TaxTMI 
TaxTMI 
2017 (7) TMI 372
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....ture of business was to deal in designing, developing 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 cap....
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.... for financial support but suddenly the Respondents have instructed the Petitioner to resign from the Office of the Director. Due to pressure and mental torture the Petitioner 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 ....
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....red a correspondence dated 10-11-2005 made by the auditor of the company. In the reply the Respondent has also explained the delay in allotment of the fresh shares that the authorized share capital was only Rs. 1,50,000/- 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 t....
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....on money", however, in the balance sheet drawn on 31st March 2006, it was bifurcated and a sum of Rs. 12,50,000/- was shown as "share application money" in the name of Shri Bipinchandra S. Gandhi and Rs. 2,50,000/- in the 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 ....
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....eeting. According to him, he had never received any such notice, therefore, never attended the meetings. Likewise, the Petitioner has denied the issuance of additional 71,250 shares. Since he was not aware of the allotment of those shares hence there was no question of signing of any "share transfer form". Rather, according to the Petitioner number of reminders were issued such 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 ch....
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....appened at all as per the Compliance Certificate issued by the Company Secretary (a copy of the Certificate of the Practising Company Secretary is attached and this came to our knowledge only when the Petitioner got the document from the ROC which was subsequent to the filing of our Reply to the Rejoinder, the challan dated 21st July 2015 is attached). Share Transfer Deed was not signed by the Petitioner 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....
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.... the documents long time back and they would not have kept quiet for so many years. 8. Why the resolution for shifting of the Registered Office from the residence of the Petitioner to the Admin Office was not passed immediately after the Petitioner's resignation is a million dollar question. It can be presumed that the Respondents allowed it for the sake of putting forth arguments like this against the Petitioner as if the documents 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 RO....
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.... on date. The Petitioner should be compensated for the injustice done to him by way of transfer of equal number of shares to R 2 and 3 for the contribution made by each one of them amounting to Rs. 5,00,000 as against the Petitioners contribution of Rs. 20,00,000/-. By introducing a fabricated Auditors Report, the Respondents have asked for more than Rs. 5,00,000 as the amount payable by the Petitioner. That should also be refunded. The mental agony gone through by the Petitioner 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 lega....
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....tion when there is no knowledge of alleged transfer of share there is no question of application of Limitation Act and such Petition cannot be treated as barred by limitation." 8. FINDINGS:- Arguments respectively of both the sides have been heard at length in the light of the case laws cited. The pleadings have been carefully perused and the evidences annexed have been taken into consideration. The main prayer of the Petitioner and the relief sought was that a direction be given to rectify the "Register of Members" in respect of 75,000 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 additiona....
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....g, reason being the other corroborative evidence such as accounts of the Respondent and details of the cheques were not doubtful. It could be a case of an inadvertent entry made by Bank of India. 8.3 A serious question is that why the Petitioner had received the said sum of Rs. 11,57,547/-, undisputedly deposited in his bank account? Neither in the pleadings nor during the course of argument any convincing reply was tendered by the Petitioner. The said document, although on a piece of plain paper was dated 15-10-2008 and the said date have become 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 Peti....