TaxTMI 
TaxTMI 
2009 (11) TMI 515
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....d into one thousand equity shares of Rs. 100 each and a paid-up capital of Rs. 56,000. There were only two original subscribers Shrimati Satya Chowdhry, wife of late Chowdhry Brahm Prakash, the first Chief Minister of Delhi holding ten shares of Rs. 100 each and Mr. Kishor Lal Sachdeva holding five shares. Chowdhry Brahm Prakash is stated to have acquired 500 shares of the company out of the total share capital of 560 shares in the year 1962 for which three share certificates were issued. In the year 1963 he formed a society by the name of Shaheed Memorial Society (Regd.), respondent No. 1 herein, of which he became the president. The 500 shares held by him in the said company were transferred to the society of which he continued to be the president till his death. It is the claim of appellants 1 to 4 that in the year 1983 the society was allotted 150 additional shares by the said company but during the period 1968-89 these shares were transferred to different parties leaving the society with no shareholding in the company by the end of the year 1989 and the name of the society was removed from the register of shareholders of the said company. In a nutshell the claim of the appella....
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.... or special meeting. The society alleged that it had learnt that the company had without any cause omitted the name of the society from the register of members of the company and the directors of the company had transferred the shares belonging to the society to themselves or their nominees or friends. No proper instrument of transfer duly stamped and executed by or on behalf of the society is stated to have been delivered to the company along with the certificate relating to the shares. This transfer is alleged to be irregular surprisingly on the ground that as per rule 6 of the articles and memorandum of association vested in the governing body of the society though it is really a matter of running of the society and not of the company. No Board resolution is stated to have been passed by the society for transfer of its shares. The claim was made that the name of the society should be recorded in the register of the members of the company for 61 to 560 shares. 4. This petition filed before the Company Law Board ('CLB') by the society was resisted on behalf of appellant No. 1 herein by filing a reply alleging that the society was no more a shareholder of the said company. The s....
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....5 030 29th January, 1974 Sh. Rakesh Kumar, G/68, Bah Nagar, New Delhi 10. 426-455 030 29th January, 1974 Sh. H.S. Gulat, 23, Mohan Park, Delhi-110009. 11. 456-475 020 29th January, 1974 Sh. Om Prakash, 313-F, Outram Lines, Kingsway Camp, Delhi-110009 12. 476-505 030 29th January, 1974 Smt. Sharda Devi, C-2, Bali Nagar, New Delhi. 13. 506-535 030 29th January, 1974 Smt. Vidya Khera, G/68, Bali Nagar, New Delhi 14. 536-555 020 29th January, 1974 Smt. Promila Kishore, 309-F, Outram Lines, Kingsway Camp, Delhi 15. 556-560 005 1989 Sh. Chowdhry Brahm Prakash, New Delhi 5. A perusal of the aforesaid shows that these transfers have occurred from 1968 to 1974 except five shares in 1989. 6. It is important to note that in the affidavit it has been alleged that in the year 1986 the society had filed a case in the city civil court alleging that the land sold by the company does not actually belong to it and the land in question actually belonged to the society which suit had been dismissed. The relevance of this averment will be discussed later as in the course of hearing of the appeal the....
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....that Mr. Ajay Chowdhry had no right to extinguish the cause of action of company petition. There was no opposition to the restoration of the petition by the company and on 29th June, 2006 the CLB passed an order restoring the petition and directed it to be listed for final arguments on 23rd August, 2006. 10. The society and Mr. Ajay Chowdhry thereafter filed a writ petition under articles 226 and 227 of the Constitution of India on 27th April, 2007 seeking to challenge the order of the CLB dated 29th June, 2006 restoring the company petition to its original number. In the mean time subsequent orders had also been passed by the CLB numbering six on the later dates which were also sought to be challenged in this writ petition. The writ petition, however, was directed to be registered as a company appeal and assigned a company appeal number, being C.A.(SB) No. 9/2007. In the company appeal C.A. No. 723/2008 was filed. The said application in the appeal came up for consideration before the learned Company Judge on 30th April, 2009. In the said proceedings it is recorded that on the previous date of hearing the counsel for the society urged that it was not concerned with inter se dis....
