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2016 (3) TMI 33 - COMPANY LAW BOARD NEW DELHI

2016 (3) TMI 33 - COMPANY LAW BOARD NEW DELHI - TMI - Restoration of directorship - jurisdiction of this court conferred under sections 397 & 398 read with section 402 of the Companies Act, 1956 (for brevity 1956 Act) and section 59 of Companies Act, 2013 - prayer for issuance of an order restoring their directorship alongwith their rights to sign all the bank accounts of Respondent No. l-Company - Held that:- In the present case the petitioners have asserted in their pleadings that no notice of .....

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making a reference to a notice dated 5.6.2013. However, such an attempt is meaningless because in the absence of any specific averment in that regard in the pleadings no notice could be taken of such a document. Thus the document has not been made a part of the pleadings authenticated and duly signed by the respondent No. 2. It is elementary proposition of law that in the absence of pleadings no evidence could be adduced to prove a fact because the other side would be deprived of an opportunity .....

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declared null and void. Petitioner No. 1 is reinstated as director but he would not be entitled to sign any cheque because he has already withdrawn his bank guarantee.

Validity of transfer of share and its registration without a proper instrument of transfer - Whether the case of the respondent is covered by unnumbered proviso 1 of section 108 of the Act or that proviso is inapplicable? - Held that:- There is nothing on record first to establish that share transfer deed was ever execu .....

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oaded on the website of ROC, Kanpur within two weeks. The petitioners shall refund to respondent No.2 a sum of ₹ 13,52,500/- which is amount paid by respondent No. 2 for purchasing of shares within two weeks from the date of receipt of a copy of this order. - C.P No. 159(ND)/2013 - Dated:- 23-12-2015 - CHIEF JUSTICE M.M. KUMAR CHAIRMAN For The Petitoner : Mr. Sarwar Raza, Advocate, Mr. Pawan Sharma, PCS For The Respondent : Mr. Sabgram Patnaik, Advocate, Mr. Sunil Chaudhary, Advocate and M .....

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ectors as null and void. A further prayer has also been made to restore the shareholding of the petitioners in the Respondent No. l-Company and to declare annual return for the year 2013 showing transfer of petitioners' share as null and void with the consequential relief of rectification of the register of members maintained by Respondent No. 1-Company. A further prayer has also been made for termination of lease deed dated 03.05.2007 executed in favour of Respondent No. l-Company by Petiti .....

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held by the petitioner were transferred to R-2 in accordance with taw. Therefore, after hearing the learned Counsel on grant of interim relief I deem it necessary to direct the respondents as follows: (a) To maintain status quo on shareholding and fixed assets of the Respondent No. 1 Company as on today till further orders. (b) To maintain status quo on the Board of Directors as on today till further order; and (c) Not to hold any Board meeting without seeking prior approval of this Board. Lear .....

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ny and are also indulging in competitive business. Therefore, grant of permission to the petitioners to inspect the records of the Company would be detrimental to the interest of the company. After hearing the parties, I am of the considered opinion that equity could be balanced on both sides by directing the Registrar of Companies, Kanpur to authenticate the statutory records, Including the minute book of the Board Meetings and the AGM/EOGM and also the books of account of the Company at an ear .....

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statutory record however some of the documents were not authenticated which is reflected in the order dated 13.11.2014 which reads as under:- Arguments of Shri Sangram Patnaik, Id. Counsel for the Respondents were part-heard. During the course of hearing, he produced a photocopy of Minutes of Authentication of Records which is taken on record. He has also produced the following original share certificates:- Sl. No. Regd. Folio No. Certificate No. Name of the shareholders No. of shares 1 01 1 Mr .....

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ferred in favour of Sh. Abhishek Goel on 27.06.2013]. 90000 12 04 14 Ms. Prabha Goel 27500 13 05 15 Ms. Isha Goel 40000 14 08 16 Mr. Ishwar Dayal Goel & Sons (HUF) 12500 15 09 17 Mr. Sudhir Kumar Jain & Sons (HUF) 15000 16 02 18 Mr. Abhinav Goel 500 17 01 19 Mr. Ishwar Dayal Goel 250 Photocopy of aforesaid share certificates bearing faint signature and stamp of Sh. Alok Tandon, Asstt. Registrar of Companies have also been produced and taken on record. A perusal of the backside of photo-c .....

