur. It is further observed from copy of the communication dated 06.04.1996 of the Company addressed to the third respondent that the Company had effected registration of the transfer of 100 shares comprised in share certificate No. 180772 in favour of the third respondent and returned the original share certificate in his favour, who was also paid dividend on these shares by the Company as reflected from the dividend warrant No. DJ6501 dated 25.10.1997. The sequence of events supported by the various documents on record unequivocally show that the respondents 3 — 5 have acquired 100 shares comprised in share certificate No. 180772 for valuable consideration in the open market through the Stock Broker. In this connection, the order dated 09.02.2004 of the ROC, Andhra Pradesh, Hyderabad assumes relevance, the relevant portion of which reads as under: –
“During the hearing the representative of the Respondent No. 1 has pointed out that regarding 1st allegation of the Petitioner that the blank share transfer deed was stamped by the office of the Registrar of Companies, Kanpur on 7.12,95 and the said transfer deed was duly executed by the parties on 8.3.96 as such, the question of theft having taken place relating to the concerned share certificates and lodgement of FIR with concerned police authorities and making correspondence with the Respondent No. 1 company does not at all arise keeping in view of the Exhibit No. 4 of the Respondent No. 1 and there is no reason for the Petitioner to make correspondence for stopping the transfer of shares relating to the share certificate bearing No. 180772. The representative of interested party namely Shri Ashok Kumar Mohan has also supported the same point/submission made by the Respondent No. 1. Apart from the above, Shri Ashok Kumar has submitted all the relevant documentary evidence to show that they have purchased the shares through the broker of the UP Stock Exchange, Kanpur.”
The grievance of the petitioner is that the Company was negligent in effecting the transfer of 100 shares in favour of the respondents 3 to 5 in spite of her communications dated 21.07.1995, 25.09.1995, 16.11.1995 and 01.08.1996 and the first information report lodged with the Police authorities at Aliganj. In this connection, the petitioner specifically averred in para 6 of the company petition that she “…sent a letter dated 21.7.1995 to the Respondent No. 2 by registered post alongwith a copy of the FIR requesting the Respondent No. 2 not to make the transfers of the said shares if the same was received at any point of time by the Respondent No. 2…. “, but from copy of the said letter it is observed that the date is found to be corrected and further that the letter is reportedly sent through courier service, which is not only contrary to the pleadings but also not supported by any material. Furthermore, this letter does not even make any reference to the undated F.I.R. (page 21 of Vol.II of the Company) said to have been lodged by the petitioner. Nor does it evidence service of the F.I.R. either on the Police authorities or copy thereof on the Company. At the same time, copies of the postal receipt bearing No. 1823 dated 21.07.1995 showing dispatch in the name of the Company by registered post and the acknowledgement dated 26.09.1995 obtained from the Company by the Courier Agent (Annexure-P4 of the ROC) probably would indicate the dispatch of the letter dated 21.07.1995 of the petitioner in favour of the Company by registered post as well as receipt of the letter dated 25.09.1995 of the petitioner by the Company. There is however, nothing on record to show that the petitioner had sent the letter dated 16.11.1995 to the Company through courier service, as claimed by her. It is on record to show that the Company had effected the transfer of 100 shares covered by the certificate No. 180772 in favour of the respondents 3 to 5 as early as in April, 1996, as seen from the communication dated 06.04.1996 of the Company prior to receipt of the communication dated 01.08.1996 of the petitioner, requesting the Company to stop transfer of shares in favour of the respondents 3 to 7, which does not make any reference to any of the earlier letters or the F.I.R. It is worthwhile to observe that the ROC in his order dated 09.02.2004 after a detailed enquiry rejected the plea of the petitioner that the Company failed to take cognizance of her letters, while transferring the shares in the name of the respondents 3-5 and further expressed doubts about the FIR lodged with the police authorities in the following words:
“On going through the record and appreciating the arguments, I am unable to agree to the 1st contention of the petitioner that Respondent No. 1 has not taken cognizance of 1st and 2nd letters of the petitioner and transferred the shares relating to share certificate bearing No. 180772 to Shri Chunnilal Mohan and others. Besides, the story as put up in evidence creates a doubt whether, actually, FIR was lodged with the concerned police authorities, and if so, where is the authenticated copy of the same and what is the register No. allocated by the police and where is the investigation report thereto. Thus the over all picture of the case and the evidence adduced by the petitioner create a suspicion and the benefit of which must go to the Respondent No. 1 as the allegation has not been proved by clear and cogent evidence. ”
