1997 (7) TMI 673

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....company incorporated in 1978. At that time he had taken one share in the company along with 13 other signatories who were also holding one share each. In the year 1980, all the 14 signatories to the memorandum were allotted additional nine equity shares each in the company. Thus, the petitioner came to possess 10 shares for which a share certificate was also issued to him. He left for Zambia in the year 1984 and when he returned to India in 1994 he came to know that the company had cancelled the 9 additional shares issued to him and now he is shown in the register of members as holding only one share. He has also relied on the fact of allotment of nine additional shares in the annual reports for the years 1981 to 1984. His efforts to get th....

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....ng the cancellation of the shares by the company, which was later dismissed for non-prosecution. The petitioner did not choose to agitate the matter till the instant petition has been filed. According to the company, since the cancellation took place in 1984 and the petitioner has come before the Company Law Board only in September, 1995, the petition should be dismissed on account of delay and laches. 4. When the matter was heard Shri R. Murari, advocate, appearing for the petitioner, submitted that the petitioner had gone to Zambia in the year 1984 before the receipt of the alleged letter intimating of the cancellation and that when he returned to India in 1994 he had been corresponding with the company after knowing that the shares were....

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....n 81 of the Act according to which the existing members are to be offered shares in proportion to the capital paid-up, was null and void and as long as the allotment is null and void, the same has been corrected by the company by cancelling the shares illegally issued. The consideration appropriated from the membership fee had also been recredited to the member and as such, the petitioner has not suffered any financial loss in this regard. He further stated that even though this aspect was reported in the audit report for the year 1981 itself and repeated in the subsequent reports, the company could get the approval of the shareholders for cancelling the shares only in the year 1984 and the cancellation was also intimated to all the shareho....

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....ims that he was not in the knowledge of the said letter on account of his being away in Zambia in the year 1984, the petitioner has not stated as to exactly when he left for Zambia. From the photocopy of the passport produced before us, we find that the passport had been issued on 19th March, 1985 (No. W-518811). This passport had been issued in lieu of another passport No. K-301703 dated June 19, 1975. From the perusal of the copy of the passport produced before us, we are not in a position to ascertain the exact date of departure from India to find out whether he left for Zambia before or after April 12, 1984. From the copy of this passport, we also find that the petitioner has made quite a few trips to India from 1986 onwards. Even assum....