TMI Blog2006 (8) TMI 655X X X X Extracts X X X X X X X X Extracts X X X X ..... up share capital. Even after the allotment of the shares impugned in the petition, the petitioners constitute more than 1/10th of the total membership. Thus, in the pleadings, the petitioners have established that they are qualified in terms of Section 399 of the Act to file this petition. In view of this, I need not have to consider any of the objections raised by the respondents on the maintainability. Yet, the main ground for challenge on the maintainability is the discovery of the alleged Will subsequent to the date of filing of this petition. However, in the application seeking for dismissal, there is no mention about the Will nor the prayer for dismissal is based on the alleged Will. Only in the rejoinder, a copy of the alleged Will has been enclosed. The learned Counsel for the petitioners relevantly cited certain decisions to the effect that the maintainability of the petition in terms of Section 399 has to be examined with reference to the facts that stood on the date of filing the petition. Therefore, I hold that the present petition, in terms of the averments in the petition, is maintainable and cannot be dismissed on the basis of the demurer application by the res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sought including investigation into the affairs of the company. 3. When the petition was mentioned on 27.4.2006, and interim reliefs sought, the respondents filed an application CA 133 of 2006 challenging the maintainability of the petition in terms of Section 399 on various grounds and sought for dismissal of the petition. The grounds raised in the application are (1) case No. 134 of 1998 relating to grant of succession certificate is still pending in the court of District Sessions Judge and till the same is decided the petitioners will have no locus standi as their names are not in the register of members. (2) Suit No.870 of 1996 is pending before Delhi High Court wherein the father of the petitioner himself had claimed that all properties of the family are HUF properties. (3) Civil Appeal No.4492 of 1992 is pending before the Supreme Court whereby the Supreme Court has appointed an Administrator/Receiver to protect and safeguard all the properties of the family till the issue of succession and partition of various parties is decided. It is further stated in the application that late Maharaj Jagat Singh was divorced from his wife Priya, the mother of the petitioners and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pany rejected the application. Thus the petitioner therein had undisputed title to the shares. In the present case, there is no succession certificate and there is a Will disinheriting the petitioners. In fact, Raj mala has already applied for probate of the Will. In terms of Section 399, one has to establish undisputed title to the shares, which in the present case, the petitioners cannot establish. Even though, in the proceeding relating to succession certificate, the family members had admitted that the petitioners were entitled for the said certificate, subsequent discovery of the Will would negate all the admissions made in that proceeding. 5. Shri Sarkar appearing for the company submitted: Even though the petitioners attained majority in 1997 and 1999, they never applied for transmission of shares in their favour. In terms of Article 18 of AOA of the company, only a person entitled to the shares can apply for transmission and therefore while applying for transmission, it should be established that the person applying for transmission has undisputed entitlement. In the present case, the petitioners have claimed 1/3rd each of the shares held by late Maharaja Jagat Singh. Wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petition, there was no doubt about the entitlement of the petitioners to 2/3rd of the shares held by the deceased. In Rajahmundry Electric Supply Corporation Ltd. v. Nageshwar Rao AIR 1956 SC 213, it has been held that validity of a petition must be judged on the facts as they were at the time of presentation and a petition which was valid when presented, cannot cease to be unmentionable by reasons of events subsequent to its presentation. In S. Vardharajan v. Venkateshwara Solvent Extractions Private Limited 1995 4 CLJ 287, the Madras High Court has held that the requirement as to the share qualification is relevant and material only at the time of institution of a proceeding. Similar decision has been given in LRNK Narayanan v. The Puthuthotam Estates Limited 1992 MLJ 253. Since on the day of presentation of the petition, there was no dispute relating to the entitlement of the petitioners to 2/3rd shares of the deceased, the subsequent discovery of the alleged Will has no bearing on the maintainability of the petition. Further, it is a settled law that the maintainability has to be decided on the basis of averments contained in the petition alone accepting the plea therein as cor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n admitted fact that the entitlement of the petitioners to the shares of their father was never challenged till 5th May, 2006 when they filed this petition. When Section 213 of the Indian Succession Act prohibits even an executor or a legatee from claiming under a Will without a probate in judicial proceedings, third parties like the present respondents cannot rely on this un-probated Will to un-suit the petitioners. 8. I have considered the pleadings and arguments of the counsel. At the outset, it is necessary to point out that in examining the maintainability of a petition under Sections 397/398 as a preliminary issue, only the jurisdictional aspect in regard to the cause of action and qualification aspect have to be considered and not other factual aspects whether the petitioners had sought for transmission of the shares, whether further issue of shares was made with the knowledge and consent of the petitioners and whether the petitioners can hold shares without RBI permission, whether the company could register the transmission etc., have be considered only after the pleadings are completed. As far as the jurisdictional aspect is concerned, the main cause of action is that a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate, through the legal representatives must be enabled to petition in respect of oppression and mismanagement and it is as if the estate stands in the shoes of the deceased member. We are of the opinion that this is a correct view. It may be mentioned in this connection that succession is not kept in abeyance and the property of the deceased members vests in the legal representative on the death if the deceased . This makes it abundantly clear that the legal heris of a deceased member can file a petition under Sections 397/398 of the Act irrespective of the fact whether their names are in the register of members or not. 10. After having held so, the next issue for consideration is whether in facts of the present case, the petitioners are entitled to file this petition. It was urged by Shri Choudhary that even though the petitioners, by being the children of the deceased member, are natural heirs, they cannot be considered as legal heirs in view of the Will of the deceased disinheriting the petitioners. In other words, according to him, they are barred by law in terms of Section 399, to maintain this petition. It is a settled law, as has been reiterated by the Supreme Court recen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... endants in the written statement. In Exphar Sa v. Eupharma Laboratories Ltd2004 3 SCC 688 para 9, it was ruled that where an objection to jurisdiction is raised by way of demurrer and not at the trial, the objection must proceed on the basis that the facts as pleaded by the initiator of the impugned proceedings are true. The submission in order to succeed must show that granted those facts the court does not have jurisdiction as a matter of law. In this case, the decision of the High Court on the point of the jurisdiction was set aside as the High Court had examined the written statement filed by the respondents in which it was claimed that the goods were not at all sold within the territorial jurisdiction of the Delhi High Court and also that respondent No. 2 did not carry on business within the jurisdiction of the said High Court. Following the same principle in Indian Mineral Chemicals Co. v. Deutsche Bank 2004 12 SCC 376 paras 10 and 11, it was observed that the assertions in a plaint must be assumed to be true for the purpose of determining whether leave is liable to be revoked on the point of demurrer . 11. Having referred so, the Supreme Court held The statement in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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