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ation by the A.R.O.C. that "only copy of share certificates" were produced and original share certificates were not produced before Shri Alok Tandon, Asst. Registrar of Companies, Kanpur. Shri Alok Tandon, AROC, Kanpur be summoned to appear before me on 03.12,2014. Bench Officer is directed to keep the aforesaid original share certificate as also the photocopies of the authenticated documents in safe custody in a sealed cover till further orders. List for remaining arguments of Sh. San .....

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The petitioner claims that Respondent No. 1-company was promoted by Respondent Nos. 2 & 3 and the Petitioner No. l. Respondent Nos. 2, 3, 4 & 5 are the controlling director of the company. 5. In the aforesaid backdrop it is now imperative to examine the case set up by the Petitioners. The petitioners' claim is that they jointly hold 33.1875% of the entire subscribed and paid up capital of the Respondent No. 1-Company. The authorized share capital of Respondent No. l-Company at the t .....

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the ROC. For highlighting the petitioners' shareholding they have placed reliance on the annual returns filed by the company in the year 2012. The petitioner has further claimed that there is a plot measuring 5257 sq, yards which is jointly owned by petitioner No. 2 Ms Savita Jain & Respondent Nos. 4 & 5 namely Ms Prabha Goel and Ms Esha Goel. It is thus claimed that the shareholding pattern and average between the parties was also designed on the same model of percentage and averag .....

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of negotiations with respondents. It was an oral settlement According to the settlement the petitioners were to leave Respondent No. 1-company on mutually agreed conditions which are as under:- (i) That considering inter-alia the turnover, good will and future prospects the value of settlement was arrived at ₹ 1.63 crores and for rounding up as share consideration equivalent it was determined at ₹ 120/- per share and accordingly respondents were to pay a sum of ₹ 1,62,30,000/- .....

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ers shall hand over the resignation letters from the directorship of R-l company and all the documents relating to the transfer of shares in favour of the Respondents. (v) That till the above conditions are concluded all the terms and conditions of running Respondent No. l would remain the same such as monthly salary of ₹ 40,000/- and proportionate rent to the petitioner etc. 8. The petitioners conceded that the respondents paid back the unsecured loan without any interest on 12.06.2013 an .....

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which is its face value. The allegations levelled by the petitioners are that a conspiracy was hatched by respondents in connivance with the Company Secretary Shri Sonu Nehra to oust the petitioners from the directorship of Respondent No. 1-company without complying with the terms and conditions of the settlement. The petitioners have claimed that they approached respondents by protesting against their acts of breach of agreement, oppression and fraud. They also expressed their willingness to p .....

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ighted mismanagement in conducting the affairs of the Respondent No. l-company on account of forged and fabricated record. Elsewhere, the respondents have however managed to nullify the notice concerning fraud and fabrication. 9. In para 5A an attempt has been made to highlight various acts of oppression and mismanagement. The petitioners have claimed that they were illegally removed from the directorship of Respondent No. l-company w.e.f, 27.06.2013. This illegality was perpetuated by sending t .....

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e petitioners, yet no special notice nor any notice purportedly calling EGM on 27.06.2013 was ever served on the petitioners. They were all kept in dark about the illegal activities which were carried on at their back. The petitioners have been removed as director without their consent and knowledge which violates Section 284 of the Act. These are the acts of mismanagement and oppression in respect of the affairs of Respondent No. l-company and the petitioner as well. 10. Respondent No. 2 and hi .....

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n the petition in a tabulated form which is as under:- Name of transferor Name of transferee No. of shares Sudhir Kumar Jain Ishwar Dayal Goel 20250 Sudhir Kumar Jain Abhinav Goel 95000 Savit Jain Ishwar Dayal Goel 5000 Sudhir Kumar Jain & Sons (HUF) Ishwar Dayal Goel 15000 11. The petitioners have also levelled allegations of diversion of company's fund by Respondent No. 2 for election purposes who had contested Municipal elections in June 2013, It is alleged that the company has large .....

