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Ashish Das Gupta Versus Satvinder Singh and Anr.

2000 (1) TMI 1017 - COMPANY LAW BOARD, NEW DELHI

Company Petition No. 18/186/98-CLB [Alongwith Company Petition No. 38 of 1999] - Dated:- 31-1-2000 - S. Balasubramanian, Vice-Chairman and C.R. Mehta, Member For the Appellant: Rakesh Khanna and Tamali Sengupta, Advs. For the Respondent: V.K. Jain, Adv. and K.G. Somani, Chartered Accoutant ORDER C.R. Mehta, Member 1. M/s Parwanoo Enterprises (P) Ltd. (hereinafter referred to as 'company') is a company incorporated in the State of Himachal Pradesh under the provision of the Companies Act, .....

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it is not possible for the company to do so due to non-cooperation amongst the only two directors/shareholders of the company. It is alleged that due to non-cooperation of the respondent, it has become impossible to function in a normal manner resulting in non-finalisation of accounts for the year 1996-97 and 1997-98, non-holding of Board meetings after March, 1998, and non-holding of annual general meeting after the last one held on 30.9.1996. It is further alleged that the company has only tw .....

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general meeting held on 30.9.1997. In his reply, he further disputed the contention of the petitioner regarding the shareholding pattern claimed by him. It is further submitted that the respondent and Shri Bhushan Ahuja are the directors of the company and the petitioner has been removed from the directorship of the company due to misappropriation of the funds of the company. Alongwith his reply, he also filed certified copies of the annual return made as on 30.9.1997; balance sheet as at 31.3. .....

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ons are that false, fabricated and forged documents have been filed with the Registrar showing petitioner having ceased to be director of the company and appointments of Shri Bhushan Ahuja as the director of the company. It is further alleged that with a view to show that respondent holds more than 50% of the equity capital of the company in the following manner: S. No. Name of shareholders Number of shares 1. Satvinder Singh 2,000 2. Sh. Ashish Das Gupta 1,000 3. Ashish Das Gupta jointly 1,000 .....

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bought 1,000 equity shares from Shri Narendra Nath and family, one of the original co-promoters of the company and another 1,000 equity shares from Sirmour Sudberg Auto Ltd. and thus became 50% shareholder of the respondent-company. It is further stated that in the year 1995, the petitioner purchased balance 2,000 equity shares from Shri Praveen Kant and Shri R.R. Garg (1,000 shares from each of them) and the said shares were transferred in the name of the petitioner as first named shareholder .....

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Registrar of Companies duly signed by the petitioner as well as respondent and the contents of the same stands admitted. 6. According to the petitioner, later on forged/fabricated annual return as on 30.9.1997 has been filed with Registrar of Companies, Jalandhar, showing the shareholding pattern as under: Name of shareholder Number of shares 1. Ashish Das Gupta 1,000 25% 2. Ashish Das Gupta jointly with Satvinder Singh 1,000 25% 3. Satvinder Singh 2,000 50% 6.1 It is also alleged that the dire .....

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nual return made upto 30.9.1997 was also filed on 22.9.1999. The Form No. 32 was signed by Shri Satvinder Singh, respondent, and has been filed almost after 2 years from the purported dates of happenings. So also, annual return made as at 30.9.1997 has been filed almost after one and half year. (2) The petitioner was shown to have ceased from the directorship of the company with effect from 28.8.98 in terms of the provision of Section 283(1)(g) of the Act for not having attended three consecutiv .....

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turns and balance sheet and the Form No. 32 filed after the aforesaid annual returns as at 30.9.1996 are forged and fabricated. 7. It is submitted that balance sheet as on 31.3.97 does not disclose the correct position of the assets and bank balances of the company as on that date. It is further submitted that alleged meeting of the Board of directors stated to have been held on 31.3.97 could not have been held as it was not attended by the petitioner, who was travelling and, therefore; the ques .....

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283(1)(g) of the Act 8. Shri K.G. Somani, Chartered Accountant, on behalf of the respondent, invited our attention to the annual return filed for the period 1986 to 1995 and submitted that these are registered documents with RoC and depicts the correct position of the shareholders and directors of the company as under: S. No. Directors Date of appointment 1. Ashish Das Gupta 30.12.1985 2. Satvinder Singh 20.12.1986 3. Praveen Kant 30.12.1985 4. R.K. Garg 20.10.1986 5. N.K. Mehandidatta 20.10.19 .....

