TMI Blog2018 (7) TMI 1965X X X X Extracts X X X X X X X X Extracts X X X X ..... s celebrated at Kou Samui, Thailand then how on 14.02.2014, these shares certificates duly signed by Mrs. Smiti Golyan were available in Delhi with respondent No. 1 company. No transfer of shares belonging to petitioner No. 1 has ever taken place in accordance with the provisions of Section 108 (1) (a) of Companies Act. It has also been established that so-called gift deed and the writings prepared on 23.01.2014 with a manipulated document cannot be regarded as an expression of free Will to gift 466600 shares to respondent No. 1 company reflected through 19 share certificates and the same is vitiated in the eyes of law. Petition allowed. - C.P. NO. 27 (ND) OF 2015 - - - Dated:- 4-7-2018 - MR M.M. KUMAR, PRESIDENT AND MR R. VARADHARAJAN, MEMBER (JUDICIAL) For The Petitioner : Virender Ganda, Sr. Adv., S. Raza, Mohd. Waseem Akram, Shobhanmahanti and Ms. Ojasvee Gupta Advs. For The Respondent : Dr. U.K. Chaudhary, Sr. Adv., Ms. Ranjana Roy Gawai, Ms. Vasudha Sen, Ms. Srishti Kapoor And Mr C.P. Vig JUDGMENT MR M.M. Kumar, President Yash Golyan, his grandfather and grandmother, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ard may deem fit and proper in the facts and circumstances of the present case. 2. Facts necessary for disposal of the instant petition are that M/s. Nulon India Limited-respondent No. 1 was incorporated with the Registrar of Companies, NCT of Delhi and Haryana on 08.05.1987 vide CIN No. U52110DL1987PLC027908 with Mahabir Prasad Golyan, being its promoter director. Initially, it was known as M/s. Hitech International Private Limited and later on changed its name as M/s. Nulon India Limited on 06.07.1987 when it was also converted into a Limited Company. Its registered office is situated at Nulon House, Ishwar Nagar, 10th Milestone, Mathura Road, Delhi-110 065. It is a closely held family company as the family members and the group company hold all the shares. Petitioner No. 2, Mahabir Prasad Golyan appears to be a force behind incorporation of Nulon India Limited and has been its promoter-director. Respondent No. 3-Shri Krishan Kumar Golyan (father of petitioner No. 1) was inducted as a director and shareholder of the company. 3. The authorised share capital of Nulon India Limited is ₹ 1,00,00,000 (Rupees One Crore only) divided into 10,00,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nerated out of the aforesaid activities. 5. The Petition reveals some peculiar facts. Shri Yash Golyan-petitioner No. 1 is son of Mr. K.K. Golyan-Respondent No. 3. In order to show that Yash Golyan-petitioner No. 1 has been holding 55.55% shares of the entire issued and paid-up capital in Nulon India Limited, the original Annual Return and Audited Balance Sheet for the year 2014 has been placed on record as Annexure P-l and the revised annual return as P-2. Petitioner No. 2 is also promoter director of Nulon India Limited, who is grandfather of petitioner No. 1. He holds 100 shares in Nulon India Limited. Petitioner No. 2 is father of Respondent No. 3 and father-in-law of respondent No. 2 and grandfather of petitioner No. 1. 6. Petitioner No. 3 holds 3,15,100 equity shares of ₹ 10/- each constituting 37.51% of the entire subscribed and paid-up capital of Nulon India Limited. She is mother of Krishan Kumar Golyan-respondent No. 3. 7. Mrs. Smiti Golyan is respondent No. 2 (the beneficiary of alleged gift of share) and wife of Krishan Kumar Golyan-respondent No. 3 and daughter-in-law of petitioner Nos. 2 3 and real mother of petitio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4. Smiti Golyan (R-2) 34, Western Avenue, Sainik Farm (Earlier known as 171-A, Sainik Farm), New Delhi-110062. 1,500 0.17 5. Nulon Global Limited, Nulon House, Tribhuwan Complex, 10th Milestone Mathura Road, Ishwar Nagar, New Delhi-110065. 36,500 4.34 6. Yash Golyan (P-1) 34, Western Avenue, Sainik Farm (Earlier known as 171-A, Sainik Farm), New Delhi-110062. 466,600 55.55 7. Parul Golyan 34, Western Avenue, Sainik Farm (Earlier known as 171-A, Sainik Farm), New Delhi-110062. 5,100 0.60 Total 840,000 100 9. The pattern of shareholding changed after the alleged illegal transfer and the same is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4 and 5. 11. The petitioner has also pleaded about strained relations which developed between the petitioners and respondent Nos. 2 and 3 in the month of August, 2014. On 02.02.2015, respondent Nos. 2 and 3 left the family house and started living separately at different place in Panchsheel Park. He took away all the original documents lying at one place including the personal file belonging to the petitioners. 12. The petitioner realized that the certificates representing his share capital in respondent No. 1 company were misplaced/lost and in that regard, an email was sent to respondent No. 1 company with a request to issue duplicate share certificates. The petitioner sent several communications through emails, letters and registered post thereby informing the respondents that he had misplaced/lost the original share certificates and requested them for issuance of duplicate share certificates. When no reply was received, the petitioner again sent a reminder mail on 23.02.2015. The company-respondent No. 1 through its official, Mr. Ajay Sharma belonging to Accounts Department sent a reply and required the petitioner to send some documents in order to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... called Board Meeting dated 14.02.2014 is non-existent and wholly illegal. 