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turing company and construct a factory on the said land and run the business. In this regards it was further decided that the ownership of the company would be held almost in the ratio of land holding i.e. 2/3rd and 1/3rd. Hence on 03.05.2007 the said land was leased to Respondent No. l-company for a period of 15 years on a yearly rent of ₹ 5000/- in total. It was later converted into monthly rent of ₹ 5000/- each. It is important to mention here that Respondent No. 1-Company constru .....

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No. 2 are in breach of the fiduciary duty. 13. It is pertinent to mention here that on 10.10.2007 Respondent No. 1-company availed a secured loan in the form of cash credit limit of ₹ 30 lacs and then availed term loan of ₹ 13.40 lacs from State Bank of India, Baraut Branch Uttar Pradesh, Respondent No. l-company had secured the loan on the basis of guarantee given by respondents and petitioners group. They also mortgaged the leased land alongwith the factory. On 05.02.2009 the said .....

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the said bank accounts in order to take over the entire control in their hands. However Respondent No. l-company continued with the personal guarantees of the petitioners towards the limits and secured loan enjoyed by Respondent No. l-company. It is highly prejudicial to the interest of the petitioners because respondents could carry out any transactions, the burden of which could fall over the petitioners. It is a serious breach of fiduciary duty by the Respondent No. 2 in his capacity as a Di .....

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cause of action. They were permitted to withdraw the same with liberty to file another one afresh. 15. Firstly an affidavit dated 06.03.2014 was filed and then the Respondents filed detailed reply on 13.5.2014. In reply a number of preliminary objections have been raised. Firstly the respondents have submitted that the petition is not maintainable in as much as the petitioners are not the shareholder of the Respondent No. l-company and they have already transferred their share to Respondent Nos .....

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g any oppression and mismanagement before establishing their entitlement to have the register of members rectify under section 59 of the Act, therefore, the prayer of the petitioners u/s 59 of 2013 Act has to be decided first. It has also been claimed that the issue of adequacy of price for transfer of share cannot be decided by this forum where the disputes are decided in a summary manner without any full- fledged trial. After admitting that the petitioners have received partial consideration t .....

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is completely mala fide and is founded on falsehood. 16. The relief concerning the termination of lease deed dated 3.5.2007 has also been opposed because the arrangement is purely contractual and cannot constitute a basis for filing a petition u/s 397 and 398 of the Companies Act. This piece of land has been utilized for construction of factory and if the lease is terminated then the Respondent No. l-company will have to vacate the premises which would cause heavy loss to Respondent No. l-compa .....

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guarantee in September 2013 which resulted in reducing the credit limit from ₹ 70 lacs to ₹ 43.5 lacs. Respondent No. l-company transacts its 80% business by cheques and payment are received by RTGS. Only 20% of the transactions are in cash because the purchase of wheels and axels by famers and agriculturists is in cash and many of them do not have bank accounts. 17. The allegations off siphoning off funds have been denied being false and vague. It has further been claimed that the .....

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y. The petitioners have decided to part with Respondent No. l-company on account of need of funds to set up his own business in competition with Respondent No. l-company. Both the petitioners and Respondent No. l-company have been transacting business of wheel and axels. The respondent have further claimed that there has been no agreement to purchase the share @ Rs. l20/- per share. The petitioners have actually transferred their shares at face value of ₹ 10. Accordingly a sum of ₹ 1 .....

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ares. All these facts go to prove that the petitioners consciously withdrew themselves from the affairs of the Respondent No. 1-company and the filing of present petition is only an afterthought by concocting false allegations against the respondents. 19. Under the heading acts of oppression and mismanagement the respondent did not file any reply and on 10.1.2014 this forum passed an order granting time to the respondent to file documents to substantiate that shareholding of the petitioners have .....

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ideration, the purported transfer is not in compliance of the mandatory provisions of section 108 of the Companies Act, 1956 as no transfer deed was executed. It is further pertinent to mention here that no share certificates have ever been issued by Respondent No. l company and it appears that the Respondents may have also played fraud and forgery to effectuate the purported transfer of shares and have conspired to illegally transfer the valuable share held by the Petitioners in Respondent No. .....

