Bombay High Court
DILIP BHADHEKAversusTHE CUSTODIAN AND ORS
- Decided
- Disposal
- DISPOSED OFF
- Bench
- N JAMADAR
Holding
The stop‑transfer direction is lifted and the applicants are entitled to certification and transfer of the 50 Apollo Tyres shares.
Summary
Harshada D. Badheka, widow of the deceased applicant, sought certification of 50 Apollo Tyres Ltd. shares that were blocked by the Custodian under a stop‑transfer direction. The shares were purchased in 1999, registered in the deceased husband's name, and an attempt to dematerialise them in 2004 was halted by the Custodian. The Court examined whether the stop‑transfer order should continue, relying on an earlier order (M.P.No.88 of 2000 dated 5 May 2001) which lifts such directions for shares that underwent successive transfers after 8 June 1992. Since the subject shares were transferred to the applicants on 16 June 1995, they fell within the first category and the restraint was deemed inapplicable. The Notified Party did not object, and the Court held the applicants to be bonafide purchasers. Consequently, the Court allowed the interim and miscellaneous applications, directing the Custodian to certify and transfer the shares with all accrued dividends within eight weeks.
Issues considered
- Whether the stop‑transfer direction issued by the Custodian continues to apply to shares that were transferred after 8 June 1992.
- Whether the applicants are bonafide purchasers entitled to certification of the shares.
- Whether the Custodian must lift the restraint and effect transfer of the shares and accrued benefits.
Legislation cited
Subjects
- share certification
- stop‑transfer direction
- dematerialisation
- bonafide purchaser
- Securities law
- Special Court
- interim application
Judgment
7 spia 4 of 2025.doc
IN THE SPECIAL COURT
(TRIAL OF OFFENCES RELATING TO TRANSACTIONS
IN SECURITIES) ACT, 1992
INTERIM APPLICATION NO.4 OF 2025
IN
MISC. APPLICATION NO.22 OF 2018
WITH
MISC. APPLICATION NO.22 OF 2018
Dilip R. Badheka (deceased)
Harshada D. Badheka, wife and
legal heir of Applicant No.1 … Applicants
versus
The Custodian and Ors. … Respondents
Mr. Ketan R. Trivedi, for Applicants.
Mr. Gandhar Raikar with Ms. Shilpa Bhate (through VC) with Ms. Payal
SWAROOP Mehta, for Custodian.
SHARAD
PHADKE Mr. Ashwin Mehta, for Notified party.
Digitally signed by
SWAROOP
Mr. Siddhant Marathe i/by Shardul Amarchand Mangaldas and Co., for
SHARAD PHADKE
Date: 2026.07.20 Respondent No.2.
20:13:43 +0530
CORAM: N.J.JAMADAR, J.
JUDGE, SPECIAL COURT
DATE : 17 JULY 2026
P.C.
1. Heard the learned Counsel for the parties.
2. Misc. Application No.22 of 2018 was preferred for the certification of 50
shares of Apollo Tyres Ltd. (ATL) – Respondent No.2, having Certificate
Nos.01215771 and 01185828, Distinctive Nos.012281101 to 012281125 and
01302976 to 013029700, Folio No.Z86725 (the subject shares).
3. By an order dated 23 August 2018, the said Application came to be
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dismissed with liberty to the Applicant therein – deceased husband of the
Applicant, to revive the said application after complying with the requisitions
and procuring requisite documents. The Applicant has, thus, preferred this
Interim Application to restore Misc. Application No.22 of 2018 to file and
permit the applicant to renew her prayer of certification.
4. The Applicants claimed that in the year 1999, Dilip R. Badheka, the
deceased husband of the Applicant and the Applicant, had purchased the
subject shares from the open market and the payment was settled through
cash. The subject shares were duly registered in the name of the deceased
husband of the Applicant and the Applicant. In the year 2004, the applicants
lodged the shares for de-materialization. Thereupon, the Applicants were
informed vide communication dated 12 April 2013 that the Custodian had
instructed ATL (R2) to stop transfer / de-materialization of, and payment of
dividends on, the subject shares.
5. In response to the public notice dated 31 January 2025 published by
the Custodian pursuant to the directions of this Court in Misc. Application
No.39 of 2018 dated 14 June 2024, the Applicant has preferred this Interim
Application to lift the attachment over the subject shares and to release / pay
all the accruals / accretions and dividends thereon.
