TaxTMI 
TaxTMI 
2004 (12) TMI 700
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....consideration for shares was effectively the value of the Bungalow owned by the company. On the same day, another supplementary agreement was entered into by which the petitioner was to pay ₹ 191.126 lacs for 152 equity shares pending payment for the balance 848 shares. In terms of this supplementary agreement, the petitioner paid for the 152 shares held by the 3rd, 5th and the 6th respondents who in .turn delivered transfer instruments along with share scripts to the petitioner. Thereafter, certain disputes had arisen between the parties, which resulted in filing of a suit No. 743 of 2002 by the petitioner wherein it had sought for specific performance of the two agreements by the respondents. In the suit, a consent decree was passed for specific performance. It was later modified with the consent of the parties granting liberty to the petitioner to seek for refund of the amount paid under the agreement and liberty to the respondents to claim damages. Thereafter, the petitioner filed Chamber Summons praying for various reliefs inter alia including refund of the amount paid by the petitioner to the respondents and also for a permanent injunction restraining the respondents fr....
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....rs but it has an indefeasible right of becoming a member not only in terms of the two agreements but also by virtue of the findings of the High Court. The company was a party to both the agreements and therefore the terms of the agreement are binding on the company. In the supplementary agreement in terms of which the petitioner paid consideration for 152 shares, it is specifically mentioned " The transferee will be entitled to have the said shares transferred to their names in the record of the company and also register the same with the Registrar of Companies in its record. The consenting party shall ensure that the transfers are effected without raising any objections". The agreements have been signed by the respondents both in their capacity as shareholders and directors of the company and even in the supplementary agreement, it has been specifically stated that the original agreement was a tripartite agreement between the petitioner, the shareholder respondents and the company represented by shareholder directors. Further, when the petitioner sought for a decree for refund of the consideration paid for the 152 shares, the High Court has observed that in so far as the....
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....d prayer was made apprehending that the respondents would sell the only property of the company which would affect the contractual right of the petitioner. But now the respondents have advertised for the sale of the premises of the company and the petitioner has challenged the same in its capacity as a shareholder as the interest of the company would be affected in as much as there is always an underhand dealing in sale of properties. Further, since the final disposal of the petition has been kept in January, 2005, continuing the interim Order would not in any way prejudicially affect the respondents. 8. Replying to the arguments of the counsel for the petitioner, Shri Haksar submitted that all the cases relied on by the petitioner relate to cases of devolvement of shares by operation of law and as such cannot be applied in the present case since the petitioner, notwithstanding that it is in possession of. the share scripts for 152 shares, never applied for registration in its name and as such cannot be considered to be a member of the company to maintain this petition. Accordingly, he submitted that the petition deserves to be dismissed as not maintainable or in case it is held t....
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....ed by the company for over two years with out allotment, the petitioner should be treated as a member for the purposes of Section 399 and held that the said petition was maintainable. Similarly, in another case, decided by this Board, Viz Vijaya Finance Corporation Ltd. and Anr. V. The Peerless General Finance & Investment Co. Ltd (Order dated 29th Oct. 2004), by a scheme of arrangement sanctioned by the High Court under Sections 391/394, certain shares were transferred and vested in the transferee company. When it filed a petition under Section 397/398 against the respondent company, a stand was taken by the respondents that the Board of the company had refused registration of the shares in the name of the transferee company as the transfer of the shares was in violation of the provisions of the Article and therefore, name of the transferee company was not entered in the register of members. Since the name of the transferee company was not in the register of members, it could not maintain a petition under Sections 397/398. This Board found that there was no violation of the provisions of the Articles and that the refusal to register was not on bonfide grounds and held that the sai....
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.... ensure that the transfers are effected without raising any objections". These stipulations in the agreement would indicate, that the respondent shareholders have waived the preemption right and the company has undertaken not to raise any objection in the registration of the shares. In other words, there could be no bar in the registration of the 152 shares in the name of the petitioner in the register of members. Therefore, as rightly contended by Shri Ganesh the petitioner has an indefeasible right to get its name entered in the resister of members and its failure to apply for registration cannot give a right to the respondents to unsuit the petitioner in the present proceeding only on the ground that its name is not in the register of members. Therefore, the petitioner has to be treated as a member of the company for the purposes of Section 399 not withstanding the fact that its name is not in the register of members and as such this petition is maintainable. 10. As far as vacation of the exparte interim Order is concerned, the main ground for seeking the vacation is that the petitioner is indulging in forum shopping as the Bombay High Court has already rejected the prayer....