9911796707
TMI Blog2007 (11) TMI 691X X X X Extracts X X X X X X X X Extracts X X X X ..... ,000 (Rs. One crore only) divided into 10,00,000 equity shares of ₹ 10/- each of which ordinary shares of ₹ 10/- each were issued as fully paid up. The main objects of the company are (a) to carry on all or any of the business of processors, growers, exporters, buyers, sellers, agents, merchants and dealers in all kind of fresh and processed mushrooms, canned mushrooms, frozen mushrooms, dry freezed mushrooms, and vegetable, fruits, vegetables, flowers, herbs and forest products and their stems, roots, leaves and seed and their various products and by-products like squashes, concentrates, juices, ready beverages, etc. The company was jointly promoted by R-2 & 3 with Mitruka family having representation of two directors each on the Board. The company approached Banks and Financial Institutions for credit facilities which could not be sanctioned due to the lack of adequate financial and technical credentials of Mitruka and family. During December 2000, Mitruka and family accordingly offered to sell their shareholding to the petitioner, R-4 and 5. The petitioner was appointed as Consultant of the company on April 20,2000. On December 11,2000 he became a shareholder and dir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith the Petitioner; the transfer of shareholding of the Petitioner in the name of Respondent No. 7 is malafide, unfair and illegal the Petitioner has not received full consideration; the Petitioner's unsecured loan has not been paid; he has not received any notice of Board meeting. General Meeting. Hence his prayer for restoring him as Director with retrospective effect and declare the transfer of his 2.5 Lac shares as illegal and bad in law. Investigation into the affairs of the Respondent Company has also been sought. 5. It was contended that the petitioner has the requisite qualification under Section 399 of the Act. The Petitioner is admittedly holding 25% of the Equity Share Capital before the impugned transfer of Shares. Reliance was placed upon the various judgments/decisions of the Company Law Board, being consistently followed over a period, including "Sangramsinh P Gaekwad and Ors. v. Shanadevi P. Gaekwad and Ors. wherein it was held that "Moreover, in the given case the court despite holding that no case of oppression has been made out may grant such relief so as to do substantial justice between the parties (para. 181 and 199)"; 1999 vol. 96 company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C. Tandon had already ceased to be Director on 26th September, 2003. The date of cessation as Director has been intentionally chosen as 29 September, 2003, so as to take the said information in the Annual Return of the following year and consequently to continue to hide the information from the Petitioner/Public for another one year. It was argued that the removal/cessation of the Petitioner as Director is, therefore, liable to be set-aside. 9. Further, it was argued that the Respondents have illegally/fraudulently adjusted Unsecured loan of ₹ 14,77,124/- of the Petitioner in the books of account for the year 2003-04 of Respondents No. 1 Company on the basis of a so called 'Written Settlement Agreement' which has never been produced by the Respondents despite repeated opportunity given to them. The said unsecured loan, it was argued, has become payable to the Petitioner forthwith. 10. My attention was drawn to objectionable conduct of Respondents by pointing out to false affidavit by the Respondents. It was contended that despite specific statement made by the Respondents on oath, the original share certificate and the written settlement agreement, claimed to have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d he does not possess any shareholding of the company. It was argued that the Petitioner had concealed the undertaking, relieving letter, release of his personal bank guarantee and collateral security (mortgaged property) by the bank, upon his resignation as Director of the Company. The company had issued letter to the bank to release the security of the Petitioner. It was pointed out that the Petitioner's transaction with Respondent No. 7 was totally independent and if he has any claim against the Respondent No. 7, then he can proceed independently against him. 12. Further, the counsel for the respondents argued that the Petition raises disputed questions of fact, which can only be gone into by the Civil Court. Moreover, it was pointed out that the petition is barred by limitation and is bad for delay, latches and acquiescence, having been filed three years and three months after the resignation and transfer of shareholding. My attention was drawn to the fact that after resignation of the Petitioner, the company has become a profit making organization. It is paying its loans and is complying with other statutory requirements well in time. The business/profits are growing ever ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts, without having filed the same at the relevant time. My attention was drawn to Rule 6 of the Companies (Court) Rules and Order 7 Rule 14 of the CPC. It was argued that the petitioner cannot take the Respondents by surprise by just producing some documents at the stage of final arguments, without actually filing them and giving a chance to the other party to rebut and controvert the said documents. The fact that the Petitioner at the relevant time did not file the documents and, in fact, did not file the documents right till the end, as by his own conduct, create suspicious circumstances about the genuineness, authenticity and reliability of the alleged share certificates. It was contended that it is crystal clear that the alleged share certificates on the face of it were forged and fabricated, otherwise, the Petitioner would have filed the same on the records of the present case. The Petitioner did not file the said documents on the record of this Hon'ble Board, as he knew that the said documents are forged and fabricated and he did not want to be foisted with a criminal case. 14. Considering the pleadings and the documents annexed therewith as well as the arguments of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... signed and executed the share transfer deeds, resignation of directors and other related documents and had handed over the same to each other only to reinforce the already existing mutual trust. Petitioner's shareholding was to be transferred to R-7. As per the representations of the respondents the petitioner had agreed to sell his shareholding for a consideration of ₹ 50 lacs as per their representation he had signed the share transfer deeds in respect of his shareholding. It was vehemently argued that the original share certificates are still in the possession of the petitioner, the Respondents had not complied with the provisions of Section 108 of the Act read with Article 50 of the Articles of Association of the company to give effect to the transfer of the shares and hence the purported transfer of shares allegedly effected by the respondents was void ab initio, it was done illegally, fraudulently with malafide in collusion and conspiracy with each other and with a view to defraud the petitioner. The petitioner also produced the original share certificates for my perusal and for inspection by the respondents. It was reiterated that despite several opportunities giv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f action the petition cannot be dismissed at the threshold. As regards the respondents' next preliminary objection that the petition has been filed beyond the limitation period, having been filed three years and three months after the resignation and transfer of shareholding and it is bad for delay, latches and acquiescence, considering the argument of the petitioner in this behalf alleging illegal transfer of his shareholding the respondents' preliminary objection is not tenable because illegal transfer of the shareholding of the petitioner has permanent effect, it is continuous oppression. Hence, the argument regarding delay in filing this petition becomes irrelevant. The respondents' next preliminary objection is regarding the conduct of the petitioner. My attention was drawn to the fact that the petitioner had concealed the undertaking, relieving letter, release of his personal bank guarantee and collateral security by the bank upon his resignation as director of the company. The petitioner has also pointed out towards the unclean hands of the respondents stating that they had filed a false affidavit and that despite specific statement made by the respondents on oat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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