14. The petitioner has also asserted that the auditors in their audited financial statements and in original Annual Return for the financial year 2014 had shown petitioner No. 1 as the majority shareholder (Annexure R-1). The audited Balance Sheet has been unanimously adopted by the Board of Directors of respondent No. 1 company consisting of petitioner No. 2- and respondent Nos. 2 and 3. However, subsequently revised Annual Return was filed (P-1), which is full of doubts as it contains pages which are not in sequence, some pages bear same numbers followed by unnumbered old page with stapler mark appeared to be taken out of some earlier Annual Return. There are allegations of tampering of signatures and request has been made that respondent be directed to produce the original so that truth of tampering maybe established before this Tribunal. Referring to the reply to the unamended petition, the petitioners have asserted that the written reply was a mockery of all the established principles which refers to allegations of personal data on the part of the petitioners. 15. It is the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igned in August, 2012 and the restaurant was made operational in February, 2013. He was then sent to USA for training with M/s. SF Franchising LP which further involved huge spending. However, petitioner No. 1 did not take any serious interest in running the restaurant and did not visit it for days together. The restaurant suffered huge losses and was closed in March, 2014. 17. On account of huge money spent on his education, to set up restaurant business and other expenses, which were borne by respondent Nos. 2 3 and on account of feeling of guilt caused by huge losses suffered, petitioner No. 1 gifted the share held by him in two companies, i.e. Nulon India Ltd. and Nulon Global Limited to his mother-respondent No. 2 in January, 2014 on the occasion of silver anniversary celebration of his parents in February, 2014 in Koh Samui, Thailand. To that effect, he informed all the family members that the aforesaid shares were of no use for him as he was not interested in running the affairs of any of the companies. The gifted shares and transferred deed were handedover by petitioner No. 1 to his mother- Smiti Golyan in January 2014 which were sent to respondent No. 1 co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with revised Annual Return who had accepted and treated the same as final. A reference has been invited to a large number of emails between petitioner No. 2 and respondent No. 1 which clarified that petitioner No. 2 was fully in control of the management of respondent No. 1 company. The contents of the aforesaid emails are claimed to be self-explanatory which completely destroy the case of the petitioners filed with a mala fide intention. There are various averments made which would be necessary to deal with the issue raised. 20. Under the caption 'preliminary objection', it has been asserted that the petition is not maintainable and that there has been no oppression or mismanagement within the meaning of Sections 397 and 398. There are allegations that the petitioner has not come to the court with clean hands and has suppressed material facts. The allegation of fraud cannot be gone into by this Tribunal as it decides the cases by adopting summary procedure. Therefore, the matter required to be adjudicated by a regular Civil Court. Moreover, the matter is pending before the Joint Commissioner of Police, Economic Offences Wing, Mandir Marg, New Delhi and a no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fair to gift the shares held by him in both the companies, namely Nulon India Ltd. and Nulon Global Limited to his mother-respondent No. 2 in January, 2014 on the upcoming occasion of his parents' silver anniversary celebration in February, 2014. It is reiterated that the shares belonging to petitioner No. 1 in respondent No. 1 company were illegally and fraudulently transferred by the respondents. The petitioner has also categorically denied that the gifted shares along with transferred deeds were handedover by him to his mother in January, 2014, which were transferred in her favour on 14.02.2014. The story of meeting of Board of Directors including respondent Nos. 2 and 3 by videoconferencing on 14.02.2014 where the transfer of shares took place in favour of respondent No. 2 is stated to be false and concocted. The recording of videoconferencing call is compulsory and respondents have been asked through the NCLT to produce evidence of holding the meeting by video conferencing. 24. The averments made in the petition with regard to approval of Annual Accounts for the Financial year 2013-14 of respondent No. 1 company held on 30.09.2014 have been reiterated and it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the preceding paras. 