Bombay High Court
VISHNU PRASAD SHAH AND ANRversusTHE CUSTODIAN AND ORS
- Decided
- Disposal
- DISPOSED OFF
- Bench
- N JAMADAR
Holding
The stop‑transfer directions were lifted and the 200 shares were certified in favour of the applicants.
Summary
The applicants sought certification and dematerialisation of 200 shares of Apollo Tyres Ltd. that they purchased from Shree Jalaram Investment Co. and for which payment of Rs.90,055 was made by cheque. The shares, transferred to the applicants in 1995, were subject to a stop‑transfer order issued by the Custodian under a prior court direction dated 14 June 2024. The Custodian argued that the applicants had not produced a contract note, broker receipt, or proof of delivery, and the notified party opposed certification. The Court examined the 2001 order (MP No.88 of 2000) which lifts stop‑transfer directions for shares that have undergone successive transfers after 8 June 1992, finding that the present shares fell within that category. Considering the applicants' proof of payment and bona‑fide purchase, the Court lifted the stop‑transfer direction, certified the shares, and ordered the Custodian to transfer them with all accruals and dividends within eight weeks.
Issues considered
- The applicability of the 5 May 2001 order (MP No.88 of 2000) lifting stop‑transfer directions for shares with successive transfers after 8 June 1992.
- Whether the applicants satisfied the certification requirements, including proof of purchase and bona‑fide transaction.
- Whether the Custodian's stop‑transfer instruction should remain in force over the subject shares.
Legislation cited
Subjects
- certification
- stop‑transfer
- dematerialisation
- share transfer
- securities
- special court
- bona fide purchase
- accruals
- dividends
Judgment
17-SPMA-32-2025.DOC
IN THE SPECIAL COURT AT BOMBAY
Constituted under the Special Court (Trial of Offences Relating to
Transactions in Securities) Act, 1992
MISCELLANEOUS APPLICATION NO. 32 OF 2025
Vishnu Prasad S Shah & Anr ...Applicants
Versus
The Custodian and Ors …Respondents
Ms. Deepa Bajaj, for the Applicant.
Mr. Gandhar Raikar, with Ms. Shilpa Bhate (through VC), and Ms.
Payal Mehta, for the Custodian.
Mr. Siddhant Marathe, i/b Shardul Amarchand Mangaldas and Co, for
Respondent No.2- Apollo Tyres Limied.
Mr. Ashwin Mehta, for the Notified Party.
CORAM: N. J. JAMADAR, J.
Judge, Special Court
DATE : 10th JULY 2026
ORDER:
1. This is an application for certification of 200 shares of Apollo
ARUN
RAMCHANDRA
SANKPAL
Digitally signed by
Tyres Ltd (ATL) (R2), as specififed in the below table (“the subject
ARUN
RAMCHANDRA
SANKPAL
Date: 2026.07.13
18:48:19 +0530 shares”).
Certificate Nos. Distinctive Nos. from Distinctive Nos. to
1114842 10506451 10506475
1126006 10785551 10785575
1179490 12122651 12122675
1217686 13077551 13077575
1414842 20245126 20245150
1426006 20524226 20524250
1479490 21861326 21861350
ARS 1/6
17-SPMA-32-2025.DOC
1517686 22816226 22816250
2. The Applicants claim to have purchased 200 shares of ATL (R2)
from Shree Jalaram Investment Company (R3). The price of the shares
was paid vide Cheque bearing No. 744491 drawn on Bank of India, C.P.
Tank Branch, for an amount of Rs.90,055/-.
3. The subject shares were eventually transferred in the name of the
Applicants in the year 1995. When the Applicants lodged the shares
with ATL (R2) for de-materialization, vide communication dated 15 th
July 2023, ATL (R2) informed the Applicants that the subject share
could not be de-materialized in view of the stop transfer/de-
materialization instructions issued by the Custodian (R1).
