Original certificates resurface after a loss complaint
Northgate Registry Services is RTA to Sunrise Ceramics Ltd. Folio C-9081 stands in the name of Meenakshi Iyer for 1,200 physical equity shares under certificates 5121 (700 shares) and 5122 (500 shares); her last specimen signature was recorded in 1998. On 4 February 2025 she lodges a loss complaint covering both certificates, with an FIR copy, a notarised affidavit, an indemnity bond and the newspaper advertisement the company's policy requires. On 26 February, before any duplicate is issued, a Pune broker lodges a transfer deed for the entire 1,200 shares purportedly signed by Meenakshi Iyer, together with what appear to be the original certificates 5121 and 5122. The covering letter says the shares were bought on 19 February from a person claiming to be her "authorised signatory"; no power of attorney is enclosed. On 3 March Northgate issues duplicate certificates to Meenakshi. On 6 March the broker's advocate writes demanding registration within 15 days and threatening legal action.
1. Should the transfer lodged on 26 February be registered?
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No, not on these documents, and the reasoning matters more than the refusal.
Three facts contradict a routine registration. First, the registered holder has sworn an affidavit and filed an FIR that these very certificates are lost. Originals appearing afterwards are either hers, in which case she must withdraw the complaint in writing, or not hers, in which case the lodgement is an attempt to deal in certificates she says she never held. Second, the deed is presented by a broker for a client claiming to be an "authorised signatory". A registered holder's own shares pass only by the holder, by an attorney under a properly executed power of attorney, or by a successor; no power of attorney is on record, and no such status can be created by assertion in a covering letter. Third, the signature must be compared with the 1998 specimen; a mismatch, or attestation by a bank branch with no record of her, is a defect in itself.
The RTA must withhold registration, write to the holder at her recorded and alternate addresses for confirmation, and require the broker to produce his seller-client, the power of attorney and the chain of title. If she denies signing, treat it as suspected forgery and escalate rather than negotiate with the broker.
2. What should Northgate do now with the original certificates and with the duplicates already issued?
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The originals came into Northgate's custody on 26 February and duplicates were nevertheless issued on 3 March. That sequencing is the real failure, and it has to be recorded honestly and then contained.
- Originals: deface and mark certificates 5121 and 5122 in the record as cancelled following issue of duplicates, retain them in the safe custody file with a documented chain of custody, and do not release them to the broker. The broker's client has no title to them; Northgate's duty is to the registered holder, and return is permissible only on her written instruction or a court direction.
- Duplicates: they are the only valid instruments now. Note the duplicate numbers against the folio and confirm to the holder which certificates are live.
- Holder: write to her setting out exactly what was lodged, when, and by whom, and ask for a written confirmation or denial of the signature.
- Escalation: if she denies signing, report the incident to the company's board and to the exchanges/SEBI as a suspected fraud touching the RTA's operations, and assist her complaint.
Otherwise the broker's advocate gets a factual reply within the week: the certificates were reported lost and advertised as lost, the deed is not registered, and his remedy lies against his seller.
3. What timelines and records govern this file from 26 February onwards?
Read the worked answer
Treat the 26 February lodgement as the trigger for a set of parallel deadlines, not as a file to be left open.
The objection memo must be issued within 30 days of lodgement, that is by 27 March, and it must state the grounds precisely: certificates reported lost and advertised as lost; signature under verification against the specimen; no power of attorney or chain of title for the person claiming to act for the holder. Add that the deed and certificates are held in safe custody pending resolution, because the holder's claim to them is disputed. Copy the company's compliance officer and record the entry in the objection register.
Answer the advocate's notice inside the same window, on facts and dates, without conceding that the deed is valid. Preserve the deed, both certificates, courier and custody records and the verification notes for at least the retention period prescribed under the RTA Regulations, since this file will be examined in the next inspection and may become evidence in a criminal complaint. Fix the internal control gap too: where a loss complaint is pending, the duplicate issue should have been paused and the correspondence placed before the officer who authorises duplicate issuance.