TaxTMI 
TaxTMI 
2000 (1) TMI 1017
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....s from this Board for convening an EGM as it is not possible for the company to do so due to non-cooperation amongst the only two directors/shareholders of the company. It is alleged that due to non-cooperation of the respondent, it has become impossible to function in a normal manner resulting in non-finalisation of accounts for the year 1996-97 and 1997-98, non-holding of Board meetings after March, 1998, and non-holding of annual general meeting after the last one held on 30.9.1996. It is further alleged that the company has only two shareholders and directors and since the respondent, the only other shareholder/director of the company, is not co-operating by not attending the Board meetings resulting in the non-holding of Board meetings for want of quorum. 3. In reply to the said petition, Shri Satvinder Singh, respondent, disputed the allegations regarding non-holding of annual general meetings in the years 1997 and 1998. It is further submitted that the accounts for the year 1996-97 have been duly approved in the annual general meeting held on 30.9.1997. In his reply, he further disputed the contention of the petitioner regarding the shareholding pattern claimed by him. It....
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....as first named shareholder and Shri Satvinder Singh as the second named shareholder. Thus, from 6 October, 1995, the petitioner and respondent No. 2 are the only two shareholders of the company and their shareholding is as under: Name of shareholder Number of shares Ashish Das Gupta 2,000 50% Ashish Das Gupta jointly with Satvinder Singh 2,000 50% 5.1 The above two shareholders are only two directors of the respondent-company. The aforesaid position is also confirmed as per annual return made upto 30.9.1996 filed with the Registrar of Companies duly signed by the petitioner as well as respondent and the contents of the same stands admitted. 6. According to the petitioner, later on forged/fabricated annual return as on 30.9.1997 has been filed with Registrar of Companies, Jalandhar, showing the shareholding pattern as under: Name of shareholder Number of shares 1. Ashish Das Gupta 1,000 25% 2. Ashish Das Gupta jointly with Satvinder Singh 1,000 25% 3. Satvinder Singh 2,000 50% 6.1 It is also alleged that the directorship of the company has also been altered as under: ....
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....ioner ceasing to be director of the company with effect from 28.8.98 under Section 283(1)(g) of the Act 8. Shri K.G. Somani, Chartered Accountant, on behalf of the respondent, invited our attention to the annual return filed for the period 1986 to 1995 and submitted that these are registered documents with RoC and depicts the correct position of the shareholders and directors of the company as under: S. No. Directors Date of appointment 1. Ashish Das Gupta 30.12.1985 2. Satvinder Singh 20.12.1986 3. Praveen Kant 30.12.1985 4. R.K. Garg 20.10.1986 5. N.K. Mehandidatta 20.10.1986 S. No. Shareholder Number of shares 1. Ashish Das Gupta 1,000 2. R.K. Garg 1,000 3. Praveen Kant 1,000 4. Ashish Das Gupta jointly -- 4,000 with Satvinder Singh 1,000 9. He further clarified that the respondent has inadvertently accepted the shareholding pattern as depicted in the annual return made upto 30.9.96 as correct in the reply filed in the petition under Section 186 of the Act instead of the annual return upto 30.9.95 and, accordingly, fi....
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....n this case. According to him, the petitioner has destroyed and fabricated the records of the company which is evident from the fact that he took away the statutory records of the company from the registered office of the company to his personal house sometime in September, 1997, and after a long gap of one and a half year, he filed a false complaint with the police at Parwanoo in February, 1999, stating that important records and documents including several share transfer deeds, blank but signed transfer deeds, etc., of the company were missing. 12. Shri Khanna, Advocate, appearing for the petitioner, denied petitioner having made any illegal endorsement on the share certificates. He further submitted that the shareholding pattern of the company as existed on the share certificate has been admitted by Shri Satvinder Singh under his own signatures in Annexure II attached to the annual return made up to 30.9.1996. It is further stated that the shareholding pattern as claimed by the petitioner has been again admitted by respondent in the averments made in para 2 of his reply in the petition filed under Section 186 of the Act. The relevant portion of the reply of the respondent in ....
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....the first time in the annual return made upto 30.9.97. As per the said annual return, the following transfers have taken place since the last annual return as at 30.9.96. 31.3.97 1,000 equity shares Transferred from Ashish Das Gupta to Satvinder Singh 31.3.97 1,000 equity share Transferred from Ashish Das Gupta to Satvinder Singh jointly with Satvinder Singh 15.1 Shri Khanna further stated that the petitioner has never sold the shares as alleged above. No transfer deeds have been signed by him and no such deeds have been produced by the respondent. He further submitted that if respondent's plea is to be believed that he has purchased 2,000 shares from Shri R.K. Garg and Shri Praveen Kant, then aforesaid position of transfers as reflected in annual return made upto 30.9.97 cannot be correct. He, therefore, submitted that, it is abundantly clear that the plea taken by the respondent of having purchased the shares from Shri R.K. Garg and Shri Praveen Kant is not correct and is contradicted by the document on which reliance has been placed. Thus, it follows that the position of the shareholding as reflected in the annual return made....
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....rd meeting held on 31.3.97, he submitted that Shri Bhushan Ahuja was never appointed as an additional director. He emphatically denied the petitioner's attending any Board meeting in which Shri Bhushan Ahuja was appointed as additional director. He further submitted that in support of the appointment of Shri Bhushan Ahuja, as additional director in the Board meeting held on 31.3.97, no Board minutes have been produced. He further submitted that Shri Bhushan Ahuja could not have been appointed as regular director also in the AGM held on 30.9.97 for the reason that in the absence of the petitioner, no proper AGM could have been held for want of proper quorum. 19. Similarly, regarding the cessation of petitioner as director of the company, no minutes or any other evidence regarding the non-attending of three consecutive Board meetings by the petitioner has been produced by the respondent. He further submitted, that no such valid Board meeting could have been held in the absence of the petitioner for want of quorum. He further submitted that the respondent has taken the contradictory stand regarding the cessation of the petitioner as director of the company. In the reply filed i....
