TMI Blog1965 (4) TMI 126X X X X Extracts X X X X X X X X Extracts X X X X ..... ry shares of ₹ 10/- each, fully paid, No. 76359 to 77150; 184 Deferred Shares of ₹ 5/- each, fully paid, No. 12317 to 12500: and (b) 5385 Ordinary Shares of ₹ 10/- each, partly paid, No. 107116 to 112500; 3684 Deferred Shares of ₹ 5/- each, partly paid, No. 31317 to 35000. The shares mentioned at (a) were purchased by the petitioner from Seth Shiv Prasad (deceased) father of respondents 2 to 7 and Seth Bimal Prasad in September 1941, while shares mentioned at (b) were allotted to the petitioner about 2 or 3 years later. The petitioner did not receive any dividend after the acquisition and allotment of the above-mentioned shares nor did she receive any notice from the Company. The petitioner sent a registered letter dated 18th of November, 1961 to the Company complaining that the management had kept her in the dark about the affairs of the Company. She then received a reply dated 19th of December 1981 that the petitioner was not the holder of any shares in the Company. It is stated that the petitioner then got the records of the Company in the office of the Registrar of Companies examined and came to know that her shares had been shown as forfe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficient to amount to an averment of fraud of which notice could be taken. The petitioner was, accordingly directed to furnish the necessary particulars of fraud. It was also directed that inspection of documents in possession of the Company be given to the petitioner's counsel or her son at the registered office of the Company. The petitioner thereafter gave particulars of fraud. Briefly stated, according to these particulars, there were three blocs of shareholders of the Company in 1946. One bloc, which had a majority of shares, was represented by Seth Shiv Prasad and his associates, while the other two blocs were represented by Seth Banarsi Dass who was another brother of Seth Shiv Parshad and his wife Shrimati Ham Murti Devi, and the petitioner. Ram Murti Devi applied for winding up of the Company in Lahore High Court. The application was accepted by Teja Singh J., but on appeal the matter was compromised Seth Shiv Prasad thereafter with an ulterior motive and without notice to others got passed a special resolution amending the Articles of Association so as to include therein clauses enabling the forfeiture of fully paid up shares. It is further stated that on inspection of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry wide, the law seems to be well settled that the remedy provided by the section is summary and can be invoked in non-controversial matters requiring quick decision. The provisions are not meant to be used for deciding disputes necessitating investigation. Where the dispute is of a complicated nature and there is controversy under several heads and a regular investigation is necessary, the section ought not to be allowed to be used and the party concerned should be directed to proceed by way of regular suit. The law in England on the subject has been stated in Halsbury's Laws of England, Third Edition, Volume 6, Page 218 : The application may be made by the person aggrieved, or any member of the company, or the company. The application must be made to the court having jurisdiction to wind up the company. It may be by motion or summons or by action commenced by writ. If the court thinks that the case, by reason of its complexity or on the ground that there are matters requiring investigation or otherwise, could more satisfactorily be dealt with by an action, the court will decline to make an order on a motion, without prejudice to the right of the applicant to institute an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... matters where a quick decision was necessary in order to obviate an irreparable injury to a party This provision was not intended for settling controversies under several heads necessitating a regular investigation. When serious disputes are involved the proper forum for their adjudication is a civil Court. It no longer admits of controversy that the jurisdiction of a Court in matters of rectification of register under Section 38 of the Companies Act, 1913, now under Section 155 of the new Act, is unrestricted though the petitioner is not entitled to relief ex debito justitiae. This remedy is not available to the litigant as of right without the Court having discretion to refuse it. Where there is a controversy, and the several allegations made by the petitioners are being questioned and in order to arrive at a correct conclusion, a regular and detailed investigation is desirable. In such a case the petitioner should be directed to proceed by a regular suit. Where the Company forfeited the shares of a shareholder who was a cashier of the Company, on the ground that a certain amount was due from him to the Company on account of defalcation, but the shareholder denied the defal ..... X X X X Extracts X X X X X X X X Extracts X X X X
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