TMI Blog2011 (8) TMI 969X X X X Extracts X X X X X X X X Extracts X X X X ..... f the petition is only to be allowed at an initial stage if there is absolutely no doubt that the petition is not maintainable. instant petition is not to be dismissed at the threshold. - CA No. 518 of 2007, CP No. 154 of 2007 - - - Dated:- 30-8-2011 - VimlA Yadav, J. Inderjeet Singh, Ashish Makhija and Ms. Poulami Pathunda for the Petitioner. Kaustush Shukla, Krishna Kumar and Predeep Kar for the Respondent. ORDER 1. In this order I am considering Company Application No. 518/2007 filed by Shri Chetan Gupta, practising company secretary, challenging the maintainability of CP No. 154/2007 on the ground that the petitioners do not have the requisite qualification under section 399 of the Act to maintain the company petition under sections 397, 398, 402, 403 of the Companies Act, 1956 ('the Act'). 2. CP No. 154/2007 was filed by Shri Balraj Malhotra and others against Srijee Estates Investment (P.) Ltd, and others alleging oppression and mismanagement and seeking declaration that the Board meeting held after 28th October, 2006 as null and void and all the resolutions passed at any meeting be declared void and invalid. The applicant's case is that the pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nted out that there are nearly 36 shareholders of the company and the petitioners hold no shares at all. All the shareholders have been duly issued the share certificate and the allotments have been made in terms of the Board resolution passed form time-to-time in accordance with law. 5. The applicant has pointed out that the company has filed a written complaint to the RoC, which is annexed to the petition at pp. 251, 252 and in the subject-matter of proceedings under section 234(1) of the Act. Till the issues are decided in favour of the petitioners the company cannot recognise the petitioners as shareholders or members of the company. The petitioners also cannot claim to be members without producing any evidence in favour of any such allotment apart from self made interpolated and created documents. 6. It was contended that the present petition has been filed only to harass the respondent-company and to prevent the company from carrying out its activities pertaining to real estate, development of land and setting up of motels. The primary and the only consideration of the petitioners have been to prevent the company from carrying on these activities by making false alleg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was placed on annual return on 26th March, 2007 filed by R1-company. It was shown that the digital signatures of R3 appear on page 32, R2 and 3 have signed the annual return physically. It was stated that R3 has not denied the fact that Form 20B relating to annual returns clearly indicate that the petitioners, namely, Balraj Malhotra, Binny Malhotra and Arjun Malhotra were allotted shares to the extent of 50 per cent of the total equity capital. 9. My attention was also drawn to the certificate issued by Shri Vika Katyal, the R1-company wherein it has been clearly stated that on the basis of the books of account and documents and records of R1-company produced to them, Balraj Malhotra, Binny Malhotra and Arjun Malhotra contributed a sum of Rs. 1,00,000, towards share application on various dates, namely, 3rd April, 2006 and 8th April, 2006. It was further certified that the said share application money of Rs. 1,00,000, was converted into share capital on 5th April, 2006 and 10th April, 2006 by allotment of 1000 shares of Rs. 100 each and the details of allotment were also stated in the said certificate. The counsel for the petitioner also showed the income-tax returns of Balraj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n many places, the petitioners have averred that it is for the respondents to disprove the allegations by proper evidence. It is a settled law that the burden of proof lies on the person making allegations of fraud, etc., to prove the allegations. Therefore, we are unable to sustain the allegations in this regard." 10. I have considered the rival submissions and the case law cited by the parties. There is no dispute with the case law cited. Each case turns on its own facts. In the facts and circumstances of this case it is noted that Company Application No. 518/2007 has not been filed by any of the respondents. Only a practising company secretary, namely, Shri Chetan Gupta has filed this company application. Shri Chetan Gupta, PCS has stated in his affidavit that he is the practising company secretary and dealing with the affairs of the R1-company and is fully conversant with the facts of the case. No respondent has challenged maintainability of the company petition. Shri Chetan Gupta is not a respondent. Nor has he filed any authority for having been authorised to file this company application. The counsel for the R1-company (not for the applicant) has rightly pointed out the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ature and it has to be interpreted as mandatory having regard to the text and context of the statute irrespective of the fact whether any prejudice is caused. In terms of section 399 of the Act the members fulfilling the requirements thereof have the right to allege oppression and mismanagement in the affairs of the company and can file petition in terms of the said sections. In view of the aforesaid unambiguous provisions of the Act, petitioners are required to satisfy the Company Law Board that petitioner(s) individually or together hold the requisite percentage of shares in the company. It is the requirement of the law that petition under sections 397 and 398 has to accompany documentary evidence in proof of eligibility and status of petitioner(s) that the voting power held by each of them is as per provisions of section 399 of the Act. In other words petitioner(s) has/have to meet the requirement under section 399 either in terms of the number/percentage of shares or in terms of number of shareholders. But it is also correct that, it has been held in a number of cases that if the shareholding of the petitioner(s) in a petition under sections 397 and 398 of the Act got reduced t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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