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TMI Blog2023 (7) TMI 445X X X X Extracts X X X X X X X X Extracts X X X X ..... dants nos. 1 to 8, their agents and employees from representing themselves and/or holding themselves out to be shareholders of the plaintiff's Company or to act as their authorised representatives; for mandatory injunction for directing the defendants to handover the Letter Heads and other documents or instruments, stamps and seals bearing the name of plaintiff Company which have been created by them and for directing the defendant nos. 9 and 10 to remove their names from Form 32, Form 18, Form 2 and Form 5 and to take action against defendants nos. 1 to 8. The mandatory injunction is also sought against the defendant nos. 1 to 8 to disclose all the transactions, entered by them, in the name of plaintiff's Company, details of all bank accounts opened by them in the name of the plaintiff company and to restrain them from appropriating or dealing with the assets of the company and to award damages. 3. The facts in brief are that the plaintiff, a Private Limited Company, incorporated in the year 1959 has the authorised capital of Rs. 25,00,000/- divided into 25,000 equity shares of Rs. 100/- each. Its paid-up capital is Rs. 24,92,000/- divided into 24,920 equity shares of Rs. 100/-. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in its name by the plaintiff (which was impleaded as respondent no. 1 in the Company petition). On 10.12.2004, the Company Law Board passed an Order directing the defendants to file affidavit of proof of existence of Society and its members as on date with addresses etc. Defendant no. 4 (Mr. Ajay Yadav) filed a Letter dated 26.05.2006 on a fabricated Letterhead of the Plaintiff Company and signed by him as Director of the Plaintiff Company showing the address of the Company as A/3, Indian Express Apartment, Mayur Kunj, New Delhi-96. The plaintiff never had its office at this address and the phone numbers given in the Letterhead were also wrong. It is further claimed that Mr. Ajay Yadav has never been a shareholder or a Director or an authorised representative of the plaintiff Company. Thereafter, the advocates for defendant no. 7 were permitted to withdraw the Company Petition and the same was dismissed. It is claimed that a total fraud was perpetrated by defendant nos. 1 to 8 and in particular by defendant nos. 2 and 4 before Company Law Board. A fabricated letter on behalf of the defendant no. 4 was presented before the Company Law Board in an attempt to obstruct and prevent C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... total consideration of Rs. 8000/- were allotted nor was anybody was authorised to file the Form vide Resolution dated 18.03.2006. Form no. 2 was signed by Ms. Kusum Sehgal; Form no. 5 was digitally signed by Pawan Kumar Sharma and Form 18 was signed by Mr. Nitin Madan, who are total strangers to the Plaintiff Company. The plaintiffs immediately addressed a Letter dated 24.04.2006 to defendant no. 9 and the Plaintiff's representatives personally visited defendant no. 9 on number of occasions and provided the detailed information about the Plaintiff Company's Shareholders and Directorship. The plaintiff then received two letters from the office of defendant no. 10 dated 16.06.2006 and 22.06.2006. No proper action has been taken by defendant nos. 9 and 10 over the past 15 years. 13. It is claimed that defendant nos. 2 to 8 have been creating confusion, falsifying records with respect to the affairs of the Plaintiff Company with the sole purpose and intent to defraud and cheat the public at large. No action is being taken by defendant nos. 9 and 10. By illegally holding themselves out as Directors of the Plaintiff Company, the defendants nos. 2 to 8 have sought to put to sale various ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng himself as office bearer of defendant no. 1 and in an endeavour to hijack defendant no. 1, Society had withdrawn the petition before the Company Law Board in collusion with one, Ajay Yadav but the petition was subsequently restored. It is further stated that defendant nos. 3,4,5 and 6 were never the members of defendant no. 1, Society and defendant no. 2 was the member of the defendant No. 1 Society up till 10.11.2006 and was removed from the Society thereafter for his activities against the defendant no. 1 Society. It is submitted that defendant no. 1 is not part of any illegal activity and the suit of the plaintiff is liable to be dismissed. 16. The defendant nos. 4, 5 and 6 in their amended written statement claimed that according to Form 32 and Letter dated 26.06.2006, it is established conclusively that the Directors of the Company are (i) Mr. Ajay Yadav (ii) Mr. Arjun Chowdhry (iii) Mr. Surender Pal (iv) Mr. Abdul Haq Farhan. The allegations made of fraudulent, fabrication are defamatory and the defendants reserve their right to take appropriate legal action. Furthermore, the allegations made in the suit are covered under Section 397 and 398 of the Companies Act, 1956 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8. Defendant nos. 9 and 10 have also filed a written statement taking a preliminary objection that they have been discharging their statutory functions and are immune from any action in terms of Section 235 A of the Companies Act, 1956 and there is no cause of action disclosed against them and all the averments made in the petition are denied. 