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....l contempt. The learned Company Judge came to the conclusion that in the light of the prohibition it was not open to Shri Ajay Yadav to represent the company and this fact had not been informed to the court by the counsel representing Mr. Ajay Yadav. The vakalatnama filed by the counsel on behalf of Shri Ajay Yadav as if he was representing the company was found to be in teeth of the order of injunction and the action of Shri Ajay Yadav in signing the vakalatnama was observed to be a blatant attempt to lower the authority of the court in violation of the order dated 6th October, 2006 passed in CS(OS) No. 1906/2006. The conduct of Shri Ajay Yadav was held to be an effort to prejudice due course of judicial proceedings and would fall within the definition of criminal contempt and the matter was thereafter directed to be placed before the appropriate Bench after registering the petition as such. 12. The aforesaid detailed history was necessary to appreciate the circumstances in which CS(OS) No. 1906/2006 came to be filed in the present court, the present appeals arising from the decision on the interlocutory applications in that suit. The suit has been filed for injunction and dama....
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....he shares came to be transferred and from whom the present shareholders purchased shareholding the details are as under : Year No. of shares Seller Buyer 1968 150 Shaheed Mem. Society Ch. Brahm Prakash 1968 100 -Do- Sh. G.D. Sehgal 1972 5 -Do- Smt. Satya Ch. 1972 5 -Do- Sh. Ajay Ch. 1972 5 -Do- Sh Sidharth Ch. 1974 10 -Do- Sh. Madan Singh 1974 30 -Do- Smt. Usha Kiran 1974 30 -Do- Sh. Sushil Kh. 1974 30 -Do- Sh. Rakesh Sach. 1974 20 -Do- Smt. Promila Kish. 1974 20 -Do- Sh. Om Prakash 1974 30 -Do- Sh. H.S. Gulati 1974 30 -Do- Smt. Sharda Rai 1974 30 -Do- Smt. Vidya Kh. 1983 150 New Allotment Shaeed Mem. 1989 55 Shaheed Mem. Society Sh. J. Rai 1989 100 -Do- Sh. G.D. Sehgal The aforesaid, thus, shows that all the share transfers are stated to have occurred from 1968 to 1989. The society was stated to have been defunct without any activity for 20 years and no returns had been filed till 2005. Thereafter the filing of the company petition under sections 108 and 111(4) of t....
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.... representing or holding themselves out as shareholders, writing on letterheads of the appellant-company, removing any records, disclosure of any transaction, dealing with assets of the company and claiming damages. This plaint dated 4th October, 2006 was listed before the learned Single Judge on the original side on 18th October, 2006 along with the interlocutory application filed under order 39, rules 1 and 2 of the Code seeking interim relief. The respondents herein were restrained from representing themselves as shareholders/representatives of the appellant-company till further orders. 16. The suit was resisted by the respondents. The story set up by the respondents is in the same manner as their claim set out above. In reply to paragraphs of the plaint dealing with the registered office and the increase of authorised capital all that has been stated is that it warrants no reply. It is material to once again note that para 1.5 of the plaint deals with the increase of issued capital and the respondents in response to the same have once again reiterated the aspect of their holding the share of the company which is in possession of the society. Similarly while dealing with para....
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....issions as recorded in the proceedings of 18th September, 2009. Further submissions in this behalf were heard on 14th October, 2009 when judgment was reserved in the appeals. 19. The respondents filed an appeal being FAO (OS) No. 423/2009 on 16th September, 2009 by which time arguments had been heard in FAO (OS) No. 337/2009. This appeal was listed on 18th September, 2009 and we noted that at the stage when the hearing was going on in FAO (OS) No. 337/2009 the respondents had not expressed any intention of filing an appeal against the impugned order and that the then senior counsel appearing had defended the order. The new senior counsel appearing in FAO (OS) No. 423/2009 stated that the appellants were only concerned with the operative portion of the directions in the impugned order since despite vacating the order of ex parte injunction the learned Judge in the operative portion of the order had passed interim injunction against both the parties. The parties were heard on this aspect also on 14th October, 2009 when judgment was reserved. 20. A reading of the impugned judgment shows that after discussing the factual matrix the learned Judge found that this was really a fight....
