2017 (4) TMI 1419

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.... of2012. The 1st Respondent, Suhas Chakma filed the petition under Sections 397 and 398 read with Section 111 of the Companies Act, 1956 before the erstwhile Company Law Board alleging oppression and mismanagement by the appellants/respondents. It was alleged that the respondent illegally transferred I respondent's/petitioner's shares to 2nd respondent. The 1st respondent/petitioner prayed to declare the transfer of petitioner's share in favour of 2nd respondent as illegal, null and void and for restoration of his shares and for consequential rectification of register of the members of the company. The Tribunal after hearing the parties and on perusal of the record came to the conclusion that transfer of shares of I st respond....

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....de from relevant portion of the judgement as quoted below: "The detail of the respondents and the averments contained in the counter are to the following effect and are material for the adjudication on this point:- "The petitioner transferred his shares voluntarily to Mr Vittal Rao, i.e. Respondent No. 2 herein and received a consideration in cash. It is submitted that the transfer of the shares had been done properly by the Respondent No. I and recorded in the books in the ordinary course of business. Being a private limited closely held company with two shareholders, the Respondent Company, after a period of seven years of the transfer of the shares, has not preserved the said records as it was not required to under any statute to mai....

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....tes/letter of allotment in question and rather had tried to take shelter under the provisions of Section 163 of the Companies Act, 1956 and the Companies (Preservation and Disposal of Records) Rules 1966 to contend that the transfer of shares had been done properly by the Respondent No. 1 and recorded in the ordinary course of business and that the respondent company being a private company, did not have onus to preserve documents other than those required by law to be so preserved by it. XXX "In the instant case whether the respondents have fulfilled the burden of proofin support of the entries made in the Annual Returns in relation to the transfer of shares of the petitioner to the 2nd respondent, particularly when the said entries are....

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....ent from the portions extracted in the paragraphs above, the 2nd respondent by way of an affidavit dated 28.07.2015 filed under the directions of the CLB subsequently has resiled from statements made in reply to the petitioner, thereby resulting in approbation and reprobation on the part of the 2nd respondent, rendering the entire transaction of transfer of shares itself into question and as a sham done for malafide and ulterior motives; d) Further there is no proof produced for the payment of consideration of the alleged Rs. 50,000/-even though it is claimed that the same had been paid in cash. However, no valid receipt has been produced obviously thereby the transfer, even if any as claimed by the respondents, being hit by Section 25 of....