DLF Ltd. and Ors. Vs. Satya Bhushan Kaura and Ors. - (NATIONAL COMPANY LAW APPELLATE TRIBUNAL) (13 Jan 2020)

A party cannot approbate and re-approbate at the same time

MANU/NL/0011/2020

Company

The Appellant has preferred this appeal under Section 421 of Companies Act, 2013 against the order passed by National Company Law Tribunal vide which Appellant No. 1 was directed to register the transfer and the Respondent was directed to make payment for 60,000 shares to Appellant No. 2. Respondent No. 1 was also directed that, on transfer of 60,000 shares in his name, he will execute the transfer deed to the extent of entitlement of Respondent No. 2 in accordance with terms of Letter of Administration issued by District judge vide order.

It is not in dispute that Mr. Devki Nandan Kaura was a shareholder of Appellant company holding 150 shares and after split of shares and bonus issue, his legal heirs are entitled for these 6000 shares. The real controversy between the parties is with regard to entitlement of allotment of 60000 shares which were due to R1 (including R2) on right basis by the Appellant company.

From the correspondence exchanged between the parties, it is noted that, the Appellant company have never intimated the Respondent that they have not approached the Appellant within the limitation period. However, vide letter dated 30th November, 2007, the Appellant Company has intimated the Respondent that final decision will be upon receipt of court direction in this regard. Once having represented to the Respondent to act upon certain course of action and he believing such representation bonafide and true acted upon it, the other party cannot resile back now from its stand. In other words, a party cannot approbate re-approbate at the same time.

Appellant company in their correspondence with the Respondent has already accepted to issue shares to the Respondents as per their entitlement on production of court orders, affidavit and indemnity bond and on payment of Rs. 120000 being the consideration amount of 60000 shares. During the course of arguments when we asked learned counsel for the appellant when the Letter of Administration has been submitted by the Respondent then why did you insist for affidavit and indemnity bond. When Letter of Administration has been issued, it means that the Appellants are discharged from their liability. On this, the learned counsel for appellant apologised. The appellant is a listed company in real estate and is very well aware of legal formalities. By insisting affidavit and indemnity bond again and again inspite of Letter of Administration issued clearly establish that the Appellants are harassing the poor investors.

The impugned order is upheld and further directions are issued. Respondent will make payment of consideration to the appellant company within 15 days and he shall be entitled to the benefit of the membership from the date of payment. Appellant company will transfer/arrange for transfer 60000 shares to the Respondent within 30 days. Respondent on transfer of 60000 shares in his name, will execute the transfer deed to the extent of entitlement of Respondent No. 2 within 30 days.

Tags : TRANSFER DIRECTION LEGALITY