TaxTMI 
TaxTMI 
2017 (7) TMI 372
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....eveloping and installation of custom made software, patented software etc. However, as per the petitioner at present the company was engaged in the business of distribution of pharmaceutical products. As per the claim of the petitioner he is a shareholder by holding 75000 equity shares of Rs. 10 each in the paid up share capital of the company, thus constituting 25% of the paid up share capital. Further narrating the background, the petitioner has stated that the petitioner along with the Respondent No. 2 and 3 have acquired the company on 10th August 2005. The company was acquired from the then shareholders, names not necessary, having shareholding of 10,200 shares. The Petitioner along with R2 and R3 held equal percentage i.e. 33.3 per cent by acquiring 3,400 shares each. On taking over the company (R1) the petitioner was appointed as a Director on 10th August 2005. The Petitioner was assigned to look after day to day operation of the company. The claim of the Petitioner is that he had devoted time and efforts towards the growth of the company. Another claim of the Petitioner is that he had contributed Rs. 20 lakhs towards the share capital of the company, as against the contribu....
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....itioner had resigned on 15-10-2008. It had also come to the notice while taking search that on 15-10-2008 the entire shareholding of the Petitioner of 75,000 shares were transferred although as per Petitioner no "share transfer deed" was ever executed by him. It is further alleged that no consideration was paid by R2 and R3 to the Petitioner on impugned transfer of 75,000 shares. 2.6 In the light of the above factual the ground, discussed supra in brief, the relief claimed by the Petitioner in the main Petition as under: Relief(s) sought: In view of the facts mentioned in paragraph 6 above, the Petitioners pray for the following reliefs: The Petitioners humbly pray for an order that- (i.) "Rectification of the register of members by cancelling the transfer for 75,000 equity shares; (ii.) Issue of share certificate for allotment of 71,600 shares; (iii.) appointment of an independent valuer to determine fair value of shares; (iv.) sale of business to either party at fair value determined by the independent valuer; (v.) such further or other orders be made or directions be given affording necessary relief to petitioner as in the premises of....
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....000/- which was increased during the year ended on 31st March 2007. As a consequence, 2,13,750 shares were allotted on 01-12-2007. Since the Petitioner had already deposited the capital contribution hence with his consent fresh 71,250 shares were allotted to him. Out of the outstanding balance of Rs. 15 lakhs, an amount of Rs. 7,12,500/- was used towards allotment of shares and balance amount of Rs. 7,87,500/- was reflected in the accounts as per the balance sheet as on 31-03-2008 under the head Unsecured Loan. 3.3 The Petitioner had demanded refund of his investment and final settlement of his account vide letter dated 28-07-2008 and dated 29-09-2008. As per the Respondents, the account of the Petitioner was finally settled on 15-10-2008, duly signed by the Petitioner. As per the settlement the Petitioner had resigned w.e.f. 15-10-2008. Form No.32 along with the letter of resignation was submitted to the Registrar of Companies. The resignation was also accepted at the Board meeting held in 15-10-2008. The entire shareholding of 75,000 shares were transferred equally in favour of Respondent No.2 and Respondent No.3. The original share certificates along with transfer deeds were ha....
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....name of Mrs. Rucha Gandhi. The Petitioner was always part of the business decision and business correspondence as is evident from a letter dated 16-06-2008 addressed to Manager, Janata Sahakari Bank Ltd. My attention was drawn on the address mentioned of the company. According to the said letter administrative office of the company was stated to be at 1065, (A) Udyamnagar, Ratnagiri 415639 and the Registered Office address is SNEHASHRI, H. No.1570, Plot No.X-26, Mirjole, MIDC, Ratnagiri 415639. The Registered Office is duly communicated on Form No.32 and letters have also been signed by the Petitioner using the letter head of the company wherein the same address of the Registered Office was mentioned. The allegation that the Petitioner was not aware of all those events is baseless because he was not only involved but the office was also at his property hence having free access to the documents of the company. 4.2 My attention was drawn on a bank account of the Rl company maintained in Janata Sahakari Bank Ltd., Pune wherein, vide two cheques bearing no.314572 and no.314571 amounts of Rs. 4,04,195/- and Rs. 7,50,000/- have been issued in favour of Shri Bipinchandra S. Gandhi, Petit....
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....ch as letter dated 10-11-2005 asking to allot the shares. The Respondent had misinterpreted the said letter. The Petitioner has also denied of any final settlement. According to the arguments, the alleged settlement is simply on a piece of paper which appeared to be a forged document, pleaded by the learned A.R. of the Petitioner. Such piece of paper has no sanctity in the eyes of law. The learned A.R. has drawn attention on the annexures annexed with the rejoinder such as bank account with Bank of India of the Petitioner and one memorandum of understanding, a balance sheet drawn as on 31st March 2008. According to learned A.R. only through one cheque bearing no.314572 a sum of Rs. 11,54,195/- was received, on the other hand, the Respondent is certifying that the said amount was received through two separate cheques. The Petitioner has also denied of having access on the documents of the company allegedly capped in the office situated at the residence of the Petitioner. 5.1 Learned A.R. of the Petitioner has submitted written arguments as well, are reproduced below:- 1. The Counsel appeared for the Respondents argued on 27th January 2017 that the Petition is badly vitiated....
