Karnataka High Court
Komtech Plastic Technologies India … vs Zrii Technologies Inc on 7 April, 2026
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COMAP No. 502 of 2025
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 7TH DAY OF APRIL, 2026
PRESENT
THE HON'BLE MR. VIBHU BAKHRU, CHIEF JUSTICE
AND
THE HON'BLE MR. JUSTICE C.M. POONACHA
COMMERCIAL APPEAL NO. 502 OF 2025
BETWEEN:
1. KOMTECH PLASTIC TECHNOLOGIES
INDIA PRIVATE LIMITED
A COMPANY INCORPORATED UNDER
THE COMPANIES ACT, 1956
HAVING ITS REGISTERED OFFICE AT:
NO. 81 & 82 (B1 AND B2), 7TH MAIN
PEENYA INDUSTRIAL AREA
III PHASE, PEENYA
BANGALORE, KARNATAKA - 560 058, INDIA
REPRESENTED BY ITS
AUTHORIZED REPRESENTATIVE
MR. BARATH COUMAR RAMADAS
...APPELLANT
(BY SMT. POORNIMA HATTI, ADVOCATE)
Digitally
signed by K AND:
P SWETHA
Location:
High Court 1. ZRII TECHNOLOGIES INC
of Karnataka A COMPANY INCORPORATED UNDER
THE LAWS OF CANADA
HAVING ITS REGISTERED OFFICE AT:
1604-195 WYNFORD DRIVE TORONTO
ON M3C 3P3 CANADA
REPRESENTED BY ITS DIRECTOR
MR. RAJNEESH MATHUR
...RESPONDENT
(BY SRI S.R. KAMALACHARAN, ADVOCATE FOR
SRI PRADEEP S. SAWKAR, ADVOCATE)
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COMAP No. 502 of 2025
THIS COMMERCIAL APPEAL IS FILED UNDER SECTION 13
(1-A) OF COMMERCIAL COURTS ACT, PRAYING TO ALLOW THE
APPEAL AND SET ASIDE THE JUDGMENT DATED 19.07.2025
PASSED BY HON’BLE LXXXVII ADDITIONAL CITY CIVIL AND
SESSIONS JUDGE, COMMERCIAL COURT, BENGALURU (CCH-88) IN
COMMERCIAL ORIGINAL SUIT NO.8430/2018 (PRODUCED AT
ANNEXURE-A) AND ETC.
THIS COMMERCIAL APPEAL HAVING BEEN HEARD AND
RESERVED FOR JUDGMENT, COMING ON FOR PRONOUNCEMENT
THIS DAY, JUDGMENT WAS PRONOUNCED AS UNDER:
CORAM: HON’BLE MR. VIBHU BAKHRU, CHIEF JUSTICE
and
HON’BLE MR. JUSTICE C.M. POONACHAC.A.V. JUDGMENT
(PER: HON’BLE MR. VIBHU BAKHRU, CHIEF JUSTICE)
1. The appellant, a private limited company incorporated under
the Companies Act, 1956, has filed the present appeal impugning
the judgment and decree dated 19.07.2025 (as corrected by an
order dated 18.10.2025) [impugned judgment] rendered by the
LXXXVII Additional City Civil and Sessions Judge, Commercial
Court, Bengaluru (CCH-88) [Commercial Court] in
Com.O.S.No.8430/2018.
2. In terms of the impugned judgment, the respondent [hereafter,
referred to as ‘the plaintiff’] has been declared as the absolute
owner of 3,90,682 equity shares of the appellant company. Further,
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COMAP No. 502 of 2025the appellant is also directed to pay an amount of USD 114,041 or
`1,21,91,900/- along with 9% pendente lite and 18% future interest
till the date of payment.
3. The plaintiff had also sought a mandatory injunction directing
the appellant to account for the dividends, benefits and payments
received in respect of the shares (3,90,682 equity shares of the
appellant) with interest. However, the learned Commercial Court did
not render any decision in this regard but observed that the same
requires a separate inquiry.
