Transfer of shares of hsg soc(ltd. co,) into demat a/c read

Querist : Anonymous (Querist) 04 April 2020 This query is : Resolved
I have purchased a flat in 2017 in a society which is basically a Ltd.Co. (Seawoods Estates Ltd in Nerul, Navi Mumbai). The previous owner is settled in UK. Now the society is insisting to get the shares transferred into the Demat account, first in the name of the previous owner and then into my name and only then they will issue me a NOC for selling this property as the shares are still in the name of the previous owner. In the absence of the previous owner, how can I get the shares transferred into my account in Demat form. Do I have to furnish an affidavit from the previous owner for the same

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A homeowner is trying to transfer shares of their housing society, a limited company, into a Demat account so they can sell their flat. The society requires the shares to be transferred first from the previous owner to the current owner. However, the previous owner, who lives in the UK, is uncooperative and unwilling to complete the necessary paperwork. This has stalled the sale of the flat, as the society is refusing to issue a No Objection Certificate (NOC) without the share transfer. Options discussed include contacting the previous owner, seeking legal recourse through civil court, and consulting with lawyers or consultants in Mumbai.

Raj Kumar Makkad (Expert) 04 April 2020
If your previous owner has his bank account in India then he can open his demat account within 5 minutes and then can upload his shares which in turn shall be got demat and subsequently he shall be free to get the same transferred in your name.

This is very easy process which hardly takes 30 minutes to complete. Previous owner need not to come to India for this purpose if he can e-sign the form prescribed for opening the account.

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Querist : Anonymous (Querist) 04 April 2020
Thanks for the prompt reply. The previous owner is not in touch nor does he have any account in India as he is based in UK for a very long time. So in his absence what is the next option?

Raj Kumar Makkad (Expert) 05 April 2020
The company is at fault. It was its duty to ensure the shares of all its shareholders. If your previous shareholder of the company had not been guided by the company, you are not at fault. Make a due representation to the company with offer to offer your indemnity bond to the effect that the said shares have not been used elsewhere and you are responsible for any loss if the company occurs due to change of the said shares. If still company do not oblige, approach RERA of your area with complete documents.

Rajendra K Goyal (Expert) 05 April 2020
Shares can be transferred through due process.

Contact the previous owner and proceed to get the formality completed.

It was your fault tht you did not got the share transferred in your name.

T. Kalaiselvan, Advocate (Expert) 07 April 2020
There is nothing to be worried about it to this extent.
You can contact the previous owner via any social media and ask him to complete the formalities to get the share certificate in the demat form, after that you can get it transferred to your name by the same process.

Querist : Anonymous (Querist) 16 April 2020
Thanks for the responses to my query. It is to state that the previous owner is not responding to my request and as he is settled in UK he is not so keen on doing ay paperwork. In such a scenario what can I do to get the shares in my name in NSDL. Is there any good lawyer/consultant/share broker in Mumbai who can help in sorting out this issue on top priority.

Querist : Anonymous (Querist) 16 April 2020
The society is very adamant on the issue. Their say is that sale deed and transfer of share are different issues and equally important for ownership of the sai flat and further sale of the flat. Since the shares have still not been transferred in electronic form it is not possible to issue NOC for sale of the said flat. Due to which the sale process is stuck in midway.

SHIRISH PAWAR, 7738990900 (Expert) 16 April 2020
Dear querist,

If previous owner is not co- operating and transferring shares. You have to approach civil court against the previous owner. You may contact me and visit my office at Vashi, Navi Mumbai for further litigation if you wish.

Regards,
adv-ssp.com

Rajendra K Goyal (Expert) 16 April 2020
You said:
It is to state that the previous owner is not responding to my request and as he is settled in UK he is not so keen on doing ay paperwork.
Reply:
In such case, legal process can be started, issue him legal notice and if no response received, file case. Make society as party in the dispute.

You said:
In such a scenario what can I do to get the shares in my name in NSDL.
Reply:
As advised above, court case need to be filed, discuss with local lawyer.

Rajendra K Goyal (Expert) 16 April 2020
You said:
Is there any good Message lawyer/consultant/share broker in Mumbai who can help in sorting out this issue on top priority.
Reply:
You have to search locally, no recommendation in this respect.

You said:
The society is very adamant on the issue. Their say is that sale deed and transfer of share are different issues and equally important for ownership of the sai flat and further sale of the flat.
Reply:
Go through the byelaws of the society. Is there provisions of being a member without holding / after selling a flat in the society. Include society in the case to be filed as one party.

Rajendra K Goyal (Expert) 16 April 2020

You said:
Since the shares have still not been transferred in electronic form it is not possible to issue NOC for sale of the said flat.
Reply:
If Society is adamant, try to complete the process through court.

You said:
Due to which the sale process is stuck in midway.
Reply:
Buyer may not proceed in case sale is complete in all respect.

Rajendra K Goyal (Expert) 16 April 2020
You should note that the sale process may not be completed till whole process of transfer of shares is completed. You have options:
If buyer agree, transfer of shares be kept in pendency till the process is completed. Sale may be through Registered sale deed as it was in your case.
Otherwise, You can cancel the deal at present and proceed to get the shares transferred in your name first.

Guest (Expert) 16 April 2020
You have the need to check the provisions of the society bylaws, if the management refuses to transfer the property in your name without getting the shares of the company in your mane.

However, a pertinent question arises, if such a condition of demat of shares was there, how the previous owner could sell the flatto you in 2017 and why you cannot resell now without demating of the shares?

Rajendra K Goyal (Expert) 17 April 2020
Registration of sale deed and transfer of shares are two separate process and both jointly completes the sale process. It seems only registered sale deed was executed, transfer of share was not effected, for which society is insisting now before issuing of NOC. It seems the current owner took the possession after registered sale deed of the flat. The query was replied based on this assumption.

Exact facts would be revealed after hearing from the querist.

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