TMI Blog2022 (5) TMI 718X X X X Extracts X X X X X X X X Extracts X X X X ..... t No. 2 were given to the Petitioner in order to facilitate the smooth functioning of the Company cannot be dismissed. Jurisdiction of this Tribunal to decide the issues of fraud - HELD THAT:- Admittedly in this case, the Petitioner does not have Share Certificates. As to why he did not insist for issuance of share certificates is not explained. However, from the admission made by the Respondents, it is clear that Rs. 10,00,000/- was given by the Petitioner. But the contention is that the Petitioner promised to give the remaining amount of Rs. 10,00,000/- later and did not want to take their share certificate till then. All these are highly disputed questions of fact, which cannot be adjudicated by this Tribunal. Hence, this point is answered holding that the Petitioner, as admitted by Respondents No. 1 to 3 has given Rs. 10,00,000/- which can be recovered by filing an appropriate application before appropriate forum. Admittedly, the Share Certificates are in possession of Respondent No. 4. Hence, unless evidence is taken with regard to the contentions raised by either side, no finding can be given with regard to the rights of the Petitioner. As regards the Share Transf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... holder of Respondent No. 1 Company and holding 2,40,000 shares i.e., 40% of the issued, subscribed and paid-up capital of Respondent No. 1 Company. b) After disputes arose between the Petitioner and Respondent Nos. 2 to 4, regarding unauthorized removal of the petitioner from his directorship. The Petitioner lodged detailed complaints with Respondent No. 5, Police, Companies Bankers and Vizag Steel Plant, the sole customer of the Company and others. c) Respondent No. 5 conducted an enquiry and endorsed the Company as Management Dispute Company . Respondent Nos. 2 to 4 thereafter filed some documents like Annual Returns and Balance Sheets for the financial years 2016-17 and filed copies of the same in their reply to the WVMP filed by the Petitioner before the High Court, as per which Respondent Nos. 2 to 4 have illegally and without any process of law and procedure extinguished the 40% shareholding of the Petitioner. The petitioner did not sign or execute any transfer deed and did not receive any consideration from any person. The annual return for the Financial Year 2017 filed under the signature of Respondent No. 2 does not even disclose as to how the shareholding of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tioner as Director to the Bank. The Petitioner has been constantly enquiring about the transfer of shares of the existing shareholders to him and his people and his appointment as a Managing Director of the Company, but Respondent No. 2 has been postponing the same. When the Petitioner sensed foul play, Respondent No. 2 filed the appointment of the Petitioner with Respondent No. 5 in DIR-12 only in the year 2014 stating that the Petitioner was appointed as Director with effect from 05.06.2014. The Petitioner was helpless as the entire board and shareholding was held by Respondent No. 2 and he continued to act as a joint signatory to the Bank account. Respondent No. 2 admitted to have received Rs. 15,43,000/- from the Petitioner and appropriated Rs. 12,00,000/- consideration for 2,40,000 shares and balance as advance for remaining 3,60,000 shares. Respondent No. 2 gave a letter dated 10.06.2012 to that effect. He also stated in the said letter that he has withdrawn the balance consideration of Rs. 12,57,000/- for 60% of shares from the Company's account and agreed to first transfer 40% shares to the Petitioner in two days and transfer the remaining 60% shares after finalization ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stake in Respondent No. 1 Company. Believing him, Respondent No. 2 and Respondent No. 3 agreed to sell 40% stake to the Petitioner. Respondents wanted to appoint Petitioner as Director of Respondent No. 1 Company. Since he did not give consent he was appointed as General Manager to take care of the day to day operations. The Petitioner paid an amount of Rs. 10,00,000/- being part consideration for 40% shares which he agreed to purchase at Rs. 20,00,000/-. It was agreed that the balance amount will be paid before June, 2014. During 2011, Respondents handed over the blank transfer deeds as an assurance for transferring the 40% shares and further submitted that Respondents can handover the original share certificates upon the payment of balance consideration. Respondents, who blindly believed the Petitioner, have handed over the blank transfer deeds as early as 2011, though they did not hand over the original share certificates. In the letter issued by the Petitioner on 13.05.2014, it is clearly stated that the shares are being transferred on 13.05.2014 as per his request, hence he will pay balance the amount of Rs. 10,00,000/- before June, 2014. Till date the Petitioner did not pay