PLAINT
4. The plaintiff had filed the said suit, inter alia, stating that it is a
company, which was incorporated and registered under the law of
Canada in the year 2014. It is engaged in the business of plastic
products and tooling. It claimed that it is a creditor and a
shareholder of the appellant company by assignment. It claimed that
certain debts due by the appellant were assigned to the plaintiff by
Mrs Niti Mathur in terms of an Assignment Agreement dated
06.06.2016. According to the plaintiff, the appellant was indebted to
the extent of USD 114,041, and was entitled to recover the same,
along with interest at the rate of 24% per annum, from the dates on
which the payments were made. Additionally, the plaintiff claimed
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COMAP No. 502 of 2025
that it owned 3,90,682 shares of the appellant company and was
entitled to a declaration of ownership, as well as consequential
benefits, in respect of the said shares.
5. The plaintiff claimed that Komtech Inc. [Komtech], a company
incorporated in Canada, had transferred various sums to the
appellant for the purchase of equipment and materials. However,
the appellant failed to supply the said equipment and material; thus,
the appellant was required to refund the said amount. The plaintiff
claimed that the appellant was not in a position to refund the same
and had requested Komtech to accept equity shares in lieu thereof.
According to the plaintiff, Komtech had agreed to the same.
6. The plaintiff claimed that in all, an amount of USD 224,996.81
was remitted by Komtech to the appellant on various dates as
under:
Sl. Amount (in Date of Transaction
No. USD) Transfer Reference пo.
1. 70,653 26.02.2008 19061X18855
2. 30,000 26.06.2008 79149X548536
3. 61,546.81 17.07.2008 80532X582187
4. 37,800 13.08.2008 235
5. 25,000 12.11.2008 TTIBD953745MNY
Total 224,996.81
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COMAP No. 502 of 2025
7. The plaintiff claimed that, against the aforesaid amount, the
appellant had allotted 3,90,682 shares at a value of USD
125,039.81 and had also issued a share certificate for the shares.
8. The plaintiff claimed that the balance amount of USD 99,957
remained due and payable by the appellant to Komtech, which was
subsequently assigned to the plaintiff. It claimed that, in addition, a
further sum of USD 14,080 was payable by the appellant to
Komtech under the invoice dated 09.11.2008 raised by Komtech
against the appellant.
9. The plaintiff claimed that it acquired the said assets, namely
receivables of USD 114,041 and 3,90,682 equity shares, by virtue of
a series of transactions. The first was an Asset Purchase
Agreement [APA] dated 18.04.2011 entered into between Komtech
and Komtech Enterprises Limited [KEL], a company registered and
incorporated in Canada. In terms of the said APA, which was
subsequently amended on 26.04.2011, KEL purchased all the
assets of Komtech.
10. The plaintiff claimed that the said APA was subsequently
approved by the Ontario Superior Court of Justice by an order dated
12.05.2011. The plaintiff claimed that a Bill of Sale dated
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COMAP No. 502 of 2025
18.05.2011 was executed, under which KEL purchased all right,
title, and interest in the assets belonging to Komtech. It claimed that
by virtue of the APA as well as the Bill of Sale dated 18.05.2011,
shares of the appellant company held by Komtech stood transferred
to KEL.
11. The plaintiff claimed that KEL’s financial health was poor, and
a Receiver was appointed by a Court in Ottawa, Canada, by an
order dated 18.09.2013. The Receiver so appointed (The Fuller
Landau Group Inc.) sent a letter dated 20.01.2014 calling upon the
appellant to arrange for payment of the amounts due to KEL.
However, the appellant failed to comply with this demand.
12. The plaintiff claimed that the Receiver (Fuller Landau Group
Inc.) was discharged as a Receiver by an order dated 11.03.2016
passed by the Ontario Superior Court of Justice, all assets and
receivables of KEL were assigned to Mrs Niti Mathur. Thus, the
assets, which were originally held by Komtech, came to be held by
Mrs Niti Mathur.
13. The plaintiff claimed that Mrs Niti Mathur was a creditor of
KEL and as on 15.03.2014, a sum of USD 413,720.44 was due and
payable by KEL to Mrs Niti Mathur. It claimed that the said amount
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COMAP No. 502 of 2025
was secured by a General Security Agreement dated 18.05.2011
executed between KEL and Mrs Niti Mathur.