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i further submitted that on 6.10.95, Shri Praveen Kant and Shri R.K. Garg sold their shares to Shri Ashish Das Gupta and Shri Satvinder Singh. Later, on 7.10.95, Shri Ashish Das Gupta sold his interest in these 2,000 shares to Shri Satvinder Singh. Thus, Shri Satvinder Singh became the owner of these 2,000 shares. He further submitted that necessary transfer deeds were duly executed by S/Shri R.K. Garg and Praveen Kant in favour of Shri Satvinder Singh. Shri Ashish Das Gupta also acknowledge the .....

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r deed to Shri Satvinder Singh on 7.10.95. He further submitted that the shareholding position as depicted in the annual return made as on 30.9.97 as indicated hereunder is the correct shareholding position of the company. Shareholder Number of shares 1. Ashish Das Gupta 1,000 2. Ashish Das Gupta jointly with Satvinder Singh 1,000 3. Satvinder Singh 2,000 4,000 10.1 In view of this, he submitted that respondent holds the majority of shares of the company ; however, taking advantage of the fact t .....

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company and affairs of Sirmour Sudberg Auto Ltd. referred in the respondent's reply and submitted that such acts are relevant to the present petition under Sections 397/398 of the Act, because this Board has to determine as to who has committed the acts of mismanagement and oppression in this case. According to him, the petitioner has destroyed and fabricated the records of the company which is evident from the fact that he took away the statutory records of the company from the registered o .....

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ed that the shareholding pattern of the company as existed on the share certificate has been admitted by Shri Satvinder Singh under his own signatures in Annexure II attached to the annual return made up to 30.9.1996. It is further stated that the shareholding pattern as claimed by the petitioner has been again admitted by respondent in the averments made in para 2 of his reply in the petition filed under Section 186 of the Act. The relevant portion of the reply of the respondent in para 2 of th .....

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l v. Kalyan Mal AIR 1998 SC 618, also in JT 1988 (2) SC, He further submitted that admission of documents means admission of facts contained in the documents as held in Sitaram Motilal Kalal v. Santanuprasad Jaishanker Bhatt AIR 1966 SC 1697. 14. He denied the allegation of having made any endorsement on the share certificate without any proper authority. He also denied that 2,000 equity shares were purchased by Shri Satvinder Singh, respondent from Shri R.K. Garg (since deceased) and Shri Prave .....

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now produced allegedly executed in his favour are fabricated and are not corroborated by the facts admitted by respondent. 15. He further submitted that respondent is claiming the ownership of 2,000 equity, shares transferred from Shri Praveen Kant and Shri R.K. Garg in his favour on the strength of transfer deeds executed on 7.10.95, and so also receipt, dated 7.10.95 of Shri Ashish Das Gupta indicating that after jointly purchasing the shares with Shri Ashish Das Gupta, he purchased his inter .....

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since the last annual return as at 30.9.96. 31.3.97 1,000 equity shares Transferred from Ashish Das Gupta to Satvinder Singh 31.3.97 1,000 equity share Transferred from Ashish Das Gupta to Satvinder Singh jointly with Satvinder Singh 15.1 Shri Khanna further stated that the petitioner has never sold the shares as alleged above. No transfer deeds have been signed by him and no such deeds have been produced by the respondent. He further submitted that if respondent's plea is to be believed tha .....

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the annual return made upto 30.9.96 which is signed by respondent as well as petitioner and admitted is the correct position. 16. With regard to the plea taken that subsequent annual returns filed with Registrar of Companies and duly registered by him reflects the true shareholding pattern and should be taken as such, Shri Khanna submitted that mere production of certified copies of documents filed with Registrar does not prove the same as the question of its admissibility involves that content .....

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Bhattacharya v. Union of India (1998) 2 Comp LJ 258 (Del): (1998) 91 Comp Cas 37 (Del) and submitted that in the light of the above referred decided case, mere registration of documents with Registrar of Companies does not necessarily reflect the correct position of the shareholding position and directorship of the company when it is disputed by the parties. 17. With regard to affidavit filed by Shri Praveen Kant and relied upon by the respondent, he submitted that the said affidavit contains fa .....

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30.9.91. He further submitted that verification of the affidavit does not disclose whether affirmations are on the basis of any records or personal knowledge of the deponent. He further submitted that this is contrary to the well-settled principles of law upheld by various courts and, therefore, has no evidentiary value. 18. With regard to the appointment of Shri Bhushan Ahuja as additional director in the Board meeting held on 31.3.97, he submitted that Shri Bhushan Ahuja was never appointed a .....

