NCLT Ahmedabad Orders Bosch Home Comfort To Restore Shareholder's Name, Finds No Sufficient Cause

The Ahmedabad Bench of the National Company Law Tribunal (NCLT) on 28 September directed Bosch Home Comfort India Limited to restore Anoopama Shah's name in its Register of Members in respect of 250 shares after finding that her name had been omitted without sufficient cause.

A Bench of Judicial Member Shammi Khan and Technical Member Sanjeev Sharma allowed Shah's appeal against the company and others. The Tribunal observed:

“In view of the aforesaid observations and findings, we are of the considered view that the name of the Appellant was omitted from the Register of Members without sufficient cause and that the subsequent transfer and dematerialisation of the subject shares cannot be sustained.”

Shah claimed that she had purchased 250 shares of Jonson Control Hitachi Air Condition India Limited between 1991 and 1994 and continued to possess the original share certificates. In March 2019, she sought dematerialisation of the shares. Her request was rejected on the ground that duplicate certificates had already been issued and dematerialised.

She alleged that respondent No.3, Anoopmaben Manish Shah, had impersonated her, submitted forged documents including her husband's death certificate and fraudulently obtained duplicate share certificates. The duplicate shares were subsequently transferred to Bimal Kumar Shah in June 2018 and dematerialised thereafter.

Further, she contended that the respondents proceeded with the duplicate certificates despite a recorded signature mismatch and a change of address. According to her, the respondents neither contacted her at the original registered address nor properly verified the documents.

She relied on her continued possession of the original certificates to establish her ownership and on Section 59, which empowers the NCLT to rectify the Register of Members where a person's name is entered or omitted without sufficient cause.

Respondents No.1 and 2 denied the allegations and maintained that they had acted in accordance with law. They argued that they could not be held responsible for an alleged fraud committed by a third party. They also contended that once shares are dematerialised, they become fungible, lose their distinctive identity and become untraceable.

They further argued that the appeal was time-barred. They also pointed out that Shah had not initiated criminal proceedings against the alleged impersonator.

The Tribunal examined the sequence of events, including correspondence from 2017 onwards, rejection of a change-of-address request due to a signature mismatch, subsequent issuance of duplicate certificates based on documents from Jaipur and their transfer to Bimal Kumar Shah.

It noted that respondent No.3 had not appeared in the proceedings and that respondent No.2 had failed to verify the authenticity of the documents, particularly the address proof. The Tribunal found that the respondents had no sufficient cause to remove Shah's name from the Register of Members.

The Bench also noted that Shah continued to possess the original share certificates and that her earlier requests had been rejected because of signature discrepancies. It held that these circumstances established that her name had been omitted from the Register without sufficient cause. The objection regarding limitation was also rejected.

It directed Bosch Home Comfort India Limited to rectify its Register of Members by restoring Shah's name in respect of the 250 shares. Respondent No.2 was directed to take all consequential steps in the depository records within 30 days.

Alternatively, in view of the respondents' submission that dematerialisation had rendered the shares fungible, the Tribunal directed them to pay Shah the market value of the shares along with dividends as on the date of the order.

Accordingly, the NCLT allowed the appeal.