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....g the period 1986 to 1995. As the petitioner is claiming the shareholding in annual return made up to 30.9.1996 different from what is stated to be shown in the annual returns, it is necessary and in the interest of justice that the facts brought out and-in sur rejoinder and the reply filed thereto by petitioner be taken into consideration. 23. The petitioner is claiming that he has acquired 2,000 shares in the year 1986 (1,000 shares from Shri Narendra Nath and his family members and 1,000 from Sirmour Sudberg Auto Ltd., photocopy(ies) of the relevant shares certificate have been filed). 24. The petitioner also claims to have acquired another 2,000 shares on 6.10.95 from Shri Praveen Kant and Shri R.K. Garg and these shares were jointly held with Shri Satvinder Singh. During the course of hearing, the records of the company relating to membership of the company and transfer of shares (register of members and share transfers) were shown in support of that contention. 25. On the other hand, respondent is claiming that Shri Ashish Das Gupta acquired only 1,000 shares in his personal name in the year 1986 and another 1,000 shares were held in the joint names of Shri Ashish Da....
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....ing negotiated with them following information was submitted : "We are agreeable to pledge shares of face value of Rs. 50 lakh including the shares to be acquired by Parwanoo Enterprises (P) Ltd. of which we S/Shri R.K. Garg, Ashish Das Gupta and Praveen Kant hold the entire shareholding." 27. Likewise, in the letter, dated 19.8.86 from Shri Praveen Kant to Risk Capital Foundation, Annexure 21, page 26, of the reply to sur rejoinder under the heading 'Brief note on Parwanoo Enterprises (P) Ltd.' -- the following has been stated : "The entire share capital of the above company was purchased by promoters named Shri Ashish Das Gupta, Shri R.K. Garg and Shri Praveen Kant in the ratio of 2 :1:1 respectively." 28. The above position is also reflected in the shareholding pattern of the directors and their relatives at page 11 of annual return made upto 30.12.86. The letters referred to above and summarised shareholding and the details provided by the petitioner as to from whom he has purchased these 2,000 shares, copies of share certificate and entries in register of members of the company lends support to petitioner's contention that 2,00....
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....h. Satvinder Singh 2000 50% equity" 30.1 In the said annual return, following changes in the shareholding pattern have been indicated at Annexure III. DETAILS OF SHARE/DEBENTURE TRANSFERS SINCE DATE OF LAST ACM Date of previous AGM 30.9.96 Date of Transfer Type of transfer No. Ledger folio of transferor Transfer name Ledger folio of transfer transfer name 31.3.97 equity 1,000 13 Ashish Das Gupta 17 Satvinder Singh 31.3.97 equity 1,000 16 Ashish Das Gupta Satvinder Singh 17 Satvinder Singh 30.2 The said annual return is signed by the respondent as well as petitioner. But petitioner has denied signing any such annual return. According to petitioner, a copy of early years' annual return which have been fabricated by the respondent in connivance with auditors of the company. 31. The entire case of the respondent is based on the annual return filed with Registrar of Companies ; all these annual returns were filed together on 31.1.1996. According to respondent, the shareholding pattern from 1986i to 1995 is as under: S. No. Shareholders Shares 1.....
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....35. It was submitted on behalf of the respondent that the share certificates have not been issued as per rules relating to issue of shares and have been endorsed in the name of petitioner under his own signature alone; but the fact remains that the name of the petitioner and shares claimed to be acquired, by him are reflected in the register of members and unless the said register is rectified one will have to go by the entries made in the register of members. The position as reflected in annual return made upto 30.9.96 which was earlier admitted by the respondent and also reflected in the register of members of the company is the correct position of the company's shareholding; accordingly, we hold that the shareholding of the company is as under: S. No. Shareholders Shares 1. Sh. Ashish Das Gupta 2,000 2. Sh. Ashish Das Gupta jointly with Satvinder Singh 2,000 4,000 36. Another point of dispute is regarding the appointment of Shri Bhushan Ahuja as additional director of the company on 31.3.97 ; the petitioner has emphatically denied of having attended any Board meeting in which Shri Bhushan Ahuja was appointed as additional ....
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.... could have been held for want of proper quorum, the question of petitioner ceasing to be director of the company pursuant to Section 283(1)(g) does not arise. We, therefore, hold that Shri Ashish Das Gupta continues to be a director of the company, and the present Board of directors consists of Shri Ashish Das Gupta and Shri Satvinder Singh. 39. The petitioner has also alleged that the accounts prepared for the year 1996-97 does not reflect the correct position of assets and bank balance of the company. We have gone through these accounts and note that there is only one transaction in the profit and loss account, i.e., of audit fee of Rs. 2,500 on expenses side and the loss for the year has been shown equivalent to that amount. Further, in the balance sheet, this fee has been shown as payable and correspondingly accumulated losses have been increased. There is no other change in the figures in the balance sheet. The petitioners in support of his contention has filed bank certificates of State Bank of India showing balance to the credit of the company as on 31.3.97 at Rs. 1,008 and Punjab National Bank of Rs. 1,659 (Annexures A-26 and 27) pages 39 and 40 attached to petitioner r....