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TMI Blog2017 (5) TMI 1274X X X X Extracts X X X X X X X X Extracts X X X X ..... ita Prabhu. 2. Counsel for the Petitioner initiated his arguments. However, Counsel representing the Respondents drawn our attention to the fact that the Petitioner is no longer a shareholder in the 1st Respondent Company. The Counsel for the Respondents stated that vide Resolution dated 26-12-2013 passed in the meeting of the Board of Directors of 1st Respondent Company, it has been resolved to cancel the share certificates of Mr. Subramaniam Suresh bearing Share Certificate No. 09. The decision was taken by the 1st Respondent Company in exercise of its first and paramount lien on all shares of the Petitioner, pursuant to Regulation Clause (7)(2)(b) of the Articles of Association which provides that the company shall have first and paramo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3) came to be filed on l8-06-2013 before the CLB which stood transferred to NCLT and renumbered as TCP 119 of 2016. Counter to the Petition has been filed by the Respondents on 24.3.2014, the copy of which is stated to have been provided to the Counsel for the Petitioner wherein the Respondents very clearly mentioned under Para 41 of the said counter that the shares of the Petitioner have been cancelled in exercise of the powers conferred on the Board of Directors under Regulations 7(2)(b) of the Articles of Association of the company, because the amount which was due and payable by the Petitioner to the company have not been paid, due to which the company has exercised its lien on the Petitioner's shares. However, right from the day i. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from the Petitioner as shareholder." The Hon'ble High Court of Calcutta case in Unity Company (P.) Ltd. v. Diamond Sugar Mills AIR 1971 Cal. 18, held that "the validity of the Articles cannot be and has not been impeached or questioned. The Articles of the Association of the company on the basis of which any particular person becomes a member of the company constitutes a valid and binding contract between the members of the company inter se". 6. In the light of the above stated legal position, the company has rightly exercised its lien over the shares of the Petitioner. Therefore, the Petitioner is no longer share holder in the company w.e.f. 26.12.2013. Hence, the Petitioner cannot continue with this Petition after cancellation of h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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