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....o be that of Mr. Ajay Yadav. Learned counsel, thus, emphasised, and in our considered view, rightly so, that it is only when the society would have succeeded in its petition under section 111 of the Act would the question of entering the name of the society on the register of members arise. It is the own case of the society and the group of late Chowdhry Brahm Prakash that their names had been wrongly excluded from the register of members. The termination of the proceedings were, however, re-activated on an application filed by the society itself through Mr. Sidharth Chowdhry who had filed the original application and the company petition was restored to its original number. A grievance in that behalf was raised by other group representing the society who are the respondents herein and who tried to close the proceedings that there should be no re-activation of the proceedings before the CLB. The company appeal came to be decided by the learned Judge of this court on a categorical plea of their counsel that he was not interested in prosecuting the company petition before the CLB irrespective of the fact whether the rights were recognised or not under the letter dated 26th May, 2006.....
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.... Service v. State Transport Appellate Tribunal AIR 1987 SC 88 where a petition under article 226 of the Constitution of India had been withdrawn without permission to institute a fresh petition and it was observed that a fresh petition would not be maintainable in the absence of such permission as the rule of public policy as contained in order 23, rule 1 of the Code would apply in such cases and the exception is a habeas corpus petition. 26. We find force in the contention of the learned counsel for the appellants in this behalf. It was the own case of the respondents that their name had been wrongly excluded from the register of members and, thus, they had filed the appropriate proceedings under section 111 of the Act to, get the claim adjudicated. It has obviously been a folly on their behalf not to have taken the matter to its logical conclusion where either they Would, have been able to establish their claim or the same would have been rejected. The claim stands withdrawn by them. The respondents seem to have proceeded on the premise that the letter dated 26th May, 2006 would serve their purpose. Prima facie the manner and origination of the said letter itself is not free f....
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....e aspect of the documents filed in support of the case of the plaintiff. 30. The original documents filed by the appellant and which were on record before the learned Single Judge have been perused by us. The register of shareholders is available reflecting the transfer of shares. Similarly, the share certificates with transfer deeds have also been filed. Annual returns for some of the relevant years have also been placed on record. The position as existed in 1989 is reflective from these original documents by which time the society had no shareholding left in the company. The claim of the respondents is predicated on the society owning a part of shareholding which is not borne out of the records. This claim is also falsified by the own stand of the society in the proceedings initiated under section 111 of the Act whereby they wanted their names to be inserted in the register of members of the company. The shares have been transferred in pursuance to the transfer deeds filed. No doubt learned counsel for the respondents contended that when these documents were sought for before the CLB, they were not available and were stated to have been destroyed in fire and only some of the r....
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.... 1985 which had been effected in respect of a plot No. B/45, Satyawati Colony, Ashok Vihar, Phase-III measuring 300 sq. yds. Summons in the suit and the application were issued and the company entered appearance. The suit was, however, dismissed for non-prosecution on 17th November, 1986. This suit is material for the purpose that disputes between the persons managing the society and the company had even arisen during the lifetime of Chowdhry Brahm Prakash and those claims were abandoned when the suit was dismissed for non-prosecution. 34. The appellants, in our considered view, have undoubtedly been able to establish a prima facie case that they are in-charge of the company having shareholding and the society does not figure in the list of shareholders. Once the company is controlled by the appellants group, its functioning cannot be brought to a standstill by the nature of the impugned order passed whereby both the parties have been restrained from dealing with the assets of the company. This would amount to throttling the company and would cause irreparable prejudice and harm to the functioning of the company which is primarily dealing with the landed estate. The balance of c....