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ce of the petitioner, no proper AGM could have been held for want of proper quorum. 19. Similarly, regarding the cessation of petitioner as director of the company, no minutes or any other evidence regarding the non-attending of three consecutive Board meetings by the petitioner has been produced by the respondent. He further submitted, that no such valid Board meeting could have been held in the absence of the petitioner for want of quorum. He further submitted that the respondent has taken the .....

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end three consecutive meetings of the Board. He submitted that the respondent is not sure of his stand and defence and is blowing hot and cold in the same breath. 20. Shri Khanna denied that allegation of siphoning off of the funds of the company and submitted that the funds were withdrawn under the proper authority of the Board and accounted for and submitted that withdrawal of funds has been duly explained in detail by the petitioner in his reply relating to the affairs of the company so also .....

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ter relating to withdrawal of funds by the petitioner was duly explained in the pleadings and was not pressed by the respondent during the course of hearing. Further, we are also not concerned about the allegations relating to Sirmour Sudberg Auto Ltd. Thus, in these proceedings, we are required to deal with allegations relating to shareholding of the petitioners and respondent in the company and appointment and cessation of directors and holding of AGM. 22. Shri Khanna has taken the stand that .....

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ing the period 1986 to 1995. As the petitioner is claiming the shareholding in annual return made up to 30.9.1996 different from what is stated to be shown in the annual returns, it is necessary and in the interest of justice that the facts brought out and-in sur rejoinder and the reply filed thereto by petitioner be taken into consideration. 23. The petitioner is claiming that he has acquired 2,000 shares in the year 1986 (1,000 shares from Shri Narendra Nath and his family members and 1,000 fr .....

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hand, respondent is claiming that Shri Ashish Das Gupta acquired only 1,000 shares in his personal name in the year 1986 and another 1,000 shares were held in the joint names of Shri Ashish Das Gupta and Shri Satvinder Singh since 1986 and there is no change in the shareholding of the company as is evident from annual returns for the years 1986 to 1995. Further, the respondent claims that after purchase of the interest of Shri Praveen Kant and Shri R.K. Garg of 1,000 shares each by respondent a .....

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shares acquired on 7.10.95, reliance is placed on the transfer deeds executed by S/Shri Praveen Kant and R.K. Garg in his favour and a receipt from Shri Ashish Das Gupta, dated 7.10.95 of ₹ 10,000 having been paid by the respondent for acquiring his interest in these shares (R-4/36 to 38 of the respondent's reply). 26. The petitioner has categorically stated that as to from whom he has purchased the 2,000 shares in the year 1986 whereas the respondent has not placed on record as to fro .....

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s and addresses and number of equity shares' held under the heading 'directors and their relatives', it is indicated that Shri Ashish Das Gupta is holding 2,000 shares. The respondent's name is not appearing in the said list even though he was appointed as a director on 20.12.86. Thus, the position reflected in the annual return on which respondent is relying is self-contradictory. We further note that Shri Praveen Kant, in his letter, dated 23.8.1986 addressed to Risk Capital Fo .....

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e 21, page 26, of the reply to sur rejoinder under the heading 'Brief note on Parwanoo Enterprises (P) Ltd.' - the following has been stated : "The entire share capital of the above company was purchased by promoters named Shri Ashish Das Gupta, Shri R.K. Garg and Shri Praveen Kant in the ratio of 2 :1:1 respectively." 28. The above position is also reflected in the shareholding pattern of the directors and their relatives at page 11 of annual return made upto 30.12.86. The let .....

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t pages 5-6, which is contradicted on page 11 of the said return. Under the circumstances, we hold that in the year 1986 Shri Ashish Das Gupta acquired 2,000 shares in his individual capacity. 29. In regard to the 2,000 shares acquired in the year 1995, the petitioner's contention is that he acquired these shares and got them registered in the joint names of the petitioner and the respondent, whereas the respondent's case is that after acquiring these 2,000 shares jointly from Shri R.K. .....

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30. The aforesaid position is not only admitted in the reply but has also been admitted in the said annual return which is also signed by him. Now he is taking a contradictory stand that he acquired 2,000 shares in October, 1995, in his individual capacity. Further, in his reply to the petition under Section 186 in Annexure R-1, the certified copy of annual return made upto 30.9.97 has been filed. In para 2 of the said reply the following is submitted : "The shareholding pattern upto 30.9.1 .....

