BEFORE THE SECURITIES APPELLATE TRIBUNAL MUMBAI
Appeal No. 107 of 2008
Date of decision: 26.9.2008
M/s. MCS Limited ……Appellant
Versus
Securities and Exchange Board of India …… Respondent
Mr. Narayan Sahu Advocate for the Appellant.
Mr. Kumar Desai Advocate with Ms. Daya Gupta and Ms.Chloris John Advocates for the Respondent.
CORAM : Justice N.K. Sodhi, Presiding Officer
Arun Bhargava, Member
Utpal Bhattacharya, Member
Per : Justice N.K. Sodhi, Presiding Officer (Oral)
The appellant is a Registrar and Share Transfer Agent registered with the Securities and Exchange Board of India (f or short the Board). The Board received complaints from some issuer companies alleging that on the termination of their agreement with the appellant as Share Transf er Agent (STA), the latter did not hand over the records/data and othe r relating documents which were in its possession in its capacity as STA. The complaints were forw arded to the appellant to make necessary compliance and, on its failure to do so, procee dings were initiated under section 11B of the Securities and Exchange Board of Indi a Act, 1992 (hereafter called the Act). On receipt of the show cause notice, the appellan t filed its reply stating that except in the case of M/s. Varun Shipping Company Ltd. and Dabur India Ltd., it had issued the necessary no objection certificates of all other companies with whom the agreement had been terminated and that these two companies have not paid the dues which, according to the appellant, were due to it under the agreement. On a consideration of the material collected during the course of the enquiry held under section 11B of the Act and after taking into consideration the reply filed by the appellant, the whole time member by his order dated August 11, 2008 held that the appella nt had acted contrary to the code of conduct prescribed for STAs and a direction has been issued to transfer all data/records and issue no objection certificates to the co mpanies and the depository, if not already done, failing which strict action would be taken against it. It is against this order that the present appeal has been filed.
We have heard the learned counsel for th e parties and they are agreed that the direction issued to the appellant has since been complied with. In this view of the matter, nothing survives in the appeal. However, what is contended by the learned counsel for the appellant is that the Board wh ile directing the appell ant to transfer all data/records to the issuer companies should have also directed them to pay the dues to the appellant which, according to it, are due under the contract. We cannot accept this contention. The code of conduct prescribed for STAs requires that as an when the contract with the issuer companies is te rminated, the former should handover to the latter the data/records and ot her documents that may be in their possession. Since this was not done, the Board rightly directed the appellant to return the records and the data.
As already observed, this direction has been complied with. As regards the dues which the appellant is claiming, it would be open to it to resort to proceedings in an appropriate forum in accordance with law to receive those dues. The Board cannot take upon it to adjudicate such contractual disputes between the parties. In view of what has been stated above, the appeal has become infructuous and the same is accordingly disposed of with no order as to costs.
Sd/-
Justice N.K.Sodhi.
Presiding Officer
Sd/-
Arun Bhargava
Member
Sd/-
Utpal Bhattacharya
26.9.2008 Member
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