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onsideration of ₹ 13,52,500/-. The above said payment of ₹ 13,52,500/- was made vide cheque Nos. 323301 for ₹ 9,50,000/-, cheque No. 323353 for ₹ 50,000/-, cheque No. 323354 for ₹ 1,50,000/- and cheque No. 323355 for ₹ 2,02,500/-. On the reverse of the cheques it has endorsed that the cheques have been issued for share transfer of Respondent No. 1 company's shares. Accordingly, after receipt of the said amount the petitioners have handed over share certifi .....

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ing the Memorandum and Articles of Association of the company and share transfer deed issued by the Petitioners alongwith a few other documents and for that I lodged a complaint with the police station Baraut on 15.06.2013, True copy of the complaint is annexed herewith as Annexure: R-5." (Emphasis supplied). 21. It is thus evident that no regular reply was filed controverting the averments made in the petition concerning execution of transfer deed and then in pursuance of order dated 10,1. .....

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alia, transfer deed executed by the petitioner. In that regard a complaint was lodged with the Police station Baraut on 15.6.2013. 22. The petitioners have filed a rejoinder to the reply filed by the Respondent and have reiterated the averments made in the petition. They have reiterated that no transfer deed in favour of the respondent has ever been executed for transferring 1,35,250 shares and therefore no valid sale transaction have ever taken place. The claim of the respondent based on the an .....

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respect of their new venture, the petitioners have submitted that there was no agreement between the parties that such an independent entity could not operate to carry on any business. It has also been reiterated that no notice of calling a purported EGM on 27,6.2013 was ever served on the Petitioner. 23. The Respondents have filed another affidavit in response to the rejoinder filed by the Petitioners. In the affidavit filed on 25.8.2015 the application filed by the petitioner before CJM Bhagpa .....

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length. 25. Learned counsel for the petitioner has raised the following submission before me:- 1. There was no special notice given for holding of EGM to remove the petitioner as Director. The petitioners have been illegally removed from their office of directorship w.e.f. 27,6.2013 as reported to the ROC by filing E-Form No. 32 on 4.7.2013. All that has been done without affording any opportunity to the Board to represent against any such removal and in gross violation of the mandatory provisi .....

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m and articles of association was lost is all concocted story which is liable to be thrown out. Therefore transfer of share is liable to be set aside. 3. There was an oral understanding between the parties which is inferable from various acts of the petitioners and the respondents. They had agreed to pay ₹ 120 per share and the total amount calculated was ₹ 1.63 crores which have never been paid. 26. In support of his submission learned counsel has placed reliance on a judgment of th .....

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there is no bar that before passing an order of rectification the issue of oppression and mismanagement cannot be adjudicated. In that regard reliance has been placed on the judgment of Supreme Court in the case of Ammonia Supplies Corpn. (P.) Ltd. v. Modern Plastic Containers (P.) Ltd. [1998] 17 SCL 463. For the same proposition the petitioner has piaced reliance on the judgment of the Madras High Court rendered in the case of N.S. Nemura Consultancy India (P.) Ltd. v. A. Devarajan [2010] 155 C .....

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it may think fit Reliance has also been placed on the spirit of section 56(1) of the Companies Act, 2013 which provides where instrument of the transfer has not been delivered within prescribed period of sixty days then the company is free to register transfer on such terms as to indemnity as the Board may think fit. Learned counsel has further argued that the version of the respondents to have lost the bag containing the transfer deed is authentic and not a concocted one. The allegation of the .....

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r is sub-judice before the court of competent jurisdiction. 28. Learned counsel for the respondents have further argued that once the original share certificate were handed over to by the transferor then the loss of transfer deed would be insignificance especially when the price of the share has been paid by cheque. 29. It has further been submitted that the petitioner group is no more the shareholder in the R-1 company on the date when the instant petition was presented. If the present case is .....

