1984 (3) TMI 323 - HC - Companies Law

Shares warrants and entries in register of members, Powers of Court to rectify register of members

Summary

Issues Involved:
1. Entitlement to registration of 167 shares held by late Som Parkash Rajpal.
2. Requirement of succession certificate for the estate of Smt. Shakuntala Rajpal.
3. Necessity of estate duty clearance for registering shares of Smt. Shakuntala Rajpal.
4. Maintainability of the petition.
5. Proper party status of petitioners Nos. 2 to 6.
6. Alleged transfer of 272 shares by Smt. Krishna Rajpal to respondent No. 2.
7. Petitioners' entitlement to shares as heirs of Smt. Krishna Rajpal.
8. Agreement regarding distribution of 272 shares of Smt. Krishna Rajpal.
9. Status of 67 share scrips held by Som Parkash Rajpal.
10. Entitlement to duplicate share scrips for the 67 lost or untraceable shares.
11. Validity of allotment of additional shares by the company.
12. Plea of laches.
13. Relief.

Issue-wise Detailed Analysis:

Issue No. 1: Entitlement to Registration of 167 Shares
The petitioners, being the widow and children of late Som Parkash Rajpal, are entitled to registration of the 167 shares held by him. The respondents did not dispute the status of the petitioners as the heirs. The claim by Smt. Shobha Chutani was deemed an attempt to delay the process. The court held that Smt. Krishna Rajpal had relinquished her rights in favor of the petitioners, as she never asserted any claim during her lifetime.

Issue No. 2 and 3: Requirement of Succession Certificate and Estate Duty Clearance
The petitioners had already obtained a succession certificate for Smt. Shakuntala Rajpal's estate. A notification indicated that estate duty clearance should not be insisted upon for transmission of shares by operation of law. The respondents' insistence on these requirements was unwarranted.

Issue No. 4: Maintainability of the Petition
The court rejected the respondents' argument that the petition involved complicated issues unsuitable for summary proceedings under Section 155 of the Companies Act. The main controversy regarding the 167 shares was straightforward. The court emphasized that the provisions of Section 155 are meant to provide a speedy and inexpensive remedy.

Issue No. 5: Proper Party Status of Petitioners Nos. 2 to 6
The court found that respondents Nos. 2 to 6 were rightly impleaded as they were involved in the recalcitrant attitude of the respondent company. The petitioners sought relief pertaining to additional shares allotted to these respondents.

Issue No. 6 and 7: Alleged Transfer of 272 Shares by Smt. Krishna Rajpal
The court refrained from adjudicating the controversy regarding the alleged transfer of shares by Smt. Krishna Rajpal to respondent No. 2 in these summary proceedings and left the matter to be agitated in a regular suit.

Issue No. 8: Agreement Regarding Distribution of 272 Shares of Smt. Krishna Rajpal
Similarly, the court left the controversy regarding any understanding or agreement about the distribution of Smt. Krishna Rajpal's shares to be addressed in a separate suit.

Issue No. 9 and 10: Status of 67 Share Scrips and Entitlement to Duplicate Share Scrips
The court noted that the 67 share scrips were either lost or untraceable. The petitioners were entitled to duplicate share scrips as no other person claimed those shares.

Issue No. 11: Validity of Allotment of Additional Shares
The additional shares were allotted in the absence of the petitioners, who were not recognized as shareholders. The court directed that the petitioners should be given the choice to subscribe to shares in proportion to their shareholding at all stages when additional shares were allotted.

Issue No. 12: Plea of Laches
The court found that the respondents, who disputed the petitioners' rights, could not plead laches. The petitioners were consistently asserting their rights and were denied recognition.

Relief:
The court directed the respondents to transmit 167 shares of late Som Parkash Rajpal to the petitioners and issue duplicate share scrips for the 67 lost or untraceable shares. The petitioners were also entitled to subscribe to additional shares proportionately. The court awarded costs to the petitioners and imposed special costs on respondents Nos. 1 to 5 for their false and vexatious defense.

Conclusion:
The petition was allowed with costs, and the respondents were directed to comply with the court's orders regarding the transmission and allotment of shares.