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2015 (6) TMI 428 - Board - Companies LawCharges of oppression and mismanagement - Sections 397, 398 read with Section 402 of the Indian Companies Act, 1956 - Reduction in shareholding from 50% to 30% fraudulently - No communication for AGM - Non payment of bonus or dividents - Illegally sale of property belong to company - Diversion / siphoned of company funds - Held that:- As per own admission by the Company, by way of showing the Petitioner's shareholding in the Annual Returns filed until 2012, this fact is very clear that the Petitioner was holding 1950 shares in the Company. It is needless to say that the admission is the best evidence against the party who makes it. In my opinion, the Respondents cannot be allowed to assert the fact that the impugned shares were transferred in favour of the Respondent No. 2 in 1976-77 by way of gift. In addition to the above, it is a well settled law that for a lawful transfer of shares the execution of transfer deeds, as provided in Section 108(1) of the Act, is a must, as held in the case of Manalal Khetan v. Kedar Nath Khetan [1976 (11) TMI 135 - SUPREME COURT OF INDIA]. As regards the limitation, it is an established proposition of law as held in the cases of Sangramsinh P. Gaekwad v. Shantadevi P. Gaekwad (dead) through L.Rs [2005 (1) TMI 409 - SUPREME COURT OF INDIA] that an act of oppression is a continuous wrong until it is brought to end by passing an appropriate order. The causes of action lastly arose in his favour in the year 2013 when he came to know that the company has not shown him as a shareholder. Therefore, the petition since is filed well within 3 years, it is well within the limitation. From the narration of the facts by the Respondents as stated in the preceding paras, it is evident that the Respondents have not disputed that the Petitioner initially was holding 50% shares. Subsequently, his shareholding was reduced to 36.1% for the reason that he had become an NRI. It is further admitted that the Petitioner was holding 1950 shares constituting 26.7% shareholding in the Company. However, as discussed hereinbefore, the Respondents have failed to prove the factum of gift of the said number of shares in favour of the Respondent No. 2. Their plea that these shares were gifted by the Petitioner thus has not been proved by the Respondents. Therefore, depriving the Petitioner from his shares with mala fide motive and for no valid reason, in my opinion, amounts to grave act of oppression. It is continuous wrong and is still persisting. In my opinion, this singular act of oppression is enough to grant appropriate reliefs to the Petitioner in this case. Based on the overall discussion above, I have come to the conclusion, in so far as to the allegation of illegal transfer of 1950 shares of the Petitioner in favour of the Respondent No. 2 is concerned, the Petitioner has succeeded to prove the same as an act of oppression. Although, this is a single act, yet looking to the seriousness of gravity the said act of oppression, the effect of which is still persisting, in my view, the Petitioner is entitled to the relief with respect to the impugned shares. The petition, therefore, is disposed.
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