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ach of an agreement and no adjudication under sections 397 and 398 of the Act could take place. In that regard reliance has been placed on a judgment of this Board rendered in the case of Heeral Constructions (P.) Ltd. v. Blue Pearl Developments (P.) Ltd. [2009] 150 Comp Cas.234 (CLB-chennai). Reliance has also been placed on the other judgment of Company Law Board in the case of K. Venkatachalam v. Premier Roller Floor Mills Ltd. p[2012] 111 CLA 266. 31. Learned counsel has also submitted that .....

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ourt. 32. It has also been argued that all provisions of sections 167 and 284(2) read with section 190 of the Act have been complied with. A Board meeting was held on 4.6.2014 to call EGM on 27.6.2013 at 10.30 am preceding the requisition received under section 169 of the Act. There is no violation any codal formalities. 33. It has lastly been argued that there is no act of mismanagement and oppression in respect of Respondent No. 1-company which may warrant Injunction by this Board, Therefore i .....

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y or on behalf of the transferor and by or on before of the transferee is valid and if not then the effect thereof. III. Whether the case of the respondent is covered by unnumbered proviso 1 of section 108 of the Act or that proviso is inapplicable. 35. Before embarking upon discussion of the aforesaid issues it would first be necessary to clear the mist created by host of preliminary objections raised by the respondents. The Respondents have claimed that the petition for rectification under sec .....

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l/3rd of the total shareholding of Respondent No. l-company. It is well settled that in such a situation a petition for rectification of Members' register is maintainable by the erstwhile member irrespective of the fact whether the petitioner qualifies in terms of section 399 of the Act at the time of filing of the petition. 36. In that regard reliance may be placed on the judgment of the Supreme Court in the case of World Wide Agencies v. Mrs. Margaret T. Desor [1990] 67 Company. case. 607 .....

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petition u/s 397 and 398 Hon'ble Supreme Court observed that it would be "wrong to insist that their names must be first put on the register before they can move an application u/s 397 and 398. This would frustrate the very purpose or necessity of action" and to went on observe as under:- ....... it was contended on behalf of the appellant before the High Court that if legal representatives, who were only potential members or persons likely to come on the register of members, are p .....

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transfer forms whereas in the case of legal representatives it is the deceased member who is shown on the register and the legal representatives are in effect exercising his right. A right has devolved on them though the death of the member whose name is still on the register. In our opinion, therefore, the High Court was pre-eminently right in holding that the legal representatives of deceased member whose name is still on the register of members are entitled to petition under sections 397 and .....

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claims to be member and have challenged insertion of the names of respondents in the register of members by removing their names. They may succeed or fail in their challenge but their locus standi to file a petition for rectification as well as highlighting mismanagement/oppression cannot be questioned. Thus their petition cannot be thrown at the threshold. Any contrary view would result in high-jacking the company by those who have entered the register of membership illegally. Entry of such pe .....

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of this case which reads thus: 1. . . 2. . . 3. The Tribunal may, on an application made by a depository, company, participant or investor or the Securities and Exchange Board of India, if the transfer of shares or debentures is in contravention of any of the provisions of the Securities and Exchange Board of India Act, 1992 (15 of 1992) or regulations made thereunder or the Sick Industrial Companies (Special Provisions) Act, 1985 (1 of 1986) or any other law for the time being in force, within .....

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. 39. A bare perusal of these provisions shows that Company Law Board is clothed with the jurisdiction to entertain an application made by a depository, company or a participant. This Board can then pass order to rectify register of members or any other record it if finds contravention of any provision of Securities and Exchange Board of India Act, 1992 or regulations made thereunder or SICA or any other law for the time being in force. 40. The Judgment in the case of World Wide Agencies (supra) .....

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Tubes Ltd. would be fully applicable to the facts of the present case because the averments made by the petitioner to make to invoke the jurisdiction of the Court under sections 397 and 398 are not necessarily destructive of the averments which he is required to make in a case seeking entry in the register of membership. Such a view was taken by the Supreme Court in World Wide Agencies case (supra) when a petition for winding up was filed u/s 433(f) read with sections 397 and 398 of the Act. The .....