28. A separate reply by respondent No. 4 has also been filed. The principal objection taken by respondent No. 4 is that he is neither a necessary nor a proper party to the proceeding. It has then been submitted that respondent No. 3 was ever involved in illegal activities or ever acted against the interest of majority shareholders. He has also denied that entire shares of petitioner No. 1 were illegally transferred to respondent No. 2. Respondent No. 4 has also submitted audited report of respondent No. 1 for the financial year 2013-14. All other objections raised are identical to the one raised by respondent Nos. 1 to 3 and need not be repeated. 29. We have heard learned Counsel for the parties at length and have perused the paper books with their able assistance. 30. Mr. Virender Ganda, learned Senior Counsel has vehemently argued that petitioner No. 1 has been illegally duped by the acts of the respondents inasmuch as his 4,66,600 shares have been illegally transferred to his mother-respondent No. 2. According to the learned Counsel, petitioner No. 1 came to know in February, 2015 that the original share certif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in accordance with the provisions of Section 68 of the Evidence Act, 1872. To the same effect, reliance has been placed on another judgment of the Hon'ble Supreme Court in the case of B. Venkatamuni v. C.J. Ayodhya Ram Singh [2006] 13 SCC 449. 34. Learned Counsel has then argued that once the respondents have not been able to prove the documents, then it must be regarded as a play of fraud. He has drawn our attention to the so-called gift deed which by no stretch of imagination could be regarded as a gift. In that regard, reliance has been placed on the Judgment of the Supreme Court in the case of S.P. Chengalvaraya Naidu v. Jagannath [1994] 1 SCC 1. Replying to the preliminary objection raised, learned Counsel has submitted that in case it is found that there is illegality in transfer of shares then it prima facie amounts to oppression. In that regard, he has placed reliance on the observations made in para 51 of the judgment in the case of Needle Industries (India) Ltd. v. Needle Industries Newey (India) Holding Ltd. [1981] 3 SCC 333, and has argued that this Tribunal must return the finding that there is oppression. 35. Mr. U.K Chaudhary lear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ransfer of shares belonging to petitioner No. 1 to his mother-respondent No. 2 Mrs. Smiti Golyan is required to be examined. Before embarking upon discussion on the aforesaid subject it would be necessary to clear the mist created by host of preliminary objections raised by the respondent. The first objection raised by the respondent is that the petition is not maintainable as there are no allegations of oppression and mismanagement. It is well settled that an act of transferring the share illegally would constitute an act of oppression. In the case of Needle Industries (India) Ltd. (supra), the question of transfer of share came up for consideration of Hon'ble Supreme Court and it proceeded to decide the issue. Moreover, in the present case serious allegations of fraud with regard to the transfer of shares have been levelled which are required to be gone into. Therefore, this objection does not commend itself to us and is hereby rejected. The other objection raised is that the transaction concerning transfer of shares rest between petitioner No. 1 and respondent No. 2 his mother and therefore, by virtue of law laid down by Hon'ble Supreme Court in the case of Chatterjee Pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 23.01.2014 and it was to be presented to her and handedover to as gift by the donor on the occasion of his mother's silver jubilee wedding anniversary on 15.02.2014. As per the version disclosed by the respondent, meeting of the Board of Directors was held on 14.02.2014 by using the videoconferencing as some of the directors were not present at Koh Samui Thailand where the marriage anniversary of respondent No. 2 and 3 was celebrated. A meeting of the Board of Directors is stated to have been held on 14.02.2014 and notice of the meeting is stated to have been sent to all concerned and the meeting was held through videoconference with respondent Nos. 2 and 3 who were in Kou Samui Thailand. 41. A general Circular No. 28/2011 has been issued by the Ministry of Corporate Affairs on 20.05.2011 encouraging the use of information technology. In paras 4, 5 and 6, the following provision has been made:- 4. In the light of the above provisions and circumstances, it is hereby clarified that directors of a company may participate in a meeting of Board/Committee of directors under the provisions of Companies Act, 1956 through electronic mode. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Name ii. Location iii. that he can completely and clearly see and communicate with each of other participants. iv. and will ensure that no one other than the concerned director or authorised participant is attending the meeting through electronic mode. Thereafter, the Chairman/Secretary shall confirm the participation of the directors in the meeting who are not physically present. After the roll call, the Chairman or Secretary may certify the existence of a quorum. It is clarified that a director participating in a meeting through use of videoconference shall be counted for the purpose of quorum. A roll call should also be made at the conclusion of the meeting or at recommencement of the meeting after every break to ensure presence of quorum throughout the meeting. 