TaxTMI 
TaxTMI 
1984 (3) TMI 323
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....f transistor radios in India under the trade name "Standard", and this was in collaboration with a Japanese concern which was marketing transistor radios under the same name. At that time, three other brothers of the promoters of this company were minors and were students. However, as they finished their studies and attained majority, they were as well allotted shares in this company from time to time and made directors. The nominal share capital was rupees one lakh, and the same became fully subscribed in this process when the youngest of the brothers was allotted shares. Their mother was also allotted some shares, and the position of the shareholdings in about mid-sixties was as under : Name No. of shares 1. Shri Som Parkash Rajpal 167 2. Shri Kapil Muni Rajpal (brother) 167 3. Smt. Krishna Rajpal (mother) 272 4. Shri Chander Muni Rajpal (brother) 167 5. Shri Shanti Rajpal (brother) 127 6. Shri Anand Rajpal (brother) 100 Total 1,000 Although these brothers had four sisters, none of them at any stage was allotted any share. In the year 1962, Som Parkash ....
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....aughters. However, repeated requests by them to transmit those shares in their favour were ignored with the result, that till this day those shares have not been transferred in their names. At one stage, the petitioners were required to obtain estate duty clearance. This they obtained. Then they were required to furnish succession certificate. This too was complied with by the petitioners. In that succession certificate, as mutually agreed between the petitioners, they requested the company to register the shares in the name of Smt. Shakuntala Rajpal, the widow of Som Parkash Rajpal. The petitioners contended that this was as a matter of convenience and in order to expeditiously get the matters accomplished. I have nothing to doubt this version on their behalf as it is not unoften that such like requests where the relations between the heirs are cordial, are made. The company, however, insisted that the succession certificate should be produced. The petitioners then sent a photo copy of the same, but fault was found in that also on the ground that it had not been certified by a competent authority as correct. The petitioners then complied with that as well. Still the transmission o....
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....owever, died on August 5, 1976, still holding 272 shares in the company and as per record in the Register of shares. Even thereafter, no claim was set up imputing any share to her in the estate of Som Parkash Rajpal. The counters filed in these proceedings also do not make any such assertion. However, when the present petition under section 155 of the Companies Act became almost mature for decision, it has been suddenly realised that under the Hindu Succession Act, mother was as well an equal heir to the estate of Som Parkash Rajpal. This has opened an arena to delay the relief to the petitioners and drag the matter as long as possible. An application was, therefore, moved by one of her daughters, namely, Shobha Chutani, under Order 1, rule 10 of the Code of Civil Procedure (C.A. No. 95 of 1984) for being impleaded as a party in this petition claiming that she is as well an heir to Smt. Krishna Rajpal who in turn was an heir to the extent of l/7th share in the estate of Som Parkash Rajpal, and, therefore, she is entitled to her share in the 167 shares in dispute. Another suit has been filed in which share is being claimed in the other estate left behind by Som Parkash Rajpal. A ....
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....after the demise of Som Parkash Rajpal when the respondents proceeded to allot additional shares to themselves and later inducted Aggarwal group. The respondents, however, have referred to the printed memorandum and articles of association in order to show-that this was done on November 27, 1965, as mentioned at page 8 of the same. The existence of this date in this printed booklet is not free from controversy inasmuch as the certified copy of the memorandum and articles of association which the petitioners have obtained from the office of the Registrar of Companies (page Nos. 214 to 224 of the court file) does not show this date. They state that there was no occasion in the year 1965 to raise this capital, and the course of events also does not show that any increase in actuality in the subscribed capital took place then. However, a copy of the resolution of the general body of shareholders has been placed by respondents on record about this increase in 1965, and the same shows that Som Prakash Rajpal was a party to the same. All additional shares were, however, allotted after the death of Som Parkash Rajpal. This, according to the respondents, was to meet the cost of the plot and....
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.... of copies in that regard have been produced, but they only tend to show what the petitioners felt apprehensive when the shares belonging to Som Parkash Rajpal were not being transmitted in their names, they thereby sought to warn any intending purchaser of the Maya Puri plot that they also had an interest in the same in their capacity as shareholders. The respondents also contend that Smt. Krishna Rajpal had during her lifetime transferred her 272 shares in the respondent company in favour of Shanti Rajpal. A photo copy of a hand written receipt in English dated April 7, 1972, purported to be signed by Smt. Krishna Rajpal in Hindi, transferring her 272 shares at the rate of Re. 1 per share in favour of Shanti Rajpal, respondent No. 2, has been produced, and the same is at page 324 of the court file. It is, however, not shown that this transfer was got registered in the office of the Registrar of Companies then. The petitioners have denied that any such transfer was effected. Rather they assert that they are as well entitled to share in the estate of Smt. Krishna Rajpal, and if that was taken into account, the shares attributed to Smt. Krishna Rajpal in the 167 shares of Som Par....
