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2020 (11) TMI 756 - Tri - Companies LawTransfer and registration of shares - deletion of entries made in furtherance to conversion of 2,00,00,000 partly up equity shares into fully paid-up equity shares - It is submitted that the petitioner is coercing the respondents to buy at exorbitant price, its 2,40,70,000 shares which were purchased by the petitioner from various banks during 2011-12 at an average price of ₹ 1.11 per share - HELD THAT:- Partly paid-up shares were issued in 2003-04, which was long prior to the applicant purchasing the shares of respondent No. 1-company from the banks. The petitioner is aware of the authorised capital of respondent No. 1-company. There is no irregularity in calling for conversion of partly paid shares into fully paid shares, because respondent No. 1-company needed money for payment to the banks to avoid proceedings under the SARFAESI Act, 2002. Partly paid shares were issued prior to the petitioner becoming shareholder of respondent No. 1-company. Even assuming that the petitioner purchased shares in 2011-12 though transfer was effect on May 20, 2015 yet 2 crores partly paid shares of ₹ 10 were issued prior to 2011-12. Absolutely the petitioner cannot have any grievance for conversion of partly paid-up shares in to fully paid-up shares on March 16, 2015. The partly paid-up shares were issued prior to passing of restraining order, then how order dated March 20, 2008 of the Company Law Board is violated. Only conversion of partly paid shares into fully paid shares has taken place after interim order - this is not in violation of any interim order. The applicant is therefore, not entitled to challenge such conversion and the applicant is not entitled to any relief for forfeiture or for cancellation of the shares. The grievance of the applicant is that calling for conversion of partly paid shares into fully paid shares is in contravention of the order passed by the then Company Law Board, whereunder the Company Law Board directed that shareholding to be in status quo. This order dated October 23, 2008. No fresh shares were issued by the company after passing of the interim order. Partly paid shares were issued prior to the interim order. They were only converted into fully paid shares after the interim order. It cannot be said that there is violation of the interim order passed by the Company Law Board under section 179(3)(a) of the Companies Act, 2013. The board of directors are entitled to make calls on shareholders in respect of money unpaid on their shares. So, the board of directors are well within the powers to make a call on the shareholders in respect of unpaid shares to make them as fully paid. The company is entitled to issue partly paid shares. The petitioner became shareholder long after the company issued partly paid equity shares. Therefore, there is no irregularity in converting the partly paid shares into fully paid shares. The applicant has not filed any material warranting for appointment of auditor for auditing the accounts. In fact, the petitioner was supplied financials for the financial years 2014-15, 2015-16, 2016-17. When such is the case there is no need for ordering auditing of the accounts of respondent No. 1-company. The petitioner has also filed one more application against the respondents under section 241 of the Companies Act, 2013 - there are no grounds to grant any relief in favour of the petitioner. Petition dismissed.
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