AI Drafter 
TaxTMI 
TaxTMI 
2017 (10) TMI 1404
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.... are relevant to the issue in question, as stated in the petition and discerned from the documents filed along with it, are as follows : (1) Relisys Medical Devices Ltd. (hereinafter referred to as the company) was incorporated as a private limited company on October 13, 1997 ; having authorised share capital of Rs. 28,60,00,000 (rupees twenty eight crores sixty lakhs only) of 2,86,00,000 equity shares of Rs. 10 each. The issued, subscribed and paid-up capital is Rs. 27,56,61,450 (rupees twenty-seven crores fifty-six lakhs sixty-one thousand four hundred and fifty) of 2,75,66,145 equity shares of Rs. 10 each. (2) The main objects of the petitioner-company, in brief, are as follows : (i) To establish, engage, in carry on and run or to carry on business as provided in India or elsewhere diagnostic centres, hospitals, nursing homes, convalescent homes, blood banks, medicinal and allied training research centres, laboratories, mobile diagnostics centres and dispensaries, run libraries hold health centres and such other facilities that may be required for the purpose of providing medical services of all kinds and also provide relief to the poor and needy by fr....
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.... above circumstances, the present petition is filed by seeking the relief as extracted above, by contending that violation in question has, taken place due to the circumstances beyond the control of the company ; there is no mala fide intention on its part and approaching the Tribunal voluntarily. 3. I have heard, Shri Y. Suryanarayana with A. Nagaraj Kumar learned counsels for the petitioner, and have carefully perused the pleadings with supported documents along with extant rules of the Companies Act, 2013 and Regulations framed under the FEMA, 1999. 4. The case was listed for admission on various dates, viz., March 31, 2017, April 19, 2017, June 7, 2017, July 6, 2017, July 24, 2017 and July 26, 2017. Learned counsel for the petitioner has taken adjournments on those dates due to various reasons like counsel is not available, to get further instructions, etc. And after reserving matter for orders, learned counsel has also filed written arguments. 5. The issue to be considered in the case is whether the company is justified in filing the present petition under section 59 of the Companies Act, 2013, that too, without complying with conditions prescribed under the RBI lette....
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....he company original name Care Polymed P. Ltd., changed its name to present name vide certificate dated May 27, 2003 issued by the Registrar of company, is governed by the provisions of the Companies Act, 1956/2013. So in addition to the company's memorandum of association and articles of association, it is mandatory to follow all extant provisions of the Companies Act, 1956/2013. So, it is necessary to advert to relevant paragraphs/articles in company's memorandum of association and articles of association and section 59 of the Companies Act, 2013. 7. Since the company petition is filed under section 59 of the Companies Act, 2013 and section 59(1) is extracted below for ready reference : "59. (1) If the name of any person is, without sufficient cause, entered in the register of members of a company, or after having been entered in the register, is, without sufficient cause, omitted therefrom, or if a default is made, or unnecessary delay takes place in entering in the register, the fact of any person having become or ceased to be a member, the person aggrieved, or any member of the company, or the company may appeal in such form as may be prescribed, to the Trib....
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....f arriving at the price of the shares issued to the persons resident outside India." 9. There is clear procedure prescribed under the said regulations 5 and 9 as to price and procedure to be followed for the issue in question. Admittedly, the company failed to follow the prescribed procedure. However, as stated supra, that default in question is not intentional or deliberate. As pointed out by the RBI as stated supra, the company, in the first instance, has to comply the objections raised by it, duly following the relevant articles of association of the company, then it can apply for compounding of contravention in question. While admitting violation of the FEMA Regulations, the company has not taken action in consonance with the memorandum and articles of association of the company and the Companies Act, 2013 except obtaining a letter dated March 3, 2000 from Dr. Raju Reddy stating that he has no objection for rectification of register of members. Ultimately, it is law that should prevail on the issue in question. 10. The other documents filed along with the petition is, memorandum and articles of association of the company. The issue of authorised capital is dealt with unde....
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....e excess shares issued to him, the Tribunal should allow the petition as prayed for. He has also submitted that the company can very well be aggrieved party so as to seek for rectification of its register as mentioned in section 59(1) of the Companies Act, 2013. It is not correct to contend that or company ; as referred to in section 59 is the very same company against which, a direction is sought for rectification of register of members. There are situations that the company itself may invest in other company/companies by way of purchase of shares and such company may file an application/petition for rectification of register of members of such a particular company, if it is aggrieved by action of such company. As pointed by the RBI its letter cited above, the company should take appropriate action in accordance with law as discussed supra. 12. Learned counsel further relied upon judgment of the Company Law Board, Southern Bench, Madras, rendered in Kothari Industrial Corporation Ltd. v. Lazor Detergents P. Ltd. [1994] 81 Comp Cas 617 (CLB) ; [1994] 13 CLA 157 (CLB). The case was filed by Kothari Industrial Corporation Ltd., under section 111(4) of the Companies Act, 1956 prayi....