42. A perusal of the aforesaid notification makes it clear that their record of meeting shall be maintained by holding roll call. In the record the name of the participants, location, certificate that he can completely and clearly see and communicate with the other participants is required to be maintained. Despite va ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and executed by or on behalf of the transferor and by or on behalf of the transferee and specifying the name, address and occupation, if any, of the transferee, has been delivered to the company along with the certificate relating to the shares or debentures, or if no such certificate is in existence, along with the letter of allotment of the shares or debentures: Provided that where, on an application in writing made to the company by the transferee and bearing the stamp required for an instrument of transfer, it is proved to the satisfaction of the Board of directors that the instrument of transfer signed by or on behalf of the transferor and by or on behalf of the transferee has been lost, the company may register the transfer on such terms as to indemnity as the Board may think fit: Provided further that nothing in this section shall prejudice any power of the company to register as shareholder or debenture holder any person to whom the right to any shares in, or debentures of, the company has been transmitted by operation of law. (1A) every instrument of transfer of shares shall be in such form as maybe prescribed, and- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssion 'shall not register' occurring in section 108(1) pointed out that where the language used is in the negative form then it emphasizes the insistence of compliance with the provisions concerned. It is intended as a legislative device to make a statutory provision imperative. 48. The expression 'proper instrument' means an instrument which complies with all the formalities required by the Act including the stamp duty required to be affixed. A transfer deed is required to be executed by the transferor as well by the transferee. The deed executed by the transferor alone does not pass the title in the shares to the transferee. 49. Section 108(1) further postulates that transfer form as prescribed must be signed by the transferor or on his behalf as well as by the transferee or on his behalf. There is a statutory form No.7B which is prescribed form required to be filed by transferor and transferee. The signature of both transferor and transferee are required to be attested by witnesses. The aforesaid share transfer form as prescribed by Section 108(1 A) is set out below:- 50. In ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esented before the Registrar of Companies. It is the duty of the Registrar to stamp said form or otherwise make endorsement on the form with the date on which it was presented. 52. On the proforma of transfer deed signatures of both transferee and transferor are required to be appended. The further requirement in the form 7B is that the signature of transferee and transferor are also required to be attested by the witnesses. If share transfer deed was executed the names of the witnesses could be easily revealed. The disclosure of the names of attesting witnesses is extremely significant because those witnesses could have on solemn affirmation authenticated the factum of execution of the transfer deed. 53. It is extremely significant to remember the first principle without any graphic details. In order to prove loss of a document it must first be established that such a document existed. The petitioners' case is that no transfer deed was ever executed which means such a document has not ever come into existence. The First and foremost duty of respondent No.2 was to meet the assertion made by the petitioner and put forward the affidavit of attesting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rsement in favour of respondent No. 2 on 14.02.2014 has not been endorsed by the Registrar of Company. It is further doubtful that after the silver jubilee marriage anniversary was celebrated at Kou Samui, Thailand then how on 14.02.2014, these shares certificates duly signed by Mrs. Smiti Golyan were available in Delhi with respondent No. 1 company. 56. From the aforesaid discussion it is clear that no transfer of shares belonging to petitioner No. 1 has ever taken place in accordance with the provisions of Section 108 (1) (a) of Companies Act. It has also been established that so-called gift deed and the writings prepared on 23.01.2014 with a manipulated document cannot be regarded as an expression of free Will to gift 466600 shares to respondent No. 1 company reflected through 19 share certificates and the same is vitiated in the eyes of law. Accordingly, we allow the petition and issue the following directions :- (i) The member register of respondent No. 1 company shall be rectified by restoring the name of petitioner No. 1 as the owner of 466600 shares. It should be shown in the register of the company that he is a member of company and own 46660 ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
