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2010 (4) TMI 623 - HC - Companies LawWhether the petitioners therein (respondent Nos. 2 to 5) are well within their right to maintain a petition under section 399 and the petition is maintainable? Held that:- First of all, respondent Nos. 2 to 5, although they formed part of the co-promoters’ group but admittedly they had not taken up the entire shares which was to be subscribed by the co-promoters, hence even if for the sake of argument, it is assumed that the co-promoters had, as a matter of fact, and not merely by a paper transaction taken up 25 per cent of the shareholding in the company, it does not automatically follow that respondent Nos. 2 to 5 had also made subscription to at least 10 per cent of the shareholding of the company. There had to be specific finding in this regard before any such conclusion could have been drawn by the Company Law Board. There being no such finding with respect to respondent Nos. 2 and 3 and further there being a specific finding that respondent Nos. 4 and 5 did not qualify as holding one-tenth share capital, this court fails to understand as to how Board could have arrived at a conclusion that the petitioners had succeeded in showing that they were holding 10 per cent equity shares and entitled to maintain a petition under section 398 before it. The findings regarding the existence of the so called share certificates produced on behalf of respondent Nos. 2 to 5 also ought not to have been accepted by the Company Law Board in view of the serious allegations that there were hundreds of signed blank share certificates in existence from the time when the company was under the control of private co-promoters. This should have been reason enough for the Company Law Board to have directed the petitioners to first approach the proper forum for correcting the register of members. The appeal is thus allowed
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