Bombay High Court
SHARMILA SAHA AND ANRversusTHE CUSTODIAN AND ORS
- Decided
- Disposal
- DISPOSED OFF
- Bench
- N JAMADAR
Holding
The Court held that the stop‑transfer direction is lifted and the applicants are entitled to certification of the 50 shares.
Summary
The applicants, Sharmila Saha and another, sought certification of 50 Apollo Tyres Ltd. shares that were allegedly purchased from Mother India Securities in June 1998 and registered in their names in September 1998. The Custodian had placed the shares under a pending‑action status, preventing dematerialisation, and contested the certification on the ground that proof of payment was not on record. The Court examined the documentary evidence, including the broker’s bill and receipt confirming payment, and noted that the shares had undergone successive transfers after 8 June 1992. Relying on the Custodian’s own order dated 5 May 2001 (MP No. 88 of 2000), which lifts stop‑transfer directions for shares that have been successively transferred, the Court found the applicants to be bonafide purchasers. Consequently, the restraint was lifted, the certification was granted, and the Custodian was directed to transfer the shares with all accruals within eight weeks.
Issues considered
- Whether the Custodian's stop‑transfer direction over the subject shares should be lifted.
- Whether the applicants have established bonafide purchase and proof of payment sufficient for certification.
- Whether the order dated 5 May 2001 (MP No. 88 of 2000) applies to the present case, given the successive transfers after 8 June 1992.
Legislation cited
Subjects
- certification of shares
- stop‑transfer direction
- custodian
- bonafide purchaser
- successive transfer
- dematerialisation
- Apollo Tyres Ltd.
- Special Court
Judgment
Digitally signed
by SWAROOP
SWAROOP SHARAD
SHARAD PHADKE
PHADKE Date:
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2026.07.17
21:15:22 +0530
IN THE SPECIAL COURT
(TRIAL OF OFFENCES RELATING TO TRANSACTIONS
IN SECURITIES) ACT, 1992
MISC. APPLICATION NO.26 OF 2025
Sharmila Saha and Anr. … Applicants
versus
The Custodian and Ors. … Respondents
Mr. Pradip Saha, Applicant No.2 present in person.
Mr. Gandhar Raikar with Ms. Shilpa Bhate (through VC), Ms. Payal Mehta, for
Custodian.
Mr. Siddhant Marathe i/by Shardul Amarchand Mangaldas and Co., for
Respondent No.2.
Mr. Ashwin Mehta, for Notified Party.
CORAM: N.J.JAMADAR, J.
JUDGE, SPECIAL COURT
DATE : 17 JULY 2026
P.C.
1. Heard the learned Counsel for the parties.
2. This is an application for certification of 50 shares of Apollo Tyres Ltd.
(ATL) – Respondent No.2, having Certificate No.E019461, Distinctive
Nos.1437728 to 1437777 and Folio No.0105983 (the subject shares).
3. The applicants claimed to have purchased the subject shares from the
open market, through M/s. Mother India Securities Pvt. Ltd. (R4) in the month
of June 1998. The transaction was evidenced by a bill dated 25 June 1998
issued by the Respondent No.4 and the price of the shares was paid through
cheques. The subject shares were duly registered in the name fo the
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applicants on 11 September 1998. In the year 2000, when the Applicants
lodged the shares for de-materalization through ICICI Infotech, the applicants
were informed that the subject shares were placed under ‘pending action
status’ pursuant to the instructions of the Custodian (R1), thereby restraining
ATL (R2) from giving effect to the transfer / de-materalisation of the subject
shares.
4. Pursuant 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 applicants have preferred this application to lift
the attachment over the subject shares and to release / pay all the accruals /
accretions and dividend thereon.
5. The Custodian (R1) has filed a Certification Report. The Custodian has
contended that, though the applicants have produced the share certificates,
bill, contract note and receipt of broker, the applicants have not placed on
record the proof of payment.
6. Mr. Hitesh Mehta – the notified party, has resisted the prayer for
certification of shares by filing an affidavit in reply.
7. 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.
8. Perused the material on record. The documents placed on record by
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the applicants lend unflinching support to the claim of the applicants. The
applicants have also placed on record a bill issued by the Mother India
Securities Pvt. Ltd. (R4), a stock broker. The certificate issued by Mother
India Securities Pvt. Ltd. (R4) confirms the receipt of the price of the shares
The fact that the shares were registered in the name of the applicants is
borne out by the Memorandum of Transfers overleaf the subject shares. The
share certificate also bears an endorsement “surrender for de-
materialization”.
9. It appears that since 1992, there have been successive transfers of the
subject shares and, eventually, the subject shares came to be registered in
the name fo the applicants in the month of September 1998.
10. In this backdrop, Mr. Raikar, learned Counsel for the Custodian fairly
submitted that the instant case would be covered by the order dated 5 th May
2001 in MP No. 88 of 2000, whereby the stop transfer directions issued by the
Custodian stood lifted in case of successive transfers, after 8th 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 8 th June 1992, the Stop
Transfer Direction of the Custodian to the companies stands
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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.”
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 Applicants. 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. The situation which thus emerges is that, the Applicants have placed on
record adequate material to demonstrate that they are the bonafide
purchasers of the subject shares, and, the case at hand also seems to be
governed by the first category, as carved out by the order dated 5 May 2001.
Thus, the restraint on the transfer / de-materialization of the subject shares
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deserves to be lifted.
14. For the foregoing reasons, the Application deserves to be allowed.
Hence, the following order :
ORDER
(i) The Misc. Application stands allowed.
(ii) The prayer for certification of 50 shares of Apollo Tyres Ltd. (R2)
bearing having Certificate No.E019461, Distinctive Nos.1437728 to 1437777
and Folio No.0105983 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.10 of the Certification Report, in favour of the applicants, within a period of
eight weeks from today.
Misc. Application stands disposed.
( N.J.JAMADAR, J. )
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