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as been deprived off an opportunity of participation in the EGM and also making a representation against his removal as director. At this stage it would be appropriate to notice the provisions of s. 284 which are set out below for facility of reference:- 284. Removal of directors.- (1) A company may, by ordinary resolution, remove a director (not being a director appointed by the Central Government in pursuance of section 408) before the expiry of his period of office: Provided that this sub- se .....

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oportional representation. (2) Special notice shall be required of any resolution to remove a director under this section, or to appoint somebody instead of a director so removed at the meeting at which he is removed. (3) On receipt of notice of a resolution to remove a director under this section, the company shall forthwith send a copy thereof to the director concerned, and the director (whether or not he is a member of the company) shall- be entitled to be heard on the resolution at the meeti .....

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send a copy of the representations to every member of the company to whom notice of the meeting is sent (whether before or after receipt of the representations by the company); and if a copy of the representations is not sent as aforesaid because they were received too late or because of the company's default, the director may (without prejudice to his right to be heard orally) require that the representations shall be read out at the meeting:" 43. A bare perusal of section 284(2) woul .....

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is sent. In any case if copy of the representations is not sent as per requirement of sub-section (4) then the proviso postulates that the representations must be read out at the meeting. 44. In the present case the petitioners have asserted in their pleadings that no notice of the EGM was given. In the reply filed by the respondents on 12.5.2014 or in the rejoinder the aforesaid assertion made by the petitioners has not been controverted specifically. Only a bald statement has been made withou .....

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document has not been made a part of the pleadings authenticated and duly signed by the respondent No. 2. It is elementary proposition of law that in the absence of pleadings no evidence could be adduced to prove a fact because the other side would be deprived of an opportunity to meet the case of Respondent. Moreover the mode of service adopted for sending notice has remained a mystery. Therefore, I am of the considered view that removal of petitioner No. l as a director of respondent No. l com .....

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e and its registration without a proper instrument of transfer is valid and if not the effect thereof. III. Whether the case of the respondent is covered by unnumbered proviso 1 of section 108 of the Act or that proviso is inapplicable. 46. Both these questions are taken up together as they are interlinked. The law concerning transfer of share is codified and is free from any ambiguity. Sections 108 to 112 of the Act deal with the transfer of shares and debentures. Section 82 of the Act provides .....

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nstrument of transfer duly stamped and executed by or on behalf of the transferor and by or on behalf of the transferee and specifying the name, address and occupation, if any, of the transferee, has been delivered to the company along with the certificate relating to the shares or debentures, or if no such certificate is in existence, along with the letter of allotment of the shares or debentures: Provided that where, on an application in writing made to the company by the transferee and bearin .....

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ny shares in, or debentures of, the company has been transmitted by operation of law, (1A) Every instrument of transfer of shares shall be in such form as may be prescribed, and- (a) every such form shall, before it is signed by or on behalf of the transferor and before any entry is made therein, be presented to the prescribed authority, being a person already in the service of the Government, who shall stamp or otherwise endorse thereon the date on which it is so presented, and (b) every instru .....

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scribed form to the prescribed authority under clause (a) or within twelve months] from the date of such presentation, whichever is latter; (ii) in any other case, within two months from the date of such presentation." 48. A bare perusal of Sections 108(1) and 108(1A) of the Act reveals that an essential condition for registering transfer of shares is that a duly stamped instrument satisfying the requirements of this provision must be delivered to the company. Further, it must be accompanie .....

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by the Share Certificate Rules and then alone the transfer can be effected on production of the duplicate. 50. It is important to notice the use of words "shall not register" in section 108(1). It indicates that the provision is mandatory in character and that it would be unlawful to register a transfer unless the requirements of this section are fulfilled. In Mannalal Khetan's case (supra) Hon'ble Supreme Court while construing the expression 'shall not register' occur .....

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transferee. The deed executed by the transferor alone does not pass the title in the shares to the transferee. 52. Section 108(1) further postulates that transfer form as prescribed must be signed by the transferor or on his behalf as well as by the transferee or on his behalf. There is a statutory form No. 7B which is prescribed form required to be filed by transferor and transferee. The signature of both transferor and transferee are required to be attested by witnesses. The aforesaid share tr .....