14. The plaintiff claimed that thereafter an “Assignment of Assets
and Accounts Receivable Agreement dated 11.03.2016” was
executed whereby the assets of KEL, which included assets of
Komtech, were assigned to Mrs Niti Mathur.
15. Mrs Niti Mathur, a 100% shareholder of the plaintiff company,
executed an Assignment Agreement dated 06.06.2016 whereby she
had assigned the alleged debts owed by the appellant to Komtech,
to the plaintiff. The plaintiff also claimed that the appellant
acknowledged the debts owed to the plaintiff by emails sent by its
director, Mr Bipin Khimasia, on 02.08.2016, 03.08.2016,
04.08.2016, 12.09.2016 and 27.09.2016.
16. The plaintiff claimed that in the aforesaid context, it addressed
a letter dated 26.10.2017 calling upon the appellant to; offer to its
existing shareholders the option to buy-back the subject equity
shares of the appellant (3,90,682 in number) at fair market value, if
the appellant’s Articles of Association provided for such a buy back.
In the alternative, to co-operate with the plaintiff to register in the
plaintiff’s name, in case, the defendant’s shareholders did not wish
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COMAP No. 502 of 2025
to exercise their option (if any) to buy back. The plaintiff called upon
the appellant to hand over to the plaintiff the original share
certificate No.009, dated 03.09.2009, bearing folio No.8. The plaintiff
called upon the appellant to allot to the plaintiff the appropriate
number of fresh equity shares for the value of USD 99,957, at the
rate at which 390,682 shares were allotted to Komtech as the
amount was due and payable by the appellant; or in the alternative,
pay the plaintiff the sum of USD 99,957 and a sum of USD 14,080
which was due to Komtech.
17. The plaintiff claimed that the appellant responded to the said
letter, denying the claims raised therein.
THE DEFENCE
18. The appellant countered the aforesaid averments. The
appellant claimed that it had received various sums for services
rendered. It also raised invoices for the same, and therefore, the
plaintiff’s claim that any amount was owed by the appellant to
Komtech or its assignees is erroneous. However, the appellant
acknowledged that it had received USD 30,000 on 27.06.2008 and
USD 61,546.81 on 17.07.2008 for investment in the appellant’s
equity. Accordingly, the appellant had issued a share certificate
dated 03.09.2009.
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COMAP No. 502 of 2025
19. The appellant also contended that, in any event, the plaintiff’s
claim for any debt owed was barred by limitation. Insofar as the
claim regarding equity shares is concerned, the appellant claimed
that its Articles of Association prohibited the transfer of any shares
without offering the same to other members of the company.
However, it is material to note that the appellant claimed to have
issued a total of 88,23,429 shares in favour of Komtech.
IMPUGNED ORDER
20. Based on the rival contentions, the learned Commercial
Court framed the following:
“ISSUES
1. Whether the plaintiff proves that amount of 2,24,996.81
USD was paid to the defendant by plaintiff’s predecessor in
title, Komtech.Inc?
2. Whether plaintiff proves that defendant offered
Komtech.Inc to transfer outstanding amount of equity and
same was accepted by Komtech.Inc., and accordingly for
part of outstanding, defendant allotted 390682 shares to
Komtech.Inc as mentioned in schedule and plaintiff
became absolute owner of these shares?
3. Whether the plaintiff proves that, after allotment of
shares there is balance due of USD 99,957/- from
defendant and there is another due of USD 14,080/- in
respect of another invoice dated 9.11.2008 and in total,
there is due of USD 114041/- to Komtech.Inc from
defendant?
4. Whether the plaintiff proves that as per Assignment
agreement dated 6.6.2016, the debt due from the
defendant were assigned to the plaintiff by Mrs. Niti Mathur
as stated?
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COMAP No. 502 of 2025
5. Whether, as assignee, plaintiff is entitle for USD 114041
equalant to Indian Rs.1,21,91,900/- with interest from the
defendant?
6. Whether the plaintiff is entitle for declaration of its
ownership of suit schedule Shares and for direction to
rectify the Register of members accordingly?
