Excerpt
Proceedings against the Petitioner for non-issuance of duplicate share certificates to the Opposite Party set aside by Calcutta High Court.
Facts
The instant Petition filed quashed proceedings registered against the Petitioner. The Opposite Party argued that it held 27,000 equity shares of the company. But the Petitioner refused to issue duplicate share certificates. Even after an intimation that the original share certificates got misplaced. The Petitioners refused of having a shareholding in the name of the Opposite Party in office record.
Petitioner’s Arguments
The Petitioners submitted that the issue involved in the case was not an offence. It was further argued that the Opposite Party has transferred its shares in their favour in 2016. It also argued that the Opposite Party already had a receipt for a sum of Rs. 2, 70,000/- towards such transfer. Thus, Petitioner sought to quash the complaint by the court.
Respondent’s Arguments
The Opposite Party put forward that the equity shares were in its name. It was evident by the financial statement of the Petitioner-company of March 2015. The Petitioner couldn’t have registered the transfer unless an instrument bearing the names of both parties as per the Companies Act.
Court’s Observation
The Hon’ble Court observed that the Petitioners are not responsible for any act on behalf of the company. Thus non-issuance of duplicate share certificates on misplacement does not prove malicious intent.
It was further observed that the shares issued and misplacement of such shares were different events. The event could not have been foreseen by the company at the time of issuance of the shares. Thus, there was no fraud committed by the Petitioners. Moreover, no dishonest misappropriation of property and cheating has been found on the complaint.
Cognizance taken by the Chief Metropolitan Magistrate for the offences has no relation with the complaint. Thus, the authorities should be careful while passing a cognizance order.
Judgment
The Hon’ble Court allowed the Petition and disposed of the connected application with no costs. Thereby, the Court quashed complaint proceedings pending against the Petitioners.
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