2015 (11) TMI 1702 - Board - Companies Law

Petitioner's Share Transfer Renders Petition Dismissed Under Companies Act

Ayoli Abdulla Versus MS Meezan Realtors Pvt Ltd, Mr Abdusalam Kurikkal Man. ieri Puthusseri, Mt' Mohamed Rutty Chelat, Mr. Pocker Ullatil.

Ayoli Abdulla Versus MS Meezan Realtors Pvt Ltd, Mr Abdusalam Kurikkal Man. ieri Puthusseri, Mt' Mohamed Rutty Chelat, Mr. Pocker Ullatil. - TMI Issues Involved:1. Allegations of oppression and mismanagement.2. Validity of share transfer and petitioner's locus standi.3. Conduct and legality of board meetings and resolutions.4. Petitioner's claim of coercion in signing share transfer forms.5. Compliance with Section 399 of the Companies Act, 1956.Detailed Analysis:1. Allegations of Oppression and Mismanagement:The petitioner alleged acts of oppression and mismanagement in the affairs of the company, specifically targeting the 2nd to 4th respondents. The petitioner claimed unauthorized and incorrect filings, fraudulent transfer of shares, and improper appointment of directors without his knowledge or consent. The petitioner contended that the actions of the respondents were aimed at sidelining him and usurping control of the company, including its valuable property.2. Validity of Share Transfer and Petitioner's Locus Standi:The respondents argued that the petitioner had transferred his entire shareholding (1000 shares) to the 4th respondent on 27.04.2011, thereby ceasing to be a member of the company. Consequently, the petitioner lacked the requisite qualification under Section 399 of the Companies Act, 1956, to file a petition for relief under Sections 397 or 398. The board of directors had duly noted and approved the share transfer, and the process complied with Section 108 of the Companies Act. The petitioner did not deny the transfer or his signatures on the transfer forms, although he claimed coercion.3. Conduct and Legality of Board Meetings and Resolutions:The petitioner challenged the legality of board meetings held on 25.09.2011 and 15.11.2011, arguing that they were not duly convened and lacked proper notice and quorum. The respondents countered that all meetings were conducted with proper quorum and in compliance with the company's Articles of Association. The petitioner's exclusion from the list of shareholders in the annual return for the financial year ended 31.03.2011 was cited as evidence of the completed share transfer.4. Petitioner's Claim of Coercion in Signing Share Transfer Forms:The petitioner alleged that he was coerced by the 4th respondent into signing the share transfer forms under threat to his life. However, there was no record of any legal action taken by the petitioner to substantiate this claim. The respondents argued that the petitioner's allegations were an afterthought and lacked credibility, especially given the absence of a police complaint or other immediate action.5. Compliance with Section 399 of the Companies Act, 1956:The core issue was whether the petitioner met the qualifications under Section 399 to file the petition. The court found that the petitioner had indeed transferred his shares and was no longer a shareholder. As per Section 399, only members holding a specified percentage of the share capital or a minimum number of members can file a petition under Sections 397 or 398. Since the petitioner no longer met these criteria, he lacked the locus standi to maintain the petition.Judgment:The court concluded that the petitioner ceased to be a shareholder of the company and, therefore, had no locus standi to file the petition. The petition was dismissed as not maintainable. The interim orders, if any, were vacated, and pending applications were disposed of. No orders as to costs were made.