NCLT Ahmedabad Orders RoC Inquiry Into Veer Fabricators' Share Transfer Dispute

The Ahmedabad bench of the National Company Law Tribunal (NCLT) has declined to order rectification of the register of members of Veer Fabricators Private Limited at this stage.

It noted that no transfer documents, records of consideration, board approvals, or other material had been placed on record to establish the authenticity of the disputed share transfers.

Instead, it directed the Registrar of Companies (RoC) to conduct an inquiry into whether the transfers were effected in compliance with the Companies Act 2013.

The bench of Judicial Member Chithra Hankare and Technical Member Dr. V.G. Venkata Chalapathy partly allowed an appeal filed by erstwhile shareholders Ashok Ramchandra Panchal and Harsh Ashokbhai Panchal. It directed the RoC to conduct an inquiry under Section 206(4) to determine whether the disputed share transfers complied with Section 56 of the Companies Act, 2013.

The tribunal observed, "...nor any financial consideration for the shares, relevant board meetings, approvals are placed on record to accept authenticity of the inclusion of new names, depriving the applicant/s. Hence, the prayers made by the applicant for rectifying register of ROC cannot be granted at this stage."

Veer Fabricators was incorporated in April 2019 with three promoters holding 10,000 equity shares. Following changes in the board, Ashok Ramchandra Panchal and Harsh Ashokbhai Panchal came to hold 5,000 shares each. The company's records for FY 2020-21 reflected them as its sole shareholders.

According to Ashok Ramchandra Panchal and Harsh Ashokbhai Panchal, their names were later removed from the Register of Members and replaced with those of Meet Bharatbhai Patel and Amrish Ramanbhai Panchal.

They maintained that they continued to possess the original share certificates.

According to them, they never executed any share transfer deeds or other transfer instruments, nor did they hand over the original share certificates. They alleged that Patel and Panchal unlawfully secured entries recording them as shareholders.

Relying on Section 56 of the Companies Act, 2013, and the company's Articles of Association, the appellants argued that shares could not be transferred without a duly executed instrument of transfer. They therefore sought restoration of their names as well as damages amounting to ₹50 lakh for alleged wrong removal. 

The respondents opposed the appeal. They argued that it was premature because the appellants had not first approached the RoC. They also pointed to RoC records dated August 22, 2025, which reflected Patel and Panchal as shareholders. According to them, the dispute involved contested questions of fact that could not be decided in proceedings under Section 59.

The tribunal noted that the RoC's records depicted the appellants as shareholders as on March 31, 2021. Meet Bharatbhai Patel and Amrish Ramanbhai Panchal, who appeared as shareholders in the records for March 31, 2022.

However, neither side produced documents showing whether the shares had been transferred by sale, gift, inheritance or restructuring. There was also nothing on record regarding consideration for the transfers. The tribunal further noted that the physical share certificates remained with the appellants.

Patel and Panchal appeared as shareholders in the records for March 31, 2022. However, neither side had produced documents showing whether the shares had been transferred by sale, gift, inheritance or restructuring. Nor had any material been produced regarding consideration for the transfers. The tribunal also recorded that the shares were physical shares and remained with the appellants.

The bench also observed that although the RoC had produced the relevant records, it had not explained how the transfers were effected. It noted that the MGT-7 filed for FY 2021-22 listed the respondents as shareholders but left the details of the share transfers blank. No material relating to consideration, board meetings, or approvals had been placed on record to establish the authenticity of the respondents' inclusion in the register.

The tribunal, therefore, directed the RoC to conduct an inquiry under Section 206(4). It must examine whether Veer Fabricators carried out the disputed share transfers in compliance with Section 56 of the Companies Act, 2013. The RoC has also been directed to determine the petitioners' shareholding as of the date the application was filed and pass appropriate orders.