6. The Custodian (R1) has filed a Certification Report. The Custodian has
submitted that only photocopies of two share certificates have been submitted
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by the Applicant. No other document has been submitted to substantiate the
claim of the Applicant. It is further contended that KFin Technologies Ltd. the
Registrar and Transfer Agent of ATL (R2) has confirmed that the subject
shares are registered in the name of the deceased Dilip - Applicant and
formed part of Misc. Application No.39 of 2018 and are subject to stop
transfer instruments.
7. Smt. Jyoti Mehta – the notified party, has resisted the prayer for
certification of the shares, by filing an affidavit in reply.
8. ATL (R2) has filed an affidavit and submitted that it has no objection to
the claim of the applicants being considered and adjudicated by this Court, in
accordance with law.
9. Evidently, the subject shares were registered in the name of the
deceased husband of the Applicant and the Applicant. From a perusal of the
share certificates, it becomes abundantly clear that the shares had changed
hands after the initial allotment in the year 1989. After successive transfers,
the subject shares came to be registered in the names of deceased Dilip and
the Applicant on 16th June 1995. The copies of the share certificates bear an
endorsement “surrendered for de-materalization”. Thus, the absence of
documents does not detract materially from the Applicant’s claim as ATL (R2)
has categorically admitted that, duly verified transfer deeds previously
submitted by the Applicant along with the original share certificates are not
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traceable.
10. Moreover, Mr. Raikar, learned Counsel for the Custodian, fairly
submitted that the instant case would be covered by the order dated 5 May
2001 in M.P.No.88 of 2000, whereby the stop transfer directions issued by the
Custodian stood lifted in case of successive transfers, after 8 June 1992.
11. The operative directions in the order dated 5th May 2001 read as under :
“The Custodian is directed to inform the said companies that
they are free to transfer / demat 27 lakh shares whose
particulars are given in Exhibit G to the Petition, except those
shares which have not been transferred in the books of the
companies till today since 8th June 1992. In other words, in
case of successive transfers after 8th June 1992, the Stop
Transfer Direction of the Custodian to the companies stands
lifted whereas in cases where shares continue to stand in the
name of the registered holder as on the date of the
Notification i.e. 8th June 1992 till today, the Stop Transfer
Direction given by the Custodian will continue to operate. In
the latter case, the purchasers of the shares will have to
approach this Court for certification and thereupon the Court
will examine such cases individually on the basis of bonafides
of the transaction as well as the proof of payment.
Accordingly, the Custodian is directed to forward copy of this
order to each of the said 90 companies who, in turn, will
intimate the same to the holders seeking transfer/demat of
their respective shares. However, it is made clear that those
shares which are the subject matter of the earlier orders of
this Court shall continue to be governed by such orders.”
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12. In the case at hand, the material on record indicates that, there were
successive transfers after 8th June 1992 before the subject shares came to be
registered in the name of the Applicant and her deceased husband on 16
June 1995. Clearly, the instant case would be covered by the first category in
respect of which the stop transfer instructions issued by the Custodian stood
lifted.
13. Mr. Mehta, learned Counsel for the Notified Party, fairly submitted that,
having regard to the small quantity of shares, and, in the facts of the case,
without prejudice to the rights and contentions of the Notified Party to oppose
the prayer for certification in other cases, the Notified Party does not object to
the certification of the shares in this case.
14. As the Applicant appears to be a bonafide purchaser of the subject
shares and the case seems to be governed by the first category, as carved
out by the order dated 5 May 2001, the restraint on the transfer / de-
materialization of the subject shares deserves to be lifted.
15. For the foregoing reasons, the Applications deserve to be allowed.
Hence, the following order :
ORDER
(i) Interim Application No.4 of 2025 stands allowed.
(i) Misc. Application No.22 of 2018 stands allowed.
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(ii) The prayer for certification of 50 shares of Apollo Tyres Ltd. (R2)
bearing Certificate Nos.01215771 and 01185828, Distinctive Nos.012281101
to 012281125 and 01302976 to 013029700, Folio No.Z86725, stands allowed.
(iii) The Custodian (R1) shall take necessary steps to transfer the
subject 50 shares along with all accruals and dividends, as indicated in para
No.14 of the Certification Report, in favour of the Applicant, within a period of
eight weeks from today.
Misc. Applications stand disposed.
( N.J.JAMADAR, J. )
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