7. Whether this court has no jurisdiction to try the suit?
8. Whether the suit is barred by limitation?
9. Whether the plaintiff is entitle to the reliefs prayed in the
suit?
10. What decree or order?”
21. As noted above, one of the principal questions to be
determined at the threshold was whether the plaintiff’s claim for
recovery of the amounts paid was within the period of limitation. The
learned Commercial Court observed that Article 58 of the Schedule
to the Limitation Act, 1963 [Limitation Act] was applicable and a
suit for declaration could be filed within a period of three years from
the date on which the right to sue accrues.
22. The learned Commercial Court found that the assignment
agreement was executed by Mrs. Niti Mathur in favour of the plaintiff
on 06.06.2016 and held that the period of limitation would
commence from the said date. Since the suit was instituted on
23.11.2018, which was within the period of three years from the said
assignment date, the Court concluded that the suit was not barred
by limitation.
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COMAP No. 502 of 2025
23. The learned Commercial Court examined the evidence on
record and found that Komtech had paid the sum of USD 2,24,996
to the appellant. The Court also concluded that the appellant had
allotted 3,90,682 shares to Komtech, and that the plaintiff was
entitled to the same as the assignee of the said shares. Accordingly,
the suit was decreed. However, as far as the rectification of the
Register of Members of the appellant is concerned, the learned
commercial court denied the said relief with liberty to the plaintiff to
approach the National Company Law Tribunal for such relief.
REASONS AND CONCLUSION
24. The first and foremost question to be addressed is whether
the plaintiff’s claim for recovery of the amount is within the period of
limitation. As noted above, the learned Commercial Court had
found that the claim was within the period of limitation on the
premise that the period of limitation would begin to run from the date
of assignment of the assets by Mrs. Niti Mathur to the plaintiff. The
said conclusion is ex facie erroneous. Insofar as the claim for
money is concerned, the suit was clearly for recovery of the amount
paid by Komtech along with interest and therefore could not be
considered a suit for declaration. Article 58 of the Schedule to the
Limitation Act is clearly inapplicable to the claim.
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COMAP No. 502 of 2025
25. The learned counsel appearing for the respondent also did
not canvas that Article 58 of the Schedule to the Limitation Act is
applicable.
26. It is the plaintiff’s claim that Komtech made payments for the
purchase of various equipment and materials that were not
supplied. He claimed that Komtech had sought a refund of the
same. However, the appellant was not in a position to repay the
same. Accordingly, Komtech had agreed to convert the outstanding
amount into equity. But the same was not done as the appellant had
expressed his difficulty in issuing shares due to “Reserve Bank of
India Rules for the value of the entire sum paid by the plaintiff”.
Therefore, the appellant had issued shares for part of the amount
paid by Komtech and had agreed to repay the balance amount to
Komtech.
27. There is no document on record to establish that the appellant
had agreed to repay the amount to Komtech. However, assuming
that the amounts were repayable to Komtech, the same would have
been repayable as on 03.09.2009, if not earlier, as the appellant
issued shares for the part of the amounts received by it on
03.09.2009. Thus, even on the basis of the averments made by the
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COMAP No. 502 of 2025
plaintiff, the amount would have been due and payable to Komtech
in 2009, if not earlier.
28. The plaintiff relied on email (Ex. P22) in support of its claim
that the appellant had acknowledged the amounts were due and
payable. However, plain reading of the set of emails as produced
on record indicates otherwise. An email dated 02.08.2016 (Ex.P22)
from Bipin Khimasia to Raj Mathur states that a certain amount was
sent for the issue of equity. The email sent by Raj Mathur to Bipin
Khimasia on the same day states that the amounts had been
transferred to Zrii Technologies Inc., and that the shareholders
would like a quick resolution of the matter. The email dated
03.08.2016 (Ex.P23) sent by Raj Mathur to Bipin Khimasia mentions
that USD 100,000 was used to issue shares to Komtech, and the
balance USD 115,000 was treated as a loan. In the email dated
04.08.2016 (Ex.P24) sent by Bipin Khimasia, he claimed that the
amounts were designated as loan only to meet local guidelines till
equity could be issued. The subsequent email dated 12.09.2016
(Ex.P25) indicates that Bipin Khimasia claimed that the loan was
converted to revenue (sales) for which invoices were sent, and
Komtech was required to remit a further amount for the issuance of
equity, which was not done. Even if we accept that the emails sent
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COMAP No. 502 of 2025
by Bipin Khimasia were as an authorised representative of the
appellant (which is also a point of contest), we are unable to accept
that any of the emails constitute an acknowledgement of debt owed
by the appellant to the plaintiff.