4. In view of a public notice dated 31 st January 2025, published by
the Custodian in pursuance of the directions of this Court in Misc
Application No. 39 of 2018 dated 14th 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 has filed a Certification Report. It is, inter alia,
contended that although the Applicants have submitted share
certificates and proof of payment, yet, contract note, bill/receipt of
broker, proof of delivery in stock exchange and proof of price being not
lower than the lowest ruling price on the date of purchase in the
ARS 2/6
17-SPMA-32-2025.DOC
relevant stock exchange, has not been submitted. Thus, the requisite
conditions for certification cannot be said to have been fulfilled.
6. Fortune Holding Pvt Ltd (R6), the Notified Party has also opposed
the prayer for certification.
7. I have heard Ms. Deepa Bajaj, the learned Counsel for the
Applicants, Mr. Gandhar Raikar, the learned Counsel for the Custodian,
Mr. Siddhant Marathe, the learned Counsel for Respondent No.2, and
Mr. Ashwin Mehta, the learned Counsel for the Notified Party.
8. The share certificates (Exhibit “A”) bear an endorsement that the
shares were surrendered for de-materialization. The shares were
initially allotted in the year 1989 to various parties. Subsequently, in the
year 1994, Bhupendra Mistry (R4) acquired the subject shares and his
name came to be recorded as the transferee. It further appears, the
shares were thereafter transferred in the year 1995 in favour of the
Applicants and the Applicants name came to be added as the transferees
under the Memorandum of Transfers, overleaf the share certificates.
There has not been any further transfer of the subject shares.
9. It would be contextually relevant to note that the communication
dated 6th February 2026 addressed by KFINTECH, the RTA of the ATL
(R2), clearly records that the subject shares are registered in the names
of the Applicants and the Custodian has vide letter dated 14th June 2001
directed ATL (R2) to stop transfer in the shares forming part of MA No.
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17-SPMA-32-2025.DOC
39 of 2018, which include the subject shares. Thus the subject shares
have remained under stop transfer instructions.
10. It is also imperative to note that the claim of the Applicants that
they had purchased the shares from Shree Jalaram Investment Co (R3)
and the price thereof was paid through banking Chanel is substantiated
by the copy of the bank-passbook. It appears that a sum of Rs.90,055/-
was paid to Respondent No.3 vide Cheque No. 744491. Thus, there is
adequate proof of payment of the price of the subject shares and that
establishes the genuineness of the transaction and the bonafide of the
Applicants claim. Therefore, the submission of Mr. Mehta that the
Applicants have failed to demonstrate that the transaction was genuine
and bona fide, cannot be acceded to.
11. Mr. Raikar, learned Counsel for the Custodian, fairly submitted
that the instant case would be covered by the order dated 5 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 8 June 1992.
12. The operative directions in the order dated 5 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 8 th June 1992. In other
words, in case of successive transfers after 8 th June 1992,
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17-SPMA-32-2025.DOC
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. 8 th 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.”
13. 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.
14. As the case in hand 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 shares deserves to be lifted. For the
foregoing reasons, the Application deserves to be allowed.
15. Hence, the following order :
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17-SPMA-32-2025.DOC
:ORDER:
(i) The Misc. Application stands allowed.
(ii) The prayer for certification of 200 shares of
Apollo Tyres Ltd. (R2) specified in the table below
stands allowed.
Certificate Nos. Distinctive Nos. from Distinctive Nos. to
1114842 10506451 10506475
1126006 10785551 10785575
1179490 12122651 12122675
1217686 13077551 13077575
1414842 20245126 20245150
1426006 20524226 20524250
1479490 21861326 21861350
1517686 22816226 22816250
(iii) The Custodian (R1) shall take necessary steps
to transfer the subject 200 shares along with all
accruals and dividends, as indicated in paragraph
No.10 of the Certification Report, in favour of the
Applicants, within a period of eight weeks from
today.
The Misc. Application stands disposed.
[N. J. JAMADAR, J.]
ARS 6/6
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