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....for transferring the 76000 shares. The claim made by the Respondents that all the shares were transferred and the Petitioner is not a shareholder does not hold good as the meeting did not happen, all documents like Minutes were forged and a story has been cook up by the Respondents. The case laws indicate that mere passing of resolution for transfer is not sufficient and it should be backed by Transfer Deed duly signed and lodged by the Transferor. (Supreme Court - Smt Claude-Lila Parulelkar v. Sakal Papers Pvt Ltd & Others (2005) Vol 107(2) Bom LR 818 (SC), Manna/at Khetan & Ors Vs. Kedar Nath Khetan & Ors (1977) 2 Sec 424 and Prabhjit Singh Johar V. Johar Hotels (P.) Ltd. [2011] 157 Comp Cases 98 (CLB-N.Delhi). Hence the transfer of shares should be declared Null and Void and the Company should be instructed to bring this to the knowledge of the ROC. 3. The learned Counsel for the Respondents stated that the Transfer Deed continued to be in Registered Office which was the Petitioners house even after the above said meeting. The Petitioner resigned from the Board, did not attend the meeting on October 15, 2008 and then how can we expect that the Respondents kept the documents in....
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....were with him and he did not return whereas the fact is different and all documents were only with the Respondents at the Admin Office. 9. The original Share Certificate for 3400 shares is still with the Petitioner and it has not been affixed with Cancelled Seal. The Petitioner never requested for consolidation of shares. Whereas they say that Consolidated Share Certificate for 3750 shares were issued after cancelling the original 3400 share certificate. Without the Petitioner's request how could the Company consolidate his shares? 10. The Counsel for the Respondents quoted that the Balance Sheet, etc were signed by the Petitioner as a Director along with Respondents. However the very same documents available at the ROC do not have the signature of any Director. 11. As per the MOU Mr. J. S. Shinde should have been appointed as the Arbitrator. But actually the arbitration was done by one Mr. Umesh Shinde and who engaged him is not known as the MOU did not give authority to Mr. J.S. Shinde to delegate his power to some one else. The Respondents have not approached any court for implementation of the arbitration order so far. Hence the Arbitration process itself should be de....
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....should be adequately compensated. 6. The Respondent, challenging the maintainability has placed reliance on the case laws discussed hereinbelow:- (a) Bhola Waman Khalkar v. Laxman Waman Khalkar [2014] 126 SCL 105/45 taxmann.com 251 (CLB - Mum.) for the legal proposition that having found that the Petitioner had transferred their shareholding voluntarily and the transfer was not illegal and having found that it was established that the Petitioner was not holding share on the date of filing of the Petition, the Petition is not maintainable in terms of the provisions of Section 399 of the Act. (b) Jiwan Mehta v. Emmbros Forging (P.) Ltd. [2010] 1 taxmann.com 109 (CLB-N.Delhi) for the legal proposition that having found the Petitioner had deliberately concealed the factum of the M.O.U. from CLB, the Petitioner had not come with clean hands. (c) Srikanta Datta Narasimharaja Wadiyar v. Sri Venkateswara Real Estate Enterprises (P.) Ltd. [1992] 7 CLA (Snr.) 19 (Kar.) for the legal proposition that if a litigant moves a Petition to the court for equitable relief then must come with a clean record. For this legal proposition also placed reliance on the decision of Smt. Poonam Sharma v....
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....equity shares by cancelling the transfer. On the other hand, the preliminary objection of the answering Respondent is that the Petitioner has no legal right to file this petition because of the reason that the entire shareholding had been transferred by him. Facts as discussed hereinabove were that the shareholding of the Petitioner was transferred on 15-10-2008. It is not in dispute that after acquiring the company in the year 2005 on three occasions the shareholding pattern of the members/directors had modified and finally increased from 3,400 shares, stated to be acquired on 10th August, 2005, to 75,000 shares. In between first an additional allotment of 350 shares and later on further allotment of 71,250 shares to the Petitioner was made, thus constituting total holding of 75,000 shares. One more fact is not in dispute that the Petitioner and his family member have invested Rs. 20 lakhs in Rl company. The Petitioner had demanded the said amount because in the books it was treated as unsecured loan although according to the Petitioner it was towards capital contribution in the Rl company. The explanation of the Respondents is that on 01-12-2007, equity was increased hence 2,13,7....
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.... important due to the date of resignation claimed to have been communicated to ROC. Thereafter on number of occasions the Petitioner himself has referred the said date as the date of his exit from Rl company. In this regard a letter of the Petitioner dated 08-07-2009 is worth mentioning. From the side of the Petitioner written arguments have been submitted and carefully perused but nowhere specifically rebutted the factum of money transaction held on 15-10-2008, credited in the account on 17-10-2008. The pleadings of the Petitioner mainly revolved around the issuance of additional shares which were allegedly not in the notice of the Petitioner. Likewise, the Petitioner has also denied the execution of share transfer deed. On this legal point the Petitioner had placed reliance on few decisions viz. Smt. Claude-Lila Parulekar v. Sakal Paper (P.) Ltd. [2005] 59 SCL 414 (SC), Mannalal Khetan v. Kedar Nath Khetan [1977] 47 Comp. Cas. 185 (SC) and Prabhjit Singh Johar v. Johar Hotels (P.) Ltd. [2010] 2 taxmann.com 7 (CLB) for the legal proposition that the provisions of section 108 are mandatory in character hence transfer of share must be executed through a proper transfer deed. On the ....