Notwithstanding the discrepancies on the contentious issue whether the Company had negligently transferred 100 shares in the name of the respondents 3 – 5 or not, the latter established their title to 100 shares covered by certificate No. 180772, for the reasons recorded supra. The claim of the respondents 6 & 7 that they acquired 100 shares comprised in share certificate No. 180771 for valuable consideration lacks details. During the course of arguments, the seventh respondent was not in a position to furnish the amount paid towards consideration for the shares said to have been purchased by the respondents 6 & 7 and failed to produce any documents evidencing their title to those shares. The ROC in his order dated 09.02.2004 recorded that the third respondent “…neither appeared in person nor submitted any documentary evidence to show that he was lawful buyer and the consideration amount was paid to the petitioner No. 1.” Though the seventh respondent contended that the communication dated 14.01.2004 addressed to the sixth respondent by the ROC did not contain the full details of the impugned shares on account of which he could not participate in the enquiry proceedings, yet, it is seen that the said letter was preceded by yet another letter dated 06.01.2004 in regard to the enquiry proceedings, the fact of which has not been repudiated by the seventh respondent. The explanation offered by the seventh respondent for not having participated in the enquiry proceedings before the ROC, to my mind, is not convincing. It is on record that the ROC by a communication bearing referring No. RAP/AROC-V/2004 dated 09.02.2004 had forwarded copy of the order dated 09.02.2004 among others, in favour of the sixth respondent by registered post with A/D. When the Company by a communication dated 18.02.2004 advised the sixth respondent to produce his bonafides regarding purchase of the shares from the petitioner, he replied by his letter dated 04.03.2004 in the following words:
“I received your A.D letter on 3.03.04, posted on 18.2.04 by you.
In this connection I am only to say that Share Certificate No. 180771, is neither with me nor I remember if ever purchased or sold as this relates to 9 or 10 yrs as per your version.
If ever I purchased and sent for transfer and same are not transferred (as per your letter) in my name then how can I sell them? It is a matter of great surprise to me.
Please verify once again.
Further if you want me then please send me to & fro expenditure.
For your kind information, I telephoned to Registrar of Companies, Hyderabad on 3.3.04 at 4.40 p.m.
In response to my phone call, he told me to write to you. ”
It is clear that the sixth respondent is not definite about the purchase of 100 shares and that he has no material to claim title over these shares comprised in the share certificate No. 180771. In spite of receipt of the notice of hearing from the ROC in relation to the enquiry proceedings as well as copy of the order dated 09.02.2004 and despite contacting the ROC on 03.03.2004 through telephone on the subject shares, the sixth respondent, never exercised due diligence in establishing his title to the shares comprised in the certificate No. 180771. The respondents 6 & 7 cannot draw any support from the Company’s letter dated 09.08.1996 reporting that the transfer in the name of the respondents 6 & 7 is in order, in view of the fact that the share transfer form in question is under serious dispute. Moreover, the order dated 09.02.2004 of the ROC made pursuant to the directions of the Allahabad High Court in the writ petition (W.P. No. 5392/2003) has become final and binding on the parties to the proceedings including the respondents 6 & 7, which cannot however, be challenged in the present proceedings.
Having found that the respondents 3 to 5 are bonafide purchasers of 100 shares comprised in share certificate No. 180772 for valuable consideration, that the respondents 6 & 7 failed to establish their title to 100 shares covered by the certificate No. 180771 and further that the order dated 09.02.2004 of the ROC on the very same subject matter, made pursuant to the directions of the Allahabad High Court became final, this Bench has no jurisdiction to set aside the order dated 09.02.2004 of the ROC, rectifying the register of members of the Company by cancellation of the transfer effected by the Company in respect of the 100 shares comprised in share certificate No. 180772 in favour of the respondents 3 to 5 as claimed in the company petition. However, the petitioner is at liberty to enforce the order dated 09.02.2004 of the ROC for obtaining the duplicate share certificate in lieu of original certificate No. 180771 for 100 equity shares of the Company, purportedly lost by her. Ordered accordingly. With these directions, the company petition is disposed of, however, without any order as to costs.