TMI Blog1998 (4) TMI 571X X X X Extracts X X X X X X X X Extracts X X X X ..... he company continuously for five years since incorporation and was working director for further one year after which he was removed from the office of the director, through clever manipulation by the respondents. The complaint of the petitioner is that through a board meeting in 1980, respondents Nos. 2 and 3 resolved to issue 200 duplicate shares against his share certificate, to publish in the newspapers about the issue of the duplicate shares and to state that the company will not recognise any transfer in respect of the original 200 shares owned by the petitioner. The duplicate shares were purported to be issued pursuant to the provisions of Articles 42 and 35 of the articles of association of the company. According to the petitioner, even as per the articles, a valid sale notice in writing is necessary in order to transfer the shares or to issue duplicate shares. There is no scope for omitting or dropping the names of the petitioner from the register of members without his consent. The company cannot override the articles and defraud its members or shareholders. It is further stated that according to Section 108 of the Act, it is mandatory to fulfil the conditions prescribed t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d shall be deemed to have served on the company with the sale notice under Article 35. Since the petitioner ceased to be a director with effect from June 28, 1978, he was called upon to deliver the share certificate relating to the 200 shares held by him. However, in spite of repeated reminders, the same were not surrendered. Consequently, at the board meeting held on May 5, 6, 1980, it was decided to issue duplicate share certificates and to publish a notice in the newspapers. In accordance with the procedure laid down, the auditors valued the shares and they were transferred and the payment as per the valuation was made to the petitioner by bank draft. Since the transfer was made in accordance with the restrictions contained in the articles and in view of the express provisions contained in Section 111(13) of the Act, which permits such transfer irrespective of Section 108 of the Act, the present petition is not maintainable. (ii) Another preliminary objection is that the petitioner has not come with clean hands in so far as the petitioner has not disclosed the various litigations instituted by the petitioner himself in respect of the same subject matter : (a) A criminal ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ransfer of shares being a private company under Section 3(1)(iii)(a) of the Act. The reply, therefore, prayed that in view of the above, the petition should be dismissed with costs. 5. In rejoinder the petitioner stated that the various cases filed by him were either dismissed or not pursued for want of local jurisdiction and none of the cases were tried on the merits, however no explanation was given for the omission to mention in the petition or for the delay in filing the petition. 6. The petition was heard on March 16, 1998, when Shri U. P. Mathur, advocate for the respondents, pressed his preliminary objections. Mathur stated that even on the merits the petitioner has no case in so far as what the company has done was only to enforce the restrictions on transfer of shares since it is a private company. He further emphasised that violations and non-compliance of sections 84 and 108 have no validity in view of the Section 111(13) of the Act, which specifically exempts private companies in this regard while enforcing the restrictions contained in the articles of the association of the company. He also drew our attention to the provisions contained in Article 37 of the artic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taking up the merits of the case, on a careful consideration of the preliminary objections it is found that there are two specific objections raised by Shri Mathur on behalf of the respondent namely : (a) that the petitioner has been pursuing various legal proceedings for a number of years and has failed to refer to any of the proceedings in the petition ; (b) that there is an inordinate delay of about twenty years without any explanation for such a delay. 9. Against these objections, the petitioner could not substantiate before us as to which of the cases were dismissed for lack of jurisdiction and which of the cases were dismissed on the merits. It is further stated in the rejoinder at page 5 that none of the cases were tried on the merits. However, it is the burden of the petitioner to establish that in each and every case, the merits were not gone through. At least, we have come across one decision of the City Civil Court at Calcutta filed by the respondent to state that the title suit was dismissed' for default. The petitioner explains that this default is on account of his presumption that the City Civil Court has no jurisdiction. This explanation is not satisfac ..... X X X X Extracts X X X X X X X X Extracts X X X X
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