NCLT Ahmedabad Directs Registrar of Companies to Investigate Share Transfer Compliance Under Section 206(4) — Ashok Ramchandra Panchal vs Veer Fabricators Private Limited
Case Background
The National Company Law Tribunal, Ahmedabad Bench, recently adjudicated a significant matter involving alleged unlawful transfer of shares in a private limited company. The petition was instituted under Section 59 of the Companies Act, 2013, with the core grievance being that the names of the original shareholders had been fraudulently removed from the Register of Members without their knowledge or consent.
Case Name: Ashok Ramchandra Panchal Vs Veer Fabricators Private Limited (NCLT Ahmedabad)
Statute Involved: Companies Act, 2013 — Section 56, Section 59, Section 206(4)
Reliefs Sought by the Appellants
The appellants approached the Tribunal with the following specific prayers:
- Direction to Respondent No. 1 to rectify the Register of Members by restoring the appellants' names and removing Respondent Nos. 2 and 3 as shareholders/members
- A direction compelling the respondents, jointly and severally, to pay damages of ₹50,00,000 (Rupees Fifty Lakhs) for unlawfully omitting the appellants' names from the Register of Members in a fraudulent and illegal manner
- Any additional relief as the Tribunal deemed appropriate in the interest of justice
Factual Matrix
Company Incorporation and Original Shareholding
Respondent No. 1, Veer Fabricators Private Limited, was incorporated on 22.04.2019 under the Companies Act, 2013. Upon incorporation, the promoter-directors held the following equity stake:
| Promoter/Director/Shareholder | Shares | Shareholding (%) |
|---|---|---|
| Harsh Ashokbhai Panchal | 3,500 | 35% |
| Pankit Hemangbhai Panchal | 3,500 | 35% |
| Abhishek Ashishkumar Panchal | 3,000 | 30% |
| Total | 10,000 | 100% |
Subsequent Changes in Directorship and Shareholding
A series of changes were made to the company's directorial composition over time:
- On 04.10.2019, Mr. Abhishek Ashish Panchal resigned as Director, and Appellant No. 1 was appointed as Executive Additional Director. Form DIR-12 was duly filed with the ROC.
- On 10.10.2019, Mr. Pankit Hemangbhai Panchal also resigned as Director, with Form DIR-12 filed accordingly.
- Mr. Abhishek Ashish Panchal and Mr. Pankit Hemangbhai Panchal expressed their intention to liquidate their entire shareholding, following which the appellants remained as the only shareholders holding 5,000 shares each of ₹10 each.
- On 03.07.2020, Respondent No. 2 was inducted as an Additional Executive Director, with Form DIR-12 filed before the ROC.
- On 05.08.2021, Appellant No. 2 resigned as Director, and Mr. Amrish Panchal was appointed on 06.08.2021, with the requisite DIR-12 filing made.
Shareholding Position as Claimed by Appellants (Post 06.08.2021)
| Shareholder | Shares | Shareholding (%) |
|---|---|---|
| Harsh Ashokbhai Panchal | 5,000 | 50% |
| Ashok Ramchandra Panchal | 5,000 | 50% |
| Total | 10,000 | 100% |
The appellants categorically maintained that no legally valid change in shareholding occurred after 06.08.2021, and that Respondent Nos. 2 and 3 served only as directors of the company and were never inducted as shareholders through any lawful mechanism.