19. Defendant nos. 1, 2, 3, 5 and 6 have filed the Application under Order XII Rule 6 CPC for dismissal of the suit. It is stated in the application that this Court vide Order dated 20.09.2007 observed as under: "There are number of other miscellaneous applications which are pending on record and part arguments on those applications have been heard today. During hearing on those applications it transpired that the main dispute between the parties is regarding 500 shares held by defendant no. 1 which according to defendant no. 1 were fraudulently got transferred in the names of other persons. The case of the plaintiffs is that the defendant no. 1 had transferred its shareholdings of 500 shares of Rs. 100 each by 1989 whereas the case of defendants no. 1 to 6 and 8 is that they never transferred their shareholding in favour of any person and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated 18.12.2007 that 240 shares are not available with them constitutes an admission in terms of Section 58 of the Indian Evidence Act, 1872. 22. Thereafter on 07.01.2008, plaintiff placed on record the original share Transfer Deed in respect of 260 shares. It is claimed that the only mode for transfer of the shares of a Private Limited Company is through execution of share Transfer Deeds by the transferor in favour of the transferee in terms of Section 108 of the Companies Act, 1956. It is claimed that since plaintiff has not been able to produce the original share Transfer Deeds in respect of 240 shares, no other evidence is required to be led in respect of these 240 shares in terms of Section 91 of the Indian Evidence Act, 1872. 23. Moreover, the plaintiff has placed on record one document dated 28.02.1968 purporting to be share Transfer Deed for transfer of 150 shares from defendant no. 1, Society to Chowdhary Braham Prakash. This document is nothing but a sheet of typewritten paper and does not satisfy the requirements of Section 108 (1-A) of the Indian Companies Act, 1956 which requires the instrument of transfer to be in the prescribed Form 7B. Moreover, before it is signe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity to represent defendant no. 1. Moreover, FIR No. 476/2006 has been registered which reflects that the documents on the basis of which defendant no. 2 is claiming to be the President of defendant no. 1, Society and has authority to represent the defendant no. 1 are forged and fabricated, in respect of which a specific issue has already been framed. Furthermore, there is no admission whatsoever in respect of 390 shares as alleged. All the 500 shares of defendant no. 1 stand transferred by defendant no. 1 Society itself from time to time between the year 1968 to 1989 as has been explained in the plaint. There have been contentious issues which have been raised and there are no unequivocal or clear admissions made by the plaintiff and no order of dismissal can be made under Order XII Rule 6 of CPC. 28. It is further explained that as per the terms of Companies (Preservation and Disposal of Records) Rules, 1966 read with Notification dated 09.04.2003, in Schedule II there are 62 items mentioned with a column for the duration for which the record should be preserved. Point No. 62 of the said Notification states that records/ documents that are not mentioned in the 61 items of Schedul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the plaintiff which have been found to be fraud and fabricated in respect of which FIR No. 158/2007 has already been registered. The plaintiff has not been able to produce any documents to show that defendant no. 1, who was admittedly holding 500 shares, has transferred them between 1968 to 1989. The suit of the plaintiff is therefore liable to be dismissed. 31. Submissions heard. 32. The plaintiff has filed the present suit for permanent/mandatory injunction for restraining defendant nos. 1 to 8, their agents, their representatives to claim themselves as shareholders of the Plaintiff Company and to act on its behalf. 33. It is an admitted fact that defendant no. 1, a registered Society which was founded by late Sh. Chowdhry Brahm Prakash and others became the shareholder of the Plaintiff Company on 20.05.1962 and they acquired 500 shares having distinctive numbers from 61 to 560, covered by a Single Share Certificate. There are specific averments made by the plaintiff in its plaint that these 500 shares were transferred by the defendant no. 1 Society from time to time between 1968 and 1986 and different share certificates were accordingly issued. The case of the plaintiff is t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... intiff Company. 37. The defendant can seek rejection of the suit only if there are plain, unequivocal and unambiguous admissions made by the plaintiff. It was held by the Hon'ble Supreme Court in Himani Alloys Ltd. V. Tata Steel Ltd. (2011) 7 SCR 60 that Order XII Rule 6 is an enabling provision and the court has to exercise its judicial discretion after examination of facts and circumstances, keeping in mind that a judgment on admission is a judgment without trial which permanently denies any remedy to the defendant, by way of an appeal on merits. Therefore, unless the admission is clear, unambiguous and unconditional, the discretion should not be exercised to deny the valuable right of a defendant to contest. It is only when the admission is clear that it may be acted upon. Similar are the observations made in S.M. Asif Vs. Virender Kumar Bajaj (2015) 9 SCC 287, Hari Steel and General Industries Limited and Another Vs. Daljit Singh and Others (2019) 20 SCC 425, Jeevan Diesels and Electricals Limited Vs. Jasbir Singh Chadha (HUF) and Another (2010) 6 SCC 601. 38. The facts of the present case do not reflect that the suit is liable to be dismissed simply on account of non-product ..... X X X X Extracts X X X X X X X X Extracts X X X X
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