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1965 (4) TMI 126

ORDER H.R. Khanna 1. This petition under Section 155 of the Companies Act 1956 has been filed by Shrimati Soma Vati against the Lord Krishna Sugar Mills Limited, Delhi (hereinafter referred to as the Company) and others for rectification of the register of members of the Company by restoring therein the name of the petitioner. Prayer has also been made for payment of dividends payable in respect of the shares in question, to the petitioner. 2. The Company is a public limited Company having its registered office at Chand Hotel, Chandni Chowk, Delhi. The Company has a Sugar Mills at Saharanpur and it is also now carrying on the business of manufacturing textiles. According to the allegations of the petitioner she is a shareholder of the Company owning shares in the share capital of the Company as detailed below ; "(a) 792 Ordinary 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 pet .....

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by paying the calls made thereon and allowed those shares to be forfeited, in respect of which a resolution was passed by the Directors of the Company on 9th November, 1947. Those shares, after being forfeited, were taken up by respondent No. 9 who thereafter paid 45 per cent of the call money. So far as fully paid up shares of the petitioner were concerned, it is stated that they were sold on 4th January, 1948 in enforcement of the lien of the Company for its dues. The respondents have denied that the thing was done surreptitiously or in furtherance of a scheme of fraud. The petitioner, it is stated, had full knowledge of all the facts and circumstances in which the shares were forfeited and sold. 4. On 24th January 1964 Gurdev Singh J. passed an order that the particulars of fraud given by the petitioner were insufficient 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 particu .....

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herself and her son As against that, Chaman Lal, Assistant Secretary of the Company, has been produced on behalf of the respondent. 7. Section 155 of the Companies Act deals with the power of Court to rectify the register of members and provides that if the name of any person is without sufficient cause, entered in the register of members of a company, or after having been entered in the register, is, without sufficient cause, omitted therefrom; or default is made, or delay takes place in making the necessary entry on the register, the person aggrieved, or any member of the Company, may apply to the Court for rectification of the register. This section corresponds to Section 38 of the Companies Act, 1913 and Section 116 of the English Companies Act, 1948. Although the power conferred by the section on Courts is very 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 investigatio .....

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aise the objection at an early period. Having regard to the delay of two years and the complexity of the questions involved, I am of opinion that this is not a fit case for the exercise of my jurisdiction under Section 38. The applicant has got his remedy by a regular suit, in which all the matters which he wants to urge before me can be properly enquired into. I accordingly refuse the application but leave the parties to bear their own costs in this Court." In Bhagat Singh, v. Piar Bus Service Ltd., Amritsar, decided by Tek Chand J., the head-note, which is based upon the body of the judgment, reads as under : "The object of enacting Section 38 of the Companies Act of 1913, which is analogous to Section 155 of the Companies Act of 1956, was to provide a summary remedy in non controversial matters or in 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 Cour .....

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iture, has also been assailed on the ground that it was got passed with ulterior motive and without notice to the petitioner. Likewise, there are allegations that the whole thing was done stealthily and the petitioner, it is claimed, was not served with the notices which are stated to have been sent by the respondent, and she remained Ignorant about the forfeiture and sale of her shares. The petitioner in the course of her statement made on Commission admits that about 10 or 12 years ago she asked her sons to enquire about her shares and when no information was received she asked her sons about 8 or 9 years ago to file a suit to assert her rights. Question would consequently arise as to when the petitioner actually came to know of the forfeiture and sale of her shares. The Court would also have to decide as to whether the claim of the petitioner in respect of her shares, which were forfeited and sold in 1947 and 1948, is within time, and this question may itself hinge upon the decision on facts. As all these are complicated matters which can only be adjudicated after recording evidence, it would, in my opinion, be not proper to go into them in the summary proceedings under Section .....

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