TaxTMI 
TaxTMI 
2017 (9) TMI 1200
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....re shareholders of the 1st Respondent Company since its incorporation. Petitioners No. 1 to 4 are holding 2000 equity shares each in their names. Husband of Petitioner No.4 Late Shri Mahendrabhai Patel was also holding 2000 equity shares. According to the Petitioners, Petitioner No.4 as legal heir of her husband is entitled to 2000 equity shares of her late husband under a Pedhinama of late Shri Mahendrabhai Patel. 3. Respondent No.2 is the Director of the 1st Respondent Company and holding 40000 equity shares. Respondents No. 3 and 4 are also Directors of the Company, but are not holding any shares. Respondent No.5 is a Company Secretary who filed Annual Return dated 29.9.2012 showing particulars of transfer of shares challenged in this Petition. Respondent No.6 is the Company Secretary who filed Compliance Certificate for the year 2012. 4. According to the Petitioners, they being the partners in the Partnership Firm and thereafter being shareholders in the 1st Respondent Company they were promised to give a place in the Board of Directors after the Hotel started functioning. However, the Respondents denied to induct the Petitioners as 'Directors'. Respondents even denie....
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....ible to file this Petition. 7. Respondent No. 3 filed Reply. Respondent No.3 stated that Petitioners did not pay any subscription towards 2% of the Capital of the 1st Respondent Company as consideration. It is the case of Respondent No.3 that Petitioners were admitted as subscribers only to fulfil the criteria for minimum 7 Members and it was never intended to make them as a part of management team. As per the terms of understanding between the family members the share transfer deeds and share certificates were handed over to late Shri Vithalbhai Patel for the purpose of transfer of shares of Petitioners and on the basis of those instruments transfer of shares of Petitioners were registered on 27.02.2012 in accordance with Section 108 of the Companies Act, 1956. The transfer of shares had taken place between the Petitioners and late Shri Vithalbhai Patel. Respondent No. 1 only effected and approved the transfer of shares on the basis of the instruments received from the transferees. It is further stated that unless the deed of transfer is accompanied by the relevant share certificate the transfer of shares could not be effected, since endorsement shall be made on the reverse of th....
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....lause in the Articles of Association of the Company to maintain the share of the Petitioners as 10% shareholding. Respondents also denied their averments that the 1st Respondent Company is a conversion of Partnership Firm. According to the Respondents as on the date of the Petition Respondent No.3 is holding 40000 equity shares and the Respondent No.4 is holding 30000 equity shares of the 1st Respondent Company. Respondent No.2 is holding 30000 equity shares of 1st Respondent Company. Thereby all the Respondents No. 2 to 4 are holding 100% shareholding in the Respondent Company. Respondents also denied the averment that the Company borrowed amounts from the Petitioners. Respondents stated that the Petitioners failed to produce any document to show that they are having shares in the 1st Respondent Company as on the date of filing of the Petition. The Respondents along with late Shri Vithalbhai Patel, who is husband of Respondent No.2 and father of Respondents No. 3 and 4 were holding 90% shareholding in the Company since incorporation and their holding became 100% after transfer of Petitioners' shares in the name of late Shri Vithalbhai Patel. Therefore, there is no material cha....
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....lding shares in the 1st Respondent Company, they filed only the Memorandum of Association. A perusal of the Memorandum of Association, no doubt, shows that Petitioners No. 1 to 4 and late Shri Mahendrabhai Patel are having 2000 equity shares each in the 1st Respondent Company. This Memorandum of Association is dated 29.7.2002. 15. Even according to the Petitioners, their shares and the shares of late Mahendrabhai Patel were illegally transferred in the name of late Vithalbhai Patel, who is the husband of Respondent No.2 and father of Respondents No. 3 and 4. According to the Petitioners, they have not executed any transfer deeds and they have not been paid any consideration for transfer of shares. Petitioners also pleaded that late Mahendrabhai Patel died in the year 2008 and in support of the same filed his Death Certificate also. Petitioners further stated that the shares of late Mahendrabhai were also transferred in the year 2012. 15.1 Regarding the transfer of shares of Mahendrabhai Patel who died in the year 2008, it is the case of the Respondents that Petitioners have handed over the share certificates, and transfer deeds to late Shri Vithalbhai Patel and they were presente....
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.... by the Company. Therefore, the non-production of Share Certificates by the Petitioners goes to show that their case that they have not transferred the shares appears to be highly improbable. 17. The Petitioners, with the permission of this Tribunal, took inspection of the Registers of the 1st Respondent Company. The said inspection of the Registers of the 1st Respondent Company made by the Petitioners in the presence of their Professional and observer on 16.5.2015 discloses that in the Register of Members, Folio Nos. 3 to 7 reflect the Transfer of shares of late Mahendrabhai Patel, Petitioner Nos. 1, 4, Petitioner No. 2 and Petitioner No.3 respectively. The Observer's Report also discloses that the shares of Petitioners Nos. 1 to 4 and of late Mahendrabhai Patel were transferred in the name of late Vithalbhai Patel. The Petitioners themselves filed Annual Return for the year 2011-2012 of the 1st Respondent Company and in the Annexure annexed to it, it is clearly mentioned that the shares of Petitioners No. 1 to 4 and of Mahendrabhai Patel were transferred to late Vithalbhai Patel and the relevant Form was duly uploaded in the Website of the Registrar of Companies. Respondent ....
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....issue of fraud has to be decided by the Civil Court, and basing upon the finding of the Civil Court the Petitioners shall approach the Company Law Board for rectification of Register. In the case on hand, it is not even the case of the Petitioners that their signatures were forged on the Transfer Deeds; and it is not even the case of the Petitioners that fraud, undue influence or coercion have been played on them in order to procure duly signed Transfer Forms from them. It is the case of the Petitioners that they have not handed over Share Certificates and that they have not handed over Share Transfer Forms to any one. But once the share transfer is effected in the Register of Members, unless and until it is disproved the Petitioners cannot obtain relief of rectification of their names in the Register of Members. 19. Now coming to the aspect of delay and laches on the part of the Petitioners, in the case on hand the transfer of shares took place on 27.2.2012 and the same was shown in the Register of Members and as well as in the relevant Annual Return duly certified by the Chartered Accountant and the Compliance Certificate issued by the Company Secretary. According to the petitio....