29. The limitation period for recovering the money, which,
according to the plaintiff, was refundable to Komtech, commenced
on the date the refund became due. According to the plaintiff, the
same became due when the appellant failed to supply the
equipment and materials for which remittances were made, and it
was concluded that only equity shares for part of the amount could
be issued.
30. Although the plaint is silent on the specific dates and events, it
is clear that the said event occurred on 03.09.2009, that is, the date
on which the share certificate for the shares allotted to Komtech was
issued. Thus, the period of limitation expired prior to 02.09.2012,
that is, three years from the date when the amount became payable.
31. The learned counsel for the plaintiff has filed the written
submissions, inter alia, contending as under:
“28. In respect of prayer for recover of money, Plaintiff got
vested with the right over the accounts receivables due
from the Defendant, vide Assignment Agreement dated
06.06.2016 executed by Mrs. Niti Mathur in favour of the
Plaintiff Company. After such assignment, the Director of
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COMAP No. 502 of 2025
the Plaintiff Company vide Exhibits P22 to P28, wrote to
the Director of Defendant-Mr. Bipin Khimasia, wherein he
admitted the debt due to the Plaintiff and has
acknowledged the same in its emails dated August 2016
and September 2016. On account of such
acknowledgement of debt in the year 2016, the suit of the
Plaintiff is well within the prescribed limitation of 3 years as
the suit was instituted in the year 2018. Hence, none of the
grounds urged in the present appeal warrant interference
with the impugned judgment.”
32. In our view, the said contention is without merit. First of all,
the period of limitation for recovering an amount would not
commence from the date of the assignment deed executed by
Mrs Niti Mathur in favour of the plaintiff. The plaintiff is claiming
Komtech’s rights by assignment. The period of limitation would
have to be determined from the date on which Komtech became
entitled to a refund of the amount paid by it. Plainly, the period of
limitation cannot be extended by assignment of receivables.
33. The contention that emails sent in August and September
2016 constitute an acknowledgement of debt is also without merit.
As noted above, we are unable to accept that the emails (Exs.P22
to P28) exchanged with Mr Bipin Khimasia amount to an
acknowledgement of debt, as argued by the plaintiff. However,
even if it were accepted, the said acknowledgement was made after
the period of limitation had expired. Thus, Section 18(1) of the
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COMAP No. 502 of 2025
Limitation Act would be inapplicable, and such an
acknowledgement, if any, would not extend the period of limitation.
34. The learned counsel appearing for the plaintiff also
contended that by virtue of Section 15(3) of the Limitation Act, the
period of limitation would commence on the date of execution of the
assignment deed by Mrs Niti Mathur in favour of the plaintiff. Section
15(3) of the Limitation Act, reads as under:
“15. Exclusion of time in certain other cases.–
(1) ** ** **
(2) ** ** **
(3) In computing the period of limitation for any suit or
application for execution of a decree by any receiver or
interim receiver appointed in proceedings for the
adjudication of a person as an insolvent or by any
liquidator or provisional liquidator appointed in proceedings
for the winding up of a company, the period beginning with
the date of institution of such proceeding and ending with
the expiry of three months from the date of appointment of
such receiver or liquidator, as the case may be, shall be
excluded.
