TaxTMI 
TaxTMI 
2006 (8) TMI 655
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....imited (the company) constituting 99% of the then issued/paid up capital of 5100 shares. The company owns a Hotel now under the management contract with Indian Hotels Limited. The petitioners, along with the mother of late Maharaj Jagat Singh, namely, Maharani Gayatri Devi (Rajmata) have filed an application for grant of a succession certificate in their favour which is still pending. The main allegation of the petitioners in this petition is that since their father was unwell, the company was being managed by the 2nd respondent who is the brother of late Maharaj Jagat Singh and the son of the 2nd respondent viz. 3rd respondent. They collectively held 50 shares constituting less than 1% shares in the company. It is alleged that with a view to grab the company, the 2nd and 3rd respondents, without the knowledge and consent of the legal heirs, had issued and allotted further 60882 shares on 28.4.2001. By this allotment, the 2nd and 3rd respondents presently control more than 90% shares in the company as against less than 1% shares held by them earlier. This according to them is an act of oppression. It is also alleged that respondents 4 to 8 have been appointed as directors illegally....
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....ether they are legal heirs is a question pending before the Civil Court wherein they have applied for a succession certificate. Even though the said case is pending for over 7 years, the petitioners have not obtained the succession certificate in their favour. The petitioners have not produced any evidence to show that they had at any time sought for transmission of shares in their favour and that the company had rejected their application. In terms of Section 108 of the Act, it is the petitioners who have to apply for transmission of shares. Since they never took any interest to bring their names on the register of members and since a Will has surfaced now, the petitioners cannot claim membership of the company on the basis of the shares held by the father till such time either the Will is rejected or a succession certificate is granted in their favour. Only then they will have locus standi to file a petition under Sections 397/398. The petitioners have relied on Worldwide Agencies P Ltd v Margret T Desor 67 CC 607 to contend that being legal heirs of the deceased, they have the right to apply under Sections 397/398. In that case, succession certificate was granted in favour of th....
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....matter of fact in Mahender Kumar Jain v. Federal Chemicals Works Ltd. 35 CC 651, the Allahabad High Court has held that when the title to the shares is seriously disputed and several disputed question of facts require determination, Section 111 of the Act cannot be invoked to seek rectification of the register of members. Equitable considerations would arise only if the petitioners fulfill the statutory requirements of Section 399. Therefore, they have to first establish their right to the shares by obtaining a succession certificate. 6. In reply, Shri Malhotra, Advocate appearing for the petitioners submitted: The alleged Will, the authenticity of which yet to be confirmed, surfaced only after filing of this petition. Even in the application, the respondents have not mentioned anything about the alleged Will but enclosed it only with the rejoinder. It is a settled law that the maintainability of a petition has to be determined on the day when it was filed. It is an admitted position that in the proceedings relating to succession certificates, Rajmata had admitted that the petitioners are legal heirs of the deceased and even other members family have done so. It was actually a j....
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.... of time, refute the same. It is on record that in the judicial proceedings before the District Judge, Jaipur and Delhi High Court, the family members and Rajmata including the 2nd respondents had admitted that the petitioners are the legal representatives of the deceased entitled to inherit 2/3rd of the estate. In Sangram Singh P. Gaekwad v. Shanta Devi P. Gaekwad 2005 3 CLJ 385, the Supreme Court has held that once an admission is made before a judicial forum, it cannot; be resiled thereafter. 7. The learned Counsel further submitted: In Marget Dessar case, it has been held that the legal representatives of a deceased shareholder can maintain a petition under Sections 397/398 of the Act even without their names being on the register of members. Only if the probate is granted in favour of Rajmata, the petitioners could be declared to have no right to the shares and not till then the uncertainty of the outcome of. the proceedings relating to succession certificate and probate cannot stand in the way of the petitioners maintaining this petition. It is not in dispute that the petitioners are Class I heirs and therefore per-say they can initiate proceedings to protect the interests....
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....ors. In other words, in that case, there was no dispute about the title of the petitioners to the shares but in the present case, the petitioners do not have any title to the shares in view of the discovery of the Will. A careful reading of the judgment reveals otherwise. No doubt that the Supreme Court had noted that the petitioner had obtained a succession certificate, but what it examined was "We are-concerned with two questions of law, namely whether the legal heirs of a deceased shareholder can be treated as members of the company for the purposes of maintaining a petition under Sections 397 and 398 of the Act..." (page 611). This would indicate that what the Supreme Court examined was a pure question of law and not on the basis of the facts as pointed out by the learned counsel. After examining various authorities, the Supreme Court held "It appears to us that to hold that the legal representatives of a deceased shareholder could not be given the same right of a member under Sections 397/398 of the Act would be taking a hyper technical view which does not advance the cause of equity or justice. When the member dies, his estate is entrusted in the legal representative. When, t....
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....w to sustain his claim or that there is some other defect on the face of the pleadings constituting a legal reason why the opposite party should not be allowed to proceed further. In O.N. Bhatnagar v. Smt. Rukibai Narsindas 1982 2 SCC 244 Para 9, it was held that the appellant having raised a plea in the nature of demurrer, the question of jurisdiction had to be determined with advertence to the allegations contained in the statement of claim made by respondent No. 1 under Section 91(1) of the Act and those allegations must betaken to be true. In Roop Lal Sathi v. Nachhattar Singh Gill 1982 3 SCC 487 para 24, it was observed that a preliminary objection that the election petition is not in conformity with Section 83(1)(a) of the Act, i.e., it does not contain the concise statement of the material facts on which the petitioner relies, is but a plea in the nature of demurrer and in deciding the question the court has to assume for this purpose that the averments contained in the election petition are true. Reiterating the same principle in Abdulla Bin Ali v. Galappa 1985 2 SCC 54, it was said, that there is no denying the fact that the allegations made in the plaint decide the forum ....