Petition Dismissed for Delay & Suppression

The Tribunal dismissed the petition due to the petitioner's inordinate delay, suppression of material facts, and their conduct in filing and withdrawing petitions. Equitable relief was denied as the petitioner did not meet the necessary standards, and each party was directed to bear their own costs.

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Issues Involved:
1. Eligibility of the petitioner under Section 399 of the Companies Act, 1956.
2. Validity of the allotment of 15,000 shares to the first respondent.
3. Allegations of suppression of facts and delay in filing the petition.
4. Allegations of siphoning funds by the first respondent.

Issue-wise Detailed Analysis:

1. Eligibility of the Petitioner Under Section 399 of the Companies Act, 1956:
The petitioner, holding four equity shares, filed the petition under Sections 397 and 398 of the Companies Act, 1956, alleging that the first respondent illegally allotted 15,000 shares to herself, reducing the petitioner’s family shareholding from 59.95% to 37.41%. The respondents contended that the petitioner was not qualified under Section 399 due to the absence of specific details in the consent letters from the petitioner’s family members. However, the Tribunal noted that the annual return (Annexure P-3) showed the family’s shareholding, thus establishing the petitioner’s eligibility. It was emphasized that disputed shares should not be considered in determining the required percentage of shareholding for eligibility.

2. Validity of the Allotment of 15,000 Shares to the First Respondent:
The main controversy centered on the allotment of 15,000 shares to the first respondent on 5th December 2007. The petitioner claimed no Board Meeting was held, and even if it was, there was no valid quorum as Mrs. Jayshree J. Vyas did not attend. The first respondent argued that Mrs. Jayshree J. Vyas ratified the allotment on 26th December 2007, and the petitioner was aware of the allotment in December 2007 but delayed challenging it until 2010. The Tribunal found that Mrs. Jayshree J. Vyas approved the allotment in December 2007, and the petitioner delayed challenging it, undermining the credibility of the challenge.

3. Allegations of Suppression of Facts and Delay in Filing the Petition:
The respondents alleged that the petitioner suppressed the fact of filing and withdrawing Company Petition No. 36 of 2013 and a criminal complaint regarding the share allotment. The Tribunal noted significant delays in the petitioner’s actions: the initial challenge was filed in July 2010, withdrawn in July 2012, and the present petition was filed in June 2014. The Tribunal referenced case law emphasizing that equitable relief is not granted to those who approach with unclean hands or delay unreasonably. The Tribunal concluded that the petitioner’s delay and conduct did not warrant equitable relief.

4. Allegations of Siphoning Funds by the First Respondent:
The petitioner alleged that the first respondent siphoned Rs. 19,97,860/- to her husband’s proprietary firm, M/s. Fuse Sales. The first respondent countered that the payment was for supplying kit-kat fuses for an order from MGVCL, Vadodara. The Tribunal noted that the petitioner did not raise this issue in the 2010 petition and only brought it up six years later. The Tribunal stated that such allegations should be raised without unreasonable delay and suggested the petitioner could pursue a civil suit to claim the amount if proven.

Conclusion:
The Tribunal dismissed the petition due to inordinate and unexplained delay, suppression of material facts, and the petitioner’s conduct in filing and withdrawing petitions. The Tribunal did not find grounds to exercise equitable discretionary powers in favor of the petitioner, and each party was ordered to bear their own costs.

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