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section 108, the prescribed authority shall be the Registrar, or such other authority as the Central Government may from time to time appoint in that behalf by notification in the Official Gazette, (2) An instrument of transfer shall be in Form 7-8 set forth in Annexure A. [(2A) An instrument of transfer in respect of counter receipt allowed to be traded by Over The Counter Exchange of India (OTCEI) shall be In Form 7BB.] (3) When an instrument of transfer is presented to the prescribed authori .....

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ed or endorsed by the prescribed authority on or before the 30th day of July, 1988. [Provided further that] when the said instrument is sent to the prescribed authority by post, it shall be accompanied by a self-addressed envelope with the requisite postage stamps for the return of the instrument to the sender. (4) Every application to the Central Government for extension of time under sub-section (ID) of section 108 shall be made in Form 7C and shall be accompanied by the instrument of transfer .....

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f the Registrar to stamp said form or otherwise make endorsement on the form with the date on which it was presented. 55. When the facts of the present case are examined in the light of the aforesaid statutory requirement no transfer deed was presented to the Registrar, Kanpur. It is further case of the petitioner that respondent No. 2 has played fraud with him by illegally transferring 1,35,250 shares without execution of any transfer deed by him. The existence of transfer deed itself has been .....

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dings is that the petitioner had agreed to exit from the respondent No. l-company and start their own business. They also agreed and have transferred on 15.6.2013 their total shares numbering about 1,35,250 to him and to his family members for a total consideration of ₹ 13,52,500/ which was paid in the form of various cheques. The share certificates were handed over to respondent No.2 after the receipt of the amount along with share transfer deed on 15.06.2013. It was thereafter respondent .....

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re confidence and is full of doubts. 58. A perusal of interlocutory order dated 13.11.2014 passed by this court would show that reference has been made to the minutes authenticating the record by the Assistant Registrar of Companies. According to the order only copies of share certificates were produced and the original share certificate were not produced before Shri Alok Tandon, Assistant Registrar of Companies. The position of the original share certificate reflected in the order is that the b .....

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s forum about transfer of shares because it had not taken placed in accordance with law. The then Chairman observed that prima facie an appraisal of the documents does not satisfy the requirement of law as sufficient material to substantiate that the share held by the petitioner were transferred to Respondent No.2 and went on to issue interim directions. 59. On the performa of transfer deed signatures of both transferee and transferor are required to be appended. The further requirement in the F .....

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to prove loss of a document it must first be established that such a document existed. The petitioners' case is that no transfer deed was ever executed which means such a documents has not ever came into existence. The First and foremost duty of respondent No.2 was to meet the assertion made by the petitioner and put forward the affidavit of attesting witnesses to prove the existence of the documents. The theory of lost documents is a stock excuse and is not possible to accept the same unti .....

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of a prudent man. Furthermore, the stamp duty is required to be affixed. It has not been pointed out who amongst transferee and transferor purchased stamp duty and the amount paid for the stamp duty. Even the affidavit of stamp vendor or his register have not been produced. The transfer of share at its face value of ₹ 10/- also raises a doubt keeping In view the turn over, goodwill and further prospect of the respondent No. 1 company. 61. The theory propounded in the complaint before the .....

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he directors in respondent No. 1 company and respondent No. 2 is at the helm of affairs. He alongwith other respondents are close relatives. Therefore to say that respondent No. 1-company was satisfied with regard to loss of documents would again be a self serving act violating the basic cannon of justice namely no one can be judge in his own cause. Respondent No. 2 on behalf of respondent No. 1-company could not have resorted to transfer of shares and sent intimation to the Registrar of Compani .....

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absence of an original instrument is it possible to loose it? As earlier observed that the existence of original has not been prima facie shown. How can there be then satisfaction of the Board of director which comprised of respondent No. 2, the transferee himself and his associates. They felt easily satisfied as it is a self serving conduct negated by rudimentary principles of natural justice (A.K. Kraipak v. Union of India AIR 1970 SC 150) and no one can be judge in his own cause. Therefore R .....

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