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2007 (11) TMI 681

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..... egistered office of the company. 2. The undisputed facts of the case are: M/s. South Asia Human Rights Documentation Centre P. Ltd. and Others (respondent No. 1) was incorporated on September 18, 1998, having its registered office at 6/6, Safdarjung Enclave Extension, New Delhi-110 029. The authorised share capital of the company is ₹ 50,00,000. The issued, subscribed and paid-up share capital of the company is ₹ 1,00,020 comprising of 10,002 equity shares of ₹ 10 each fully paid. The main objects of the company are to carry on the business of dealing in all kinds of economic, legal, sociological and historical, information, documentation and media services, consultation and software services. Petitioner No. 1 and respondent No. 4 were the only two subscribers to the memorandum of association and articles of association. They were equal shareholding directors of respondent No. 1 company. 3. Shri Sunil Gupta, counsel for the petitioner prayed that the hon'ble Board may please consider Whether the petitioner's 5,001 shares (50 per cent. shareholding) in respondent No. 1, South Asia Human Rights Documentation Centre P. Ltd. (hereinafter, SAHRDC ) were .....

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..... egarding the transfer of petitioner's 50 per cent. shares is clear from the fact that in the annual general meeting dated September 30, 2003, no date of registration of transfer of shares with respect to the alleged transfer of the petitioner's 50 per cent. shareholding to respondent No. 2 has been mentioned. Furthermore, at the same page in respondent No. 1's annual return (annual general meeting dated September 30, 2003) at page 110 neither the date of registration of the alleged transfer of shares of the petitioner to respondent No. 1 has been given nor is the date of registration of the alleged transfer of shares by respondent No. 2 to respondent No. 3 given. It was contended that clearly, when the annual return for the year 2003-04 (annual general meeting dated September 30, 2003) states that respondent No. 2 was inducted as a shareholding director on May 30, 2003 and respondent No. 3 on September 4, 2003, in that case it is strange that the respondents were not aware regarding the date of transfer on September 30, 2003, i.e., four months after the alleged transfer vis-a-vis respondent No. 2 and, further, 26 days vis-a-vis respondent No. 3. The said fact clearly .....

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..... retext, respondent No. 1 is refusing to comply with the Company Law Board's order dated May 29, 2007, respondent No. 1 on June 8, 2007, i.e., on the last day for compliance, agreed to give inspection. During the inspection (on June 8, 2007), respondent No. 1 was not able to produce any of the documents of which inspection was sought and/or granted by the Company Law Board. There was no document available with respondent No. 1. Further, the inspection report dated June 8, 2007, was accepted and/or received by Ms. Sharada K., respondent No. 3 herein for and on behalf of respondent. No. 1. 8. Further, Shri Gupta argued that assuming without admitting that the instrument of transfer/transfer deed allegedly executed by petitioner in favour of respondent No. 2 is untraceable. None the less, respondent No. 1 ought to have had the register of members, the alleged instrument of transfer/transfer deed executed by respondent No. 2 in favour of respondent No. 3 for the alleged transfer of 2,500 shares actually belonging to the petitioner. Strangely, even these documents were not available with respondent No. 1 and, further, the respondents have neither filed nor made any averment regard .....

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..... and Mrs. Promila Bansal v. Wearwell Cycle Co. (India) Ltd. [1978] 48 Comp Cas 202 (Delhi) (paragraph 13). 11. It was argued that Tribunals have not been held to be courts for all purposes and as a matter of fact with reference to the applicability of the Limitation Act it has been held that the Limitation Act is not applicable to Tribunals. Even, the Company Law Board has itself held that it is not governed by the provisions of the Limitation Act. In the alternate to the aforesaid, it was submitted that delay or laches do not disentitle the shareholder to an equitable relief. Further, mere acquiescence, waiver or laches does not defeat the grant of an equitable relief. Even assuming (without admitting) there was delay in the filing of the petition this could not deprive the petitioner of the right to agitate. Technicality cannot defeat the cause of justice unless such a technicality goes to the root of the matter. Reliance was placed on the decision in Farhat Sheikh v. Escman Metalo Chemical P. Ltd. [1991] 71 Comp Cas 88 (Cal). (paragraph 11) It was pointed out that the entire transaction relating to the alleged transfer of the petitioner's 50 per cent. shares in respondent .....