(4) ** ** **
(5) ** ** **
35. A plain reading of Section 15 of the Limitation Act clearly
establishes that the same is inapplicable. The said subsection (3) of
Section 15 of the Limitation Act is applicable only in cases where a
suit or application for execution of a decree is made by a receiver or
an interim receiver appointed in proceedings for adjudication of a
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COMAP No. 502 of 2025
person as an insolvent or by a liquidator or provisional liquidator
appointed in proceedings for winding up of a company. In the
present case, the plaintiff is neither a receiver nor a liquidator of any
entity and the suit is not filed in that capacity. In view of the above,
we hold that the claim for recovery of the receivable is barred by
limitation. Thus, the monetary claim for recovery of any amount is
liable to be rejected on the said ground.
36. Insofar as the merits of the claim are concerned, we are
unable to accept that the plaintiff has established that the amount as
claimed is repayable by the appellants to Komtech. The Foreign
Inward Remittance Certificates [FIRCs] produced by the plaintiff
indicate that the purpose of remittance was reflected as “payment
receipts” and “advance receipts”. Two of the FIRCs for an amount of
USD 61506.81 and USD 29,960.00 reflect the purpose as ‘advance
receipts’ for equity share capital. Thus only those amounts were
received towards equity capital. These two FIRCs also indicate that
the rupee equivalent to the said amounts as on the respective dates
of remittance, were `26,22,743/- and `12,84,086/-. The aggregate
value of the said remittances is `39,06,829/-, which clearly
establishes that the same were for allotment of 3,90,682 equity
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shares at a face value of `10/- each. Undisputedly, the said shares
were allotted to Komtech.
37. It is material to note that one of the remittances – a remittance
of USD 70,606 – was not received from Komtech but from another
entity, Komtech MFG. Inc. It is also material to note that the
plaintiff’s witness (Mr Rajneesh Mathur) had, in his cross-
examination, admitted that there were no audited financial records,
which reflect that the appellant owed any money to Komtech. Thus,
although it is established that Komtech and Komtech MFG. Inc. had
remitted payments to the appellant, there is no material to establish
that the amounts as remitted were repayable to Komtech.
38. According to the appellant, it had supplied materials to
Komtech and Komtech Mfg. Inc. The appellant had also produced
invoices dated 19.02.2008 and 18.03.2011 for Design and
Engineering Services, which it claimed that it had rendered to
Komtech Mfg. Inc. Additionally the appellant had also produced
Export Service Invoice dated 08.03.2011 for Design and
Engineering Services.
39. The amount claimed by the plaintiff also includes USD 14,080
in respect of an invoice dated 09.11.2008. The claim for the
amounts due, if any, against the said claim is hopelessly barred by
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COMAP No. 502 of 2025
limitation. However, apart from the same, the plaintiff was also
unable to establish that Komtech had made any supplies to the
appellant in respect of the said invoice.
40. The next question to be examined is regarding the plaintiff’s
claim for 3,90,682 equity shares of the appellant. In this regard, the
facts clearly establish that the appellant had allotted and issued fully
paid 3,90,682 equity shares to Komtech. The photocopy of the said
certificates issued by the appellant is produced on record. The
appellant does not dispute that the said equity shares were allotted
to Komtech, and it continues to be reflected as a holder of 3,90,682
equity shares.
41. The plaintiff has produced the APA dated 18.04.2011, as
amended on 26.04.2011, executed between Komtech Inc. and KEL.
It has also produced bill of sale dated 18.05.2011 executed between
Komtech and KEL. By virtue of the said documents, the assets of
Komtech were vested with KEL. There is no reason to doubt the
assignment, as the shareholders of Komtech and KEL are related
parties.
42. Mr Rajneesh Mathur was admittedly the director of Komtech.
He is also the director of KEL, and the entire shareholding of KEL is
held by Mrs Niti Mathur, wife of Mr Rajneesh Mathur. KEL went
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under receivership and, in terms of the Order dated 18.09.2013,
passed by the Ontario Superior Court of Justice, a receiver was
appointed in respect of KEL’s assets. The receiver so appointed had
executed an assignment deed dated 11.03.2016 in favour of Mrs
Niti Mathur, transferring all the assets of KEL to her. The said
receiver was discharged by an Order dated 11.03.2016. Mrs Niti
Mathur had assigned the debts allegedly owed by the appellant to
Komtech, as well as the equity shares of the appellant held by
Komtech, in favour of the plaintiff. It is also material to note that Mrs
Niti Mathur is also a sole shareholder of the plaintiff company, and
her husband, Sri Rajneesh Mathur, is its director.
