Shareholders' voluntary share transfer renders petition under section 399 not maintainable. The Board found that the petitioners had voluntarily transferred their shares, complying with legal provisions and obtaining approval from the board of ...
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Shareholders' voluntary share transfer renders petition under section 399 not maintainable.
The Board found that the petitioners had voluntarily transferred their shares, complying with legal provisions and obtaining approval from the board of directors. As a result, the petitioners were no longer shareholders, rendering the petition under section 399 of the Act not maintainable. The application by the applicants was allowed, leading to the dismissal of the petition.
Issues involved: Share transfer deeds, maintainability of petition, fraudulent transfer of shares, burden of proof, approval of share transfer by board of directors, compliance with provisions of law, entitlement to file petition under section 399 of the Act.
Share Transfer Deeds: The applicants contended that the petitioners had transferred their shares more than two years back, rendering the petition not maintainable. The petitioners denied making voluntary transfers and accused the applicants of misusing blank transfer deeds to falsely claim ownership. The petitioners argued that they did not receive any consideration for the alleged transfers and disputed the authenticity of the documents presented by the applicants.
Fraudulent Transfer of Shares: Respondents 6 and 7, as promoter-directors, refuted the claim of share transfer and alleged that any documents provided by the applicants could be fabricated. They stated that they were forced to withdraw the petition under the pretext of settlement talks, which never materialized. The respondents maintained that no genuine transfer of shares took place and accused the applicants of fraudulent acts.
Burden of Proof and Compliance: The main issue for consideration was whether the petitioners had indeed transferred their shares. The Board examined the share transfer forms and receipts, concluding that the petitioners had voluntarily transferred their shares based on the documents provided. The Board found that the provisions of law regarding share transfers had been complied with, leading to the petitioners no longer being shareholders of the company.
Approval by Board of Directors: The Board noted that the transfer of shares was approved during a board meeting, where other transfers were also sanctioned. The minutes of the meeting and the register of members supported the approval of share transfers, indicating that the board had authorized the transactions. The Board emphasized that the petitioners had signed the necessary documents for the transfer.
Entitlement to File Petition: Based on the evidence of share transfers and compliance with legal requirements, the Board held that the petitioners were no longer shareholders of the company. As a result, the petition filed under section 399 of the Act was deemed not maintainable, and the application by the applicants was allowed, leading to the dismissal of the petition.
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