Court validates director resignation, upholds share issuance, deems AGM illegal, orders re-holding. Shares transfer addressed. Exit option offered.

The court accepted the resignation of Petitioner No. 1 from directorship as genuine, upheld the issuance of 26,500 equity shares, and declared the Annual General Meeting (AGM) held without proper notice illegal. The court directed a re-holding of the AGM with proper notice. Additionally, the court addressed the transfer of shares purchased by the petitioners, directing them to submit necessary documents for registration. Petitioners were given the option to exit the company by selling their shares at a fair price determined by a valuer based on the balance sheet as of 31.3.2002.

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Issues Involved:
1. Resignation of petitioner No. 1 from directorship.
2. Increase in paid-up share capital and issuance of 26,500 equity shares to Mr. Anuj Chandra.
3. Holding of AGM on 30.9.2003 without proper notice to the petitioners.

Issue-wise Detailed Analysis:

1. Resignation of Petitioner No. 1 from Directorship:
The petitioners claimed that petitioner No. 1 never resigned from the Board of Directors, and the resignation was falsely reported. The respondents produced both the original and photocopy of the resignation letter dated 1.1.2002, signed by petitioner No. 1. The petitioner did not provide evidence to dispute the authenticity of the signature. The court noted that the resignation was reported to the Registrar of Companies (ROC) on 11.6.2003. As the signatures were not contested and no contrary evidence was presented, the court accepted that petitioner No. 1 had indeed resigned on 1.1.2002.

2. Increase in Paid-up Share Capital and Issuance of 26,500 Equity Shares:
The petitioners argued that the increase in paid-up share capital from Rs. 7,06,000 to Rs. 9,71,000 and the issuance of 26,500 shares to Mr. Anuj Chandra were done without proper approval from the Board of Directors or an Extraordinary General Meeting (EGM). The respondents justified the increase, stating it was necessary due to creditors stopping credit supplies and the need for cash payments. They provided minutes of the Board Meeting held on 20.1.2003, where this decision was taken. The petitioners failed to demonstrate any illegality in the issuance of these shares. Consequently, the court upheld the allotment of 26,500 shares to Mr. Anuj Chandra.

3. Holding of AGM on 30.9.2003 Without Proper Notice:
The petitioners contended that the AGM held on 30.9.2003 was conducted without proper notice, violating guidelines set by the Hon'ble High Court of Delhi. The respondents claimed to have sent notices via UPC, but the court found this method inadequate. According to the guidelines in "Trilokchand Khanna v. Rajkumar Kapur," notices should have been sent through Registered A.D. The court declared the AGM held on 30.9.2003 illegal and directed the respondents to hold the AGM again with proper notice through Registered A.D.

Additional Considerations:
The petitioners' request to transfer 30,000 shares purchased from Bahubali Rubber P. Ltd. and Mr. Ravinder Kumar Agarwal was addressed. The respondents asserted that the petitioners had not filed the necessary documents for the transfer. The court directed the petitioners to submit the requisite documents, and if found in order, the company should register the shares in the petitioners' names.

Conclusion:
The court provided an option for the petitioners to exit the company by selling their shares at a fair price, to be valued by an appointed valuer based on the balance sheet as of 31.3.2002. The petition was disposed of with no orders as to costs.

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