43. The transactions of assignments from Komtech to the plaintiff
company were a set of transactions between related parties. The
evidence produced on record clearly indicates that the equity shares
allotted by the appellant company to Komtech are now owned by
the plaintiff. However, the said shares cannot be transferred to the
plaintiff unless the same are offered to the other shareholders of the
appellant company. Article 4 of the Articles of Association of the
appellant company, which provides for the transfer of shares reads
as follows:
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“4. TRANSFER OF SHARES
a) Except provided in 4(c) below, the shares in the
Company shall not be transferred except to a person
agreed to by majority of the Directors of the Company and
at the price fixed by the Board of Directors as laid down in
clause 4(b). The shares, to be transferred shall be first
offered to the members of the Company and only such
shares which are not purchased by the existing members
shall be offered to other persons.
b) The price fixed by the Board for purposes of the transfer
shall be the fair value of the shares computed on the
following basis:
1) Net assets basis without revaluation of assets and
exclusion of goodwill, if any.
ii) Valuation on the basis of earning for the purpose, the
earnings of the immediately preceding three financial years
and in case three years have not elapsed, the earnings
from the date of incorporation till the end of the financial
year preceding the year in which the transfer notice has
been made shall be taken and the average earnings so
determined shall be included in the value of the shares
along with the paid up share capital as on the date of the
transfer notice. The capitalized value of the net earnings
shall not be less than 20% of the paid up share capital if
the average earnings fall short of the said percentage.
Further, if there are no earnings, the value of the shares
shall not be less than the amount paid up against them.
The value of each share will be the amount paid up
together with the capitalized value of the average warnings
in proportion to amount paid up thereon.
iii) The higher of the value of the shares as ascertained by
the above methods, shall be deemed to be the fair value of
the shares”
44. Although the plaintiff may have acquired the equity shares of
the appellant company by way of an assignment, the same cannot
be transferred in its name, unless they are offered to the members
of the appellant company at the price fixed by the board of directors
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COMAP No. 502 of 2025
of the appellant company. If the members do not accept the said
shares, they may be offered to a person as agreed by a majority of
the directors of the appellant, or to the plaintiff if the directors of the
appellant are so agreeable. In the event the shares are transferred
to the existing members or any other person as identified by the
Board of Directors, the plaintiff would be entitled to the consideration
of the same.
45. There is no material on record that the plaintiff has made a
request for the transfer of the shares in its favour. It is important to
note that the plaintiff had claimed a decree of mandatory injunction
directing the appellant to rectify its Register of members and to
substitute its name in respect of the subject shares in place of
Komtech. However, no such mandatory injunction can be granted.
However, the plaintiff would be entitled to the original share
certificate for 3,90,682 equity shares, being certificate No. 009 dated
03.09.2009, in Folio No. 8. If the original share certificate is not
available, the plaintiff is entitled to a duplicate of the same.
However, since the said certificate is in the name of Komtech, it
would continue to reflect the same. However, the plaintiff would not
be entitled to transfer or seek transfer of the said shares, except in
accordance with the Articles of Association of the appellant.
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COMAP No. 502 of 2025
46. The impugned judgment and decree to the extent it directs
payment of USD 114,041 or `1,21,91,900/- along with interest is set
aside.
47. Insofar as the declaration that the plaintiff is the absolute
owner of the shares is concerned, the said decree is modified. The
plaintiff would be entitled to claim transfer of the equity shares,
subject to the Articles of Association of the company.
48. The appellant shall hand over the original share certificate or
a duplicate of the same to the plaintiff to enable it to seek transfer of
the same. As and when the request for transfer is made, the same
would be transferred in accordance with the Companies Act, 2013
and the Articles of Association of the appellant.
49. The appeal is allowed in the aforesaid terms.
Sd/-
(VIBHU BAKHRU)
CHIEF JUSTICE
Sd/-
(C.M. POONACHA)
JUDGE
KPS/KMV
