AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2013 (9) TMI 1217
X X X X Extracts X X X X
X X X X Extracts X X X X
....en transferred illegally to respondent No. 2 jointly with respondent No. 3. The petitioner-company never passed any resolution for transfer of the said shares. It is the case of respondent No. 2 in [CP No. 4(ND) of 2010] titled as S.P. Gupta v. International Commenter Ltd., pending adjudication before the hon'ble Principal Bench, Company Law Board ('CLB'), New Delhi, that he had been removed as director of the petitioner-company with effect from 18th June, 2009. 2. It has been also submitted that the transfer of the said shares is bad in law because the same has been done without any consideration received by the petitioner. It has also been submitted that no resolution to transfer those shares has been passed by the petitioner and no Board meeting has been held for the purpose. It has been stated that no consideration has been paid for transfer of the above mentioned shares to the petitioner by the transferees. It has also been alleged that the respondent-company nowhere in the reply to the petitions produced the transfer deeds in question, whereas the production of the same is imperative for the adjudication of the present petition. 3. It has also been pleaded b....
X X X X Extracts X X X X
X X X X Extracts X X X X
....would be heard and disposed of along with the petitions only It has been also submitted that the petitions filed by petitioner deserve to be dismissed on threshold as the same are not maintainable To support the above arguments it has been submitted that the petitioner does not fulfil the basic criteria laid down under section 111A of the Act, to maintain the present petition and unless the requirements laid down under the particular section are met, the petition in respect thereof would not be maintainable Section 111A states the following: 111A Rectification of register on transfer-(1) In this section, unless the context otherwise requires, company" means a company other than a company referred to in sub section (14) (i.e., private companies) of section 111 of this Act (2) Subject to the provisions of this section, the shares or debentures and any interest therein of a company shall be freely transferable Provided that if a company without sufficient cause refuses to register transfer of shares within two months from the date on which the instrument of transfer or the intimation of transfer as the....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... on the basis of transfer deeds though duly signed by the then authorised signatory, i.e., a director of the company, but he was not authorised by Board of directors of the petitioner-company for the purpose and respondent No. 2 has misused his powers for this purpose without the knowledge of other directors It is also stated that it has not been disputed by the petitioner that respondent No. 2 had the authority to sign transfer deeds for and on behalf of petitioner at the particular time and his signatures were also lodged with respondent-company as authorised signatory In such a situation the petitions are not maintainable on the said facts mentioned even in the petition 7. It has been further stated that a bare perusal of section 111A of the Act makes it clear that the alleged claim is not covered by the authority vested in the said section The Legislature in its wisdom drafts the sections as it desires and the same must be read accordingly without any ifs and buts, particularly when something is added to an existing provision Here, section 111A was added by restricting applicability of section 111 of the Act only to private limited companies or the companies becoming public ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ade on the basis of a duly signed instrument of transfer within the purview of section 111A of the Act, it cannot be challenged as illegal It was also averred that the petitioner concealed in the petition that reconstitution of its Board of directors, as mentioned in para 9 of the petition, is very much under challenge in a company petition being No. 4(ND)/2010 as all of them except Mr. Robin Gupta were appointed on the basis of fabricated and forged papers and minutes Further, till the date, respondent No. 2 and his two sons were allegedly removed under section 283(1)(g) of the Act, all the affairs of the petitioner-company were being managed and controlled by them only and Mr. Robin Gupta never participated in any proceedings of the company All the returns under the Income-tax Act and the Act were filed by Mr. S.F. Gupta, respondent No. 2, who also signed all the balance sheets of the company with other directors and Mr. Robin Gupta never signed any balance sheet also, as per evidences filed Since Mr. Robin Gupta was not at all participating in the affairs of the petitioner-company earlier, he was not aware of such sale of shares In fact, Mr. Robin Gupta/Mr. B.C. Gupta, on the le....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... respondent No. 1-company accompanied with properly executed documents for transfer Affidavits of the directors of respondent No. 1-company have also been filed The case, if at all is there, then the same is between the petitioner and respondent Nos. 2 and 3 and which at best can be a title suit to which the respondent No. 1-company is not at all concerned It has been further stated that there are five types of petitioners who are permitted as specified under section 111A and the petitioner does not qualify in any of these Secondly, these types of questions can be raised in a civil suit as it involves complicated question of facts and cannot be agitated in summary proceedings like these Also, there is a limitation period under which a petition under section 111A can be filed which in two months, but the petition has been filed after almost twenty months of the alleged incident It has been also stated that the question of removal of the directors of the petitioner-company is pending in another proceeding between the parties in CP No. 4(ND)/2010, before Principal Bench in Delhi 13. It has also been stated by the respondents that in the whole of the petition, the petitioner has not....
X X X X Extracts X X X X
X X X X Extracts X X X X
....y mentions only 5 categories of persons who can seek for rectification and the petitioner is none of them In this regard reliance was placed on the following cases: (a) Shirish Finance & Investment (P) Ltd. v. M Sreenivasulu Reddy [2002] 47 CLA 82 (Bom) : [2002] 35 SCL 27 (b) M Sreenivasulu Reddy v. Kishore R Chabbria [2001] 34 SCL 1 (Bom) (c) Dilip Bhargava v. Trackpart Ltd. [2004] 67 CLA 28 (CLB) : [2005] 63 SCL 544 16. It has also been pleaded that the section provides that rectification can be sought only if the registration of transfer is in contravention of the provisions of SEBI Act, or regulations made there under, or SICA or any other law for the time being in force The petitioner has not challenged the registration of the transfer on any of these grounds, but on the ground that the transfer had not been authorised by the Board and that no consideration had been received and that the transfer is fraudulent None of these grounds can be taken under section 111A(3) of the Act Reliance was placed in this regard on Morgan Ventures Ltd. v. Blue Coast Hotels & Resorts Ltd. [2010] 98 CLA 1 (Bom)....
X X X X Extracts X X X X
X X X X Extracts X X X X
....urther, provisions of section 111A are attracted where transfer of shares is not registered or refused by the company Here, that is not the case because shares have already been transferred on the basis of duly executed transfer deeds along with submission of necessary share certificates for such transfer, as has been recognised by the respondent-company 19. It is also seen from the information placed on record that there has been a dispute between the two factions of the family to control the petitioner-company Though the present management states that the concerned persons were appointed as directors of the petitioner-company in November 2008, yet necessary forms for their appointment were submitted to the RoC in July 2009, after respondent No. 2 and his two sons were allegedly removed as directors of the petitioner-company under section 283(1)(g) of the Act, in June 2009 In view of the fact, not denied by the petitioner, that till 2009 respondent No. 2 was controlling the petitioner-company and filing its returns also and whose signature was duly lodged with respondent No. 1-company, it cannot be doubted that the transfer deeds duly signed by respondent No. 2 on behalf of the....