t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shareholder. In support of her claim, she submitted original share certificates. On receipt of the request from Respondent No. 3, a rectified annual return was filed. Later Respondent No. 4 approached Respondent No. 2 with a request to be a part of Respondent No. 1 Company. Respondent Nos. 2 3 entered into a Memorandum of Understanding (MoU) with Respondent No. 4 on 29.07.2016 and handed over the Management of Respondent No. 1 Company. Respondent Nos. 2 3 also transferred 3,06,000 equity shares to Respondent No. 4 by executing proper deeds. The Petitioner, having requested the Respondents not to take any action, started filing frivolous cases. He filed a fraudulent police complaint. On the above grounds Respondents seeks to dismiss the Petition. 4. Respondent No. 3 filed a memo adopting the counter of Respondent Nos. 1 2. 5. Respondent No. 4 filed separate counter, supporting the contentions made by Respondent Nos. 1 2 and further stating that he is a bonafide purchaser of the equity shares and is in possession of valid share certificates and transfer forms. 6. A rejoinder was filed for the counter filed by Respondent Nos. 1 and 2 which is nothing but reiteration o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rds consideration for 2,40,000 shares and a balance of Rs. 3,43,000/- as advance for the remaining 3,60,000 shares and received balance of Rs. 12,57,000/- from Respondent No. 1 Company. Later Respondent No. 2, in conspiracy with Respondent No. 4, removed the Petitioner as Director and appointed Respondent No. 4 as Director with effect from 19.09.2016. The Petitioner filed complaints with concerned departments and obtained orders. A criminal complaint is also filed. The version of the Respondents is that the letter dated 10.06.2014 is fabricated. As the Petitioner was managing the affairs of Respondent No. 1 Company to facilitate the same Respondent No. 2 singed on blank letterheads for using them for the operations of Respondent No. 1 Company. But it can be understood from the Counter of Respondent No. 1 to 3 that Respondent No. 1 Company incurred losses and that in the year 2011, the Petitioner approached the Respondents. The version of the Petitioner is that Respondent No. 2 approached him, which seems to be more probable in the light of the admission that the Company was in losses by the time the Petitioner was inducted into the Company. Hence, the version of the Petiti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was a dispute before the Civil Court between the parties therein. It was held by the Supreme Court that the question of right, title and interest is essentially adjudication of civil rights between the parties and it would not be appropriate to entertain parallel proceedings. The Court refrained from deciding the issues therein, considering that it is a civil dispute and cannot be decided in these proceedings, since, the decision would jeopardize the parties' rights and interest in the civil suit. However it held that with regard to the dispute as to right, title and interest in the securities, the finding of the Civil Court would be final. A judgment of the Supreme Court in between Tarsen Kansil vs. Dev Spinners Ltd., dealt with a dispute, wherein the allegation is that shares have been fraudulently and collusively transferred in the name of Respondent No. 7 8 and their names were recorded behind the back of the Petitioner, without his knowledge. The Petitioner's claim therein is that the original share certificates are in his possession and could not have been delivered to the Respondent Company along with the transfer deeds, whereas the case of the Respondents was t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by filing an appropriate application before appropriate forum. Admittedly, the Share Certificates are in possession of Respondent No. 4. Hence, unless evidence is taken with regard to the contentions raised by either side, no finding can be given with regard to the rights of the Petitioner. In the judgment of the Supreme Court in M/s. Ammonia Supplies Corporation (P) Ltd., Vs. M/s. Modern Plastic Containers Pvt. Ltd. Others, it was held that any question raised within the peripheral field of rectification, it is the Court under Section 155 alone which would have exclusive jurisdiction; however, the question raised does not rest here; in case any claim is based on some seriously disputed civil rights or title, etc., which may be the foundation to claim a right to be a member and if the Court feels such claim does not constitute to be a rectification but instead seeking adjudication of basic pillar some such facts falling outside the rectification, its discretion to send a party to seek his relief before the civil court first for the adjudication of such facts, it cannot be said such right of the court to have been taken away merely on account of the deletion of the aforesai ..... X X X X Extracts X X X X X X X X Extracts X X X X
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