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ngh and Sh. Ashish Das Gupta 1000 25% equity 3. Sh. Satvinder Singh 2000 50% equity" 30.1 In the said annual return, following changes in the shareholding pattern have been indicated at Annexure III. DETAILS OF SHARE/DEBENTURE TRANSFERS SINCE DATE OF LAST ACM Date of previous AGM 30.9.96 Date of Transfer Type of transfer No. Ledger folio of transferor Transfer name Ledger folio of transfer transfer name 31.3.97 equity 1,000 13 Ashish Das Gupta 17 Satvinder Singh 31.3.97 equity 1,000 16 Ashi .....

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6. According to respondent, the shareholding pattern from 1986i to 1995 is as under: S. No. Shareholders Shares 1. Sh. Ashish Das Gupta 1,000 2. Sh. Praveen Kant 1,000 3. Sh. R.K. Garg 1,000 4. Sh. Ashish Das Gupta jointly with Satvinder Singh 1,000 4,000 32. According to respondent, he acquired the shares held by Shri Praveen Kant and Shri R.K. Garg on 7.10.95 and, if it is so, the shareholding pattern of the company as on 30.9.96 should be reflected as under: S. No. Shareholders Shares 1. Sh. .....

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fer) whereas the shareholding pattern in the annual return upto 30.9.97, Annexure-2, the shareholding pattern is shown as : S. No. Shareholders Shares 1. Sh. Ashish Das Gupta 1,000 2. Sh. Ashish Das Gupta jointly with Satvinder Singh 1,000 3. Sh. Satvinder Singh 2,000 4,000 34. The two positions claimed by him as on 30.9.96 and 30.9.97 are, therefore, contradictory. The respondent has not produced any transfer deeds duly executed by Shri Ashish Das Gupta and Shri Ashish Das Gupta jointly with Sh .....

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hri Ashish Das Gupta. The shares stand transferred on 6.10.95 in their joint names in the records of the company ; the transfer deeds, dated 7.10.1995 executed by these two persons cannot be acted upon by the company without mandatory compliance of the provisions of Section 108 of the Act. 35. It was submitted on behalf of the respondent that the share certificates have not been issued as per rules relating to issue of shares and have been endorsed in the name of petitioner under his own signatu .....

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ld that the shareholding of the company is as under: S. No. Shareholders Shares 1. Sh. Ashish Das Gupta 2,000 2. Sh. Ashish Das Gupta jointly with Satvinder Singh 2,000 4,000 36. Another point of dispute is regarding the appointment of Shri Bhushan Ahuja as additional director of the company on 31.3.97 ; the petitioner has emphatically denied of having attended any Board meeting in which Shri Bhushan Ahuja was appointed as additional director as he was travelling, and in his absence, the appoint .....

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ion that no Board meeting was held and he was never appointed as additional director. Further, Shri Bhushan Ahuja whose appointment is under challenge and who has been made one of the parties in the proceeding under Sections 397/398 of the Act has not taken part in these proceedings by filing the submission or appearing before this Board. Under the circumstances, we hold that Shri Bhushan Ahuja was never appointed as an additional director of the company. 37. Another point of dispute relates to .....

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0.9.97. Consequently, appointment of Shri Bhushan Ahuja as regular director of the company and so also adoption of the accounts for the year 1996-97 has not taken place. 38. In the Sections 397/398 petitions, respondent has also claimed that the petitioner has ceased to be the director of the company with effect from 28.8.1998 pursuant to the Section 283(1)(g) of the Act for having not attended three consecutive Board meetings; the required Form No. 32 for his cessation has also been filed almos .....

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efore, hold that Shri Ashish Das Gupta continues to be a director of the company, and the present Board of directors consists of Shri Ashish Das Gupta and Shri Satvinder Singh. 39. The petitioner has also alleged that the accounts prepared for the year 1996-97 does not reflect the correct position of assets and bank balance of the company. We have gone through these accounts and note that there is only one transaction in the profit and loss account, i.e., of audit fee of ₹ 2,500 on expense .....

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pages 39 and 40 attached to petitioner reply to sur rejoinder which do not tally with the figures of bank balance shown for these two banks in the balance sheet as at 31.3.97 filed by the respondent with Registrar of Companies. Further, the number of shares held by the company in Sirmour Sudberg Auto Ltd. are also not correctly reflected. Therefore, the petitioner's contention that the balance sheet as at 31.3.97 does not reflect true and correct position - appears to be correct. 40. Having .....

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ctions to convene a general body meeting with the stipulation that even the presence of a single shareholder would constitute a valid quorum for the meeting. As far as the second petition is concerned, we have already given our findings on the prayer relating to the shareholding in the company as well as the appointment of the 3rd respondent as an additional director. There is another prayer in the second petition that we should order removal of the 2nd respondent from the directorship of the co .....

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