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..... ove case, the petitioner had himself in his petition sought a rectification of the register of members, which was not allowed by the hon'ble court. The court observed as under (page 124): Learned Counsel for the petitioners was unable to cite any case in which such a course had been permitted, and in my opinion he will never be able to do so, since I consider that a petition under Sections 397 and 398 can only be maintained by a person or persons who are shown as members in the register of the company, and if the persons who wish to file such a petition are not shown as members rightly or wrongly they must file the register before they can bring a petition. 14. It was argued that in the absence of being a member of the company, the petitioner's attempt at invoking the provisions of Sections 397 and 398 is not maintainable and merits dismissal on this ground alone. It was contended that as such, the present petition deserves to be dismissed on account of failure of the petitioner to show qualification in terms of Section 399 of the Companies Act, 1956. Further, it was argued that the process of rectification is provided under Section 111 of the Companies Act, 1956, w .....

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..... itioner, nothing was done till 2000. The petitioner is not entitled to the reliefs claimed and the learned judge rightly dismissed writ petition as it is not maintainable. 17. Further, it was argued that the petition of the petitioner pertaining to alleged actions in September 2003 after a period of four years in April 2007 clearly suffers from laches being inordinately delayed. The present petition is not as a result of any illegality committed by the respondents but is a result of cases filed by a trust against the petitioner, which the petitioner is attempting to avoid by means of abusing the process of this hon'ble Board. The ulterior motives of the petitioner in filing the present petition is evidenced from the petition itself, i.e., the various cases filed by the respondents against the petitioner. The petitioner is attempting to misuse the process of this hon'ble Board solely as a counterblast to the cases filed by the South Asia Human Rights Documentation Centre Trust on account of the illegalities perpetrated by the petitioner with a view to illegally pressurize the said South Asia Human Rights Documentation Centre Trust to withdraw the cases filed by it against .....

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..... e case. It is pointed out that since termination of his relationship with respondent No. 1 company, in the year 2003, the petitioner with utmost deliberate and mala fide intentions set about the harm the reputation and goodwill of SAHRDC Trust, respondent No. 1 and respondent No. 4, Mr. Ravi Nair. The petitioner conspired with his accomplices who were also the employees of respondent No. 1 and committed theft of the computer database of the SAHRDC Trust besides illegal and unauthorised hacking of the information and cyber systems of the SAHRDC Trust to make unsolicited gains from the clients/customers of the Trust and to thereby wean away the sources of revenue of the trust to this organisation. The SAHRDC Trust and the respondents got to know of this illegal act only when the loyal clients/customers informed the respondents about the unlawful and unethical practices of the petitioner. Aggrieved with the illegal and unlawful act of the petitioner, the SAHRDC Trust filed a compliant with P.S. Sarojini Nagar under various provisions of the Copyright Act, Information Technology Act and IPC against the petitioner and his accomplices. Despite best efforts, the police did not register a .....

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..... s customers and friends and relatives of respondent No. 4. The petitioner even went to the extent of setting up a fake organisation under the name corruption watch and indulged in forgery. The SAHRDC Trust has filed a criminal complaint against the petitioner contending commission of offence of forgery, which is pending trial before the court of Metropolitan Magistrate, New Delhi. It was pointed out that it has come to the knowledge of the trust in September 2006, that the petitioner breached his contractual obligations prevailing between the SAHRDC Trust and the petitioner and thereby coedited and authored the editorial and two chapters of the joint work of International Work Group for Indigenous Affairs (IWGIA), and Asian Indigenous and Tribal Peoples Network Publication titled Racism Against Indigenous Peoples IWGIA Document, 2001 in the year 2001. It was also found that the petitioner had plagiarized and copied, word by word, parts of documents that were originally researched, written and produced by the SAHRDC Trust. 21. Counsel for the respondents reiterated that the present petition is evidently motivated and is a counter-blast to the cases filed against the petitione .....

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..... bers of a company are entitled to make an application in virtue of Sub-section (1), any one or more of them having obtained the consent in writing of the rest, may make the application on behalf and for the benefit of all of them. (4) The Central Government may, if in its opinion circumstances exist which make it just and equitable so to do, authorise any member or members of the company to apply to the Tribunal under Section 397 or 398, notwithstanding that the requirements of Clause (a) or Clause (b), as the case may be, of Sub-section (1) are not fulfilled. (5) The Central Government may, before authorising any member or members as aforesaid, require such member or members to give security for such amount as the Central Government may deem reasonable, for the payment of any costs which the Tribunal dealing with the application may order such member or members to pay to any other person or persons who are parties to the application. 23. In view of the aforesaid unambiguous provisions of the Act, the present petitioner does not have the necessary qualification to be able to present a petition under Sections 397 and 398 of the Act. The respondents have rightly pointed out .....

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