TMI Blog2007 (1) TMI 614X X X X Extracts X X X X X X X X Extracts X X X X ..... tation depends upon the date when cause of action and disputes arose between the parties with reference to the shareholding of the appellants. The Hon'ble High Court had directed the CLB to consider and examine in depth the issues regarding limitation and shareholding and pass a detailed order considering the material, evidence and documents placed on record in this regard. Accordingly, the matter was listed for hearing and the detailed arguments of the parties were heard. In CP No. 69/2003 the petitioners have prayed that their shareholding as on 31.3.1988 in the respondent company which deals in real estate should be treated as proper shareholding; that the deposits and interests on deposits may be directed to be paid; that the guilty persons responsible for making/maintaining different records of balance sheets, profit and loss accounts and annual general meetings for the financial years 1.4.1987 to 31.3.1994 which are in accordance with law be prosecuted. 2. Shri V. Hari Pillai, counsel for the petitioner argued that a bare perusal of the Annual Accounts, including the list of shareholding (pg.161 of Paperbook), filed on behalf of the respondent company before the Inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent of shares. Till date, the respondents while not having denied the total sum deposited by the petitioners in the company, have not given any explanation as to how they have treated the amount paid by the petitioners towards allotment of shares. The said sum does not find mention in any of the books of the company, for obvious reasons. It is noteworthy that the list of loans of the company as on 31.3.1988 (pg.40 of the Paperbook) tallies exactly with the amount claimed by the petitioners in the above referred affidavit/chart, thus making it obvious that the balance amount was actually against allotment of shares and none else. Alongwith the Chart/Affidavit, the petitioners have also annexed with the details of the payments made to the company. It was vehemently argued that a perusal of the Annual Returns filed on behalf of the company on 1.8.2000 for the period 1987-88 onwards (pg.165 of the Paperbook), clearly reveals that the same is a fraudulent exercise, done with ulterior motives. Firstly, at page 170, it is seen that the Annual Return for 1987-88 does not contain the signatures of two directors as is statutorily required under Section 161 of the Companies Act. The said A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... company having admitted both the sets of Annual Accounts viz. one filed before the Income Tax Department under the audit of M/s ML Khanna and the second one filed before the Registrar of Companies for the same period (pg.88 of the Paperbook) reveals that, while the totals remain the same, the internal contents of the Balance Sheets are materially different from each other. Thus, it makes it amply clear that the respondents have perpetrated a fraud upon not only the petitioners but also the statutory authorities, solely with the motive of depriving the petitioners of their rightful shareholding. It was argued that the respondents have till date refrained from producing the original Register of Members before this Hon'ble Board or before the Hon'ble High Court. They have sought to adopt the plea that since the registered office of the company was in the office of ML Khanna and Co.they do not have the original Register of Members with them. It is obviously a plea of convenience, in so far as under no circumstance can the company abdicate its responsibility of producing the original Register of Members. It is plain that the company is avoiding to produce the original Register ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e reference to the shareholding of the appellants (petitioners herein). A perusal of the records of the present petition reveals that the petitioners came to know about the changed shareholding only when the certified copies of the Annual Returns/other documetns filed by the Company before the Registrar of Companies on 1.8.2000, were made available to them on 27.12.2001. However, even if it is presumed for the sake of arguments (without conceding it to be so) that the petitioners had been aware of the changed shareholding when the Annual Returns were filed on 1.8.2000 itself, yet the present petition having been filed on 17.3.2003, is well within the prescribed period of limitation. Lastly, it was argued that not only have the respondents denied the rightful shareholding of the petitioners but have also indulged in committing offences under Sections 539,540,541,542 and 628 of the Companies Act. 4. The counsel for the respondents contended that the petitioner group was never a shareholder. The petitioner group admits to the fact that no share application was ever made to the company, there was no allotment notice, no money receipt and the petitioner group never held any shares ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e claiming to be shareholders of the company merely on the basis of a list of shareholders filed with the income-tax department in the year 1988 and thereafter in the year 1994. Firstly there is no statutory requirement to file a list of shareholders in the Income Tax department. Then in the succeeding years from 1989 to 1994 no such list is filed by the petitioner group with the tax authorities. Again from 1994 till today no returns are filed by the petitioner group anywhere or in the ROC as well. It was argued that according to the petitioner group, they came to know that the company has filed annual returns with ROC in the year 2000 and even then they never disputed it in any forum. The only dispute whatever with Shri Arun Kumar Khanna was settled and the appeal was withdrawn by him. This petition is filed by the petitioner group only after the demise of Shri Arun Kumar Khanna. Further, it was argued that mere payment of money to the company and trying to tally the figures with the list of shareholding filed in the year 1988 with income tax authority without statutorily required to do so, is no evidence of shareholding in the respondent company. The proof of payment in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave failed to refute the allegations levelled against them. Preliminary objections raised by the respondents are not tenable. Respondents' preliminary objection that the petition is barred by limitation cannot be accepted. Respondents' case is that 1988 matter has been agitated in the year 2003 after such inordinate delay. I find that the cause of action arose on 1.8.2000 when the respondents filed the Annual Returns and other documents with the ROC under the Amnesty Scheme. But the petitioners became aware of it on 27.12.2001 when certified copies were made available to them by the ROC. Even if the respondent impute knowledge to them, the earliest they could have known the change in shareholding was on 1.8.2000. The petition was filed on 17.3.2003. CLB is a court of equity. Equity does not fix a specific time limit but considers the circumstances of each case in determining whether there has been such delay as to amount to laches. The doctrine of laches is based on equitable consideration and depends upon general principles of justice and fair play. To be laches delay should be such that it could be said that the petitioner is not entitled to relief on account of gross neg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave not advanced any argument as to how two different sets of documents were filed -one before the Income Tax Department on 28.3.1989 and onwards and another before the ROC under Amensty scheme on 1.8.2000 for the earlier period beginning with 1987-88. Respondent company's contemporaneous statutory records could have set the controversy at rest. CLB's register of members was not complied with. Only plea given was that the records including the said register were in the office of M/s. M.L. Khanna and Co. related to the petitioner. This plea cannot be accepted. If the petitioners had the register they would derive no benefit by not producing it. Rather producing it would prove their case. On the other hand, the respondent company is under obligation to maintain its statutory records. In the absence of statutory record, more reliance can be placed on the contemporaneous record with the Income Tax Department and the list of shareholding circulated in the first AGM.Both these documents have been signed by two directors including R-2). Signatures have not been denied. Chronological record reveals the true picture which supports the petitioners' case when compared with the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat even if, for arguments sake it is assumed that the petitioner group was a shareholder, the petition is not maintainable under Sections 397/398 of the Act as the petitioner group was holding only 175 shares if 75 shares belonging to Shri Arun Kumar Khanna group deserves to be excluded as he had settled the matter and withdrawn the appeal consequently and hence the petitioners hold less than 10% of total shares of 2000, cannot be accepted in view of the fact that the petitioners hold the authorization of the legal heirs, Shri Arun Kumar Khanna has since expired and this fact has not been controverted by the respondents. Furthermore, the Hon'ble High Court has held that in Civil Suit No. 199/2000 filed by Shri Arun Kumar Khanna against Mr. Vinod Kumar Kapoor, M/s V.K. Kapoor and Associates Pvt. Ltd. (to which the petitioner were not parties), the Civil Court vide its order dated 4^th August, 2000 had merely relegated the parties to the Company Law Board and had not decided any dispute or controversy on merit. Further, it was held that the order of the Civil Judge did not decide the subject matter before the Company Law Board and cannot operate as res-judicata. 7. The respon ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
