2017 (4) TMI 1630 - BOMBAY HIGH COURT

Whether the appellant had given her consent for exit from the respondent nos. 1 and 6 on the basis of the valuation report to be made by the valuers based on the balancesheet of respondent nos. 1 and 6 as of 31st March, 1998? - whether the order passed by the Company Law Board based on such alleged consent rendered by the appellant and her daughter is perverse or not?

HELD THAT:- Under Sections 397 and 398 of the Companies Act, 1956, the petitioner has two options available i.e. (i) to exit from the company in question on payment of fair valuation and (ii) to pursue the petition or an appropriate action alleging oppression and mismanagement and to take it to its logical conclusion. In my view, the appellant could not pursue both the options simultaneously, once having agreed to exit from the respondent nos.1 and 6 on the condition that the appellant is paid fair valuation of her share. The Company Law Board has ample powers under Section 402 of the Companies Act, 1956 to order the valuation in the event of the petitioner having agreed to exit. The orders passed by the Company Law Board under Section 402 of the Companies Act, 1956 for valuation of such shares for the purpose of exit of the appellant is enforceable as a decree of the Court.

Since the order passed by the Company Law Board and by this Court under Order XXXII Rule 7, Sub-rule (2) is voidable, appropriate proceedings had to be filed for repudiation of the contract as voidable. Since no steps are taken by the respondent no.7 after attaining the age of majority till date, those orders passed by the Company Law Board and also by this Court would continue to be binding on her. The order dated 22nd July 2011 is not challenged by any of the parties including the respondent no.7.

Whether the respondent no.1 could have issued any duplicate shares in favour of the respondent no.7 and that also without allegedly not following the requisite procedure under the provisions of the Companies Act, 1956 and other provisions of law? - HELD THAT:- It is not in dispute that neither the appellant and her daughter, nor the respondent no.7 could produce the original share certificates of the late Mr.Anthony Maynard before the respondent no.1 for transmission of those shares in their respective names in the ratio of 1/3rd of the total shareholding of the late Mr.Anthony Maynard in their favour each and to rectify the register of shares.

A perusal of the company petition along with the company application filed by the appellant and her daughter also clearly indicates that in her alternate prayers, the appellant herself had prayed for issuance of duplicate share certificates of the originals of those share certificates representing 2/3rd of the shareholding of the late Mr.Anthony Maynard if originals were not available with the respondent no.1 - the respondent no.1 has already made a submission before this Court that the duplicate share certificates in respect of 1/3rd share of the appellant and her daughter also would be issued by the respondent no.1 and can be deposited with the National Company Law Tribunal. The appellant is thus not affected in any manner whatsoever insofar as the duplicate share certificates are concerned.

No question of law arises in any of these company appeals and thus no interference with the impugned order passed by the Company Law Board is warranted in these appeals under section 10F of the Companies Act, 1956.

The Company Appeal are dismissed.