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....es as owners of any shares. They were, therefore, required to get their claim to the ownership of shares established. It was then that the present petition under section 155 of the Companies Act was moved. The following issues were framed ; "1.Are petitioners not entitled to registration in their favour of 167 shares which were held by late Som Parkash Rajpal in respondent company ? (Note: It has not been disputed from the side of the respondents that petitioners Nos. 2 to 6 are the only children of Som Parkash Rajpal, and that Smt. Shakuntala Rajpal was the widow of Som Parkash Rajpal). 2.Are petitioners obliged to take a succession certificate for the estate left behind by Smt. Shakuntala Rajpal ? 3.Is the estate duty clearance required under law for registering the shares of Smt. Shakuntala Rajpal in favour of the other petitioners? 4.Is the petition not maintainable as such ? 5.Are petitioners Nos. 2 to 6 not proper parties ? 6.Had Smt. Krishna Rajpal transferred her 272 shares in favour of respondent No. 2 during her lifetime for consideration ? If so, to what effect ? 7.In case the preceding issue is not proved, are the petitioners not entitled to s....
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....ala Rajpal, this was mutually agreed upon inter se petitioners as a matter of convenience. Such like acts when there is cordiality and confidence in the family are not uncommon in such situation. The respondents cannot take advantage of the same or nullify or obstruct the rights of the petitioners more so when Smt. Shakuntala Rajpal has as well in the meanwhile died. The claim sought to be set up by Smt. Shobha Chutani in her application under Order 1, rule 10 and section 151 of the Code of Civil Procedure read with Rule 6 of the Companies (Court) Rules is being exploited as a cover up by the respondents like the proverbial catching of a straw by a drowning man and a last ditch battle against the transmission of shares in the petitioners' favour. It is noteworthy in this respect that the respondents have not in their counter or at any stage in these proceedings, taken the stand that the petitioners have not been the exclusive heirs of Som Parkash Rajpal, and that his mother was also entitled to a share. It has been after a lapse of over 16 years that Shobha Chutani has thought of raising the claim. All this course of conduct amply shows that Smt. Krishna Rajpal wanted that that ....
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....ing purported to be signed by Smt. Krishna Rajpal transferring her shares at the nominal value of Re. 1 per share in favour of respondent No. 2, Shanti Rajpal. This has been disputed by the petitioners. The best corroborative evidence in this regard would be the record of the Registrar of Companies. The same would show by contemporary evidence if this transfer was got registered in that office. That, however, has not been proved. In any case, I will restrain myself from adjudicating upon this controversy in these summary proceedings and leave the parties to have recourse to a regular suit. Issue No. 8 : Similarly, I will leave the controversy whether there was an understanding and an agreement that 272 shares of Smt. Krishna Rajpal would be distributed amongst her sons in such manner as to raise the shareholding of each of the sons to 200 to be agitated by a separate suit. Issues Nos. 9 and 10 : The petitioners admit that they have 100 share scrips in their possession. 67 share scrips, however, according to them are with the company. The company is denying the same. It thus appears that those share scrips are either lost or not traceable. None other has claimed those shares. ....
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....ark although they had been constantly insisting on their recognition. No question of laches, therefore, arises. Rather if any person has been guilty of laches, it has been Shobha Chutani in putting up a claim as mentioned in her application (C.A. No. 95 of 1984). The same, therefore, deserves to be rejected on this short ground apart from merits as discussed above. Issue No. 4 : It is sought to be urged from the side of the respondents that the matters involved in this petition are too disputed and complicated as to justify the grant of relief to the petitioners in these summary proceedings under section 155 of the Companies Act. Reference was made in this regard to Dhelakhat Tea Co. Ltd., In re [1958] 28 Comp. Cas. 62 (Cal.) and Anil Gupta v. Delhi Cloth and General Mills Co. Ltd. [1983] 54 Comp. Cas. 301 (Delhi). It has also been contended that any relief to the petitioners would tantamount to partitioning the estate of Som Parkash Rajpal amongst his heirs, and this can never be treated as part of the functions of the company court under section 155 of the Companies Act. In support, reliance has been placed upon the two decisions of the Calcutta High Court in New Monkhooshi....
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....terial on record without any difficulty. It was further observed that it cannot be said that the judge would be committing any irregularity or illegality if he decides a disputed question of fact on the basis of documentary evidence on record, finding that it was not necessary to have the matter tried as a suit separately. Reliance by the respondents on the said two Calcutta High Court decisions is entirely misplaced. In the case of New Monkhooshi Tea Co. Ltd., In re, AIR 1967 Cal 196, there was a purported gift of certain shares by one of the three co-heirs. The same was not accepted by the others. The articles of the company also provided that upon the death of two joint holders out of three joint holders, the shares devolved on the surviving joint holder. Moreover, it had been noted that the company had under some mistake or misapprehension of facts registered the shares in the name of one of the co-heirs instead of all the heirs or co-owners. There was thus a dispute as to whom amongst the co-heirs or co-owners the shares belonged. The question of partition did not arise there. In the other decision, Hemlata Saha v. Stadmed P. Ltd. [1964] 34 Comp. Cas. 875 (Cal.); AIR 1965 C....