NCLT Ahmedabad Orders Restoration Of 21,000 Ambuja Cements Shares To Original Holders

The Ahmedabad bench of the National Company Law Tribunal (NCLT) has directed Ambuja Cements Limited to rectify its Register of Members by restoring two shareholders as joint holders of 21,000 equity shares and removing the name of another individual.

The tribunal held that the transfer in his favour remained unsubstantiated.

The bench of Judicial Member Shammi Khan and Technical Member Sanjeev Sharma allowed an appeal filed by Ambuja Cements Limited seeking correction of the register after questions arose over the transfer of the shares and the subsequent omission of the original holders' names.

Referring to the two original shareholders and the transferee, the tribunal observed, “There is no material available on record to indicate that Respondent Nos.1 and 2 voluntarily transferred, assigned or relinquished their rights over the subject shares. Since the transfer in favour of Respondent No.4 remains unsubstantiated, the removal of the names of Respondent Nos.1 and 2 from the Register cannot be sustained in law.”

The appeal, affirmed by Ambuja Cements Company Secretary Manish Mistry, concerned 21,000 equity shares jointly held by Rajashree Sachin Kulkarni and Shaila Gajanan Kotwal under two folios. According to the company, the original share certificates had been lost.

In February 2019, the company's Registrar and Transfer Agent, MUFG Intime India Pvt. Ltd., received two share transfer forms dated February 8, 2019 along with the share certificates. The documents purported to transfer the shares to Raghavraman Rama Chandran.

Kulkarni and Kotwal denied executing the transfer forms. They maintained that the signatures appearing on the documents were forged.

The transfer was processed in March 2019 after no objections were received to notices issued by the registrar. A new folio was created in Chandran's name. The endorsed share certificates were then dispatched to him.

In July 2021, Chandran sought dematerialisation of the shares through Globe Capital Market Ltd. During scrutiny of the request, the registrar noticed discrepancies in the KYC documents submitted. Further processing was withheld.

Multiple communications were issued calling upon Chandran to appear with supporting documents. He did not do so. A public notice was also published inviting claims in relation to the shares.

Kulkarni and Kotwal approached the registrar in January 2023 seeking duplicate share certificates. They were informed that the shares had already been transferred. They subsequently lodged a police complaint disputing the transfer.

The company sought rectification of the Register of Members on the ground that the names of the original holders had been removed and Chandran's name had been entered without sufficient cause.

The registrar informed the tribunal that although the transfer request had been processed in 2019, later verification steps could not establish the genuineness of the transaction. Globe Capital Market Ltd. stated that its role was confined to forwarding the dematerialisation request and related communications.

The tribunal recorded that Chandran neither appeared before the registrar during the verification process nor before the NCLT. It also noted that no material had been produced by him to establish lawful acquisition of the shares.

Referring to Chandran's entry in the register, the tribunal held, “In the absence of any material establishing a lawful transfer, this Tribunal holds that the entry of the name of Respondent No.4 in the Register of Members was made without sufficient cause.”

The bench found that Kulkarni and Kotwal were the original joint holders of the shares. It further noted that there was no material showing they had voluntarily transferred, assigned or relinquished their rights.

“Continuation of an unsupported entry in the Register of Members may affect ownership rights and future transactions concerning the subject shares. Therefore, correction of the statutory records has become necessary,” the tribunal observed.

The tribunal clarified that although Kulkarni and Kotwal had disputed the signatures appearing on the transfer deeds, it was not recording any finding on criminal liability or forgery

The proceedings, it held, were confined to rectification of the Register of Members.

The tribunal consequently directed removal of Chandran's name from the Register of Members and restoration of Kulkarni and Kotwal as joint holders under the original folios.