1989 (11) TMI 257 - HC - Companies Law

Summary

Issues Involved:
1. Discretionary Relief u/s 155 of the Companies Act, 1956
2. Validity of Share Transfer
3. Allegation of Mala Fides
4. Authority of Constituted Attorney
5. Delay and Acquiescence

Summary:

1. Discretionary Relief u/s 155 of the Companies Act, 1956:
The court emphasized that the relief under section 155 of the Companies Act, 1956, is discretionary and must be exercised in accordance with principles of justice, equity, and fair play. The court must consider the facts and circumstances of each case before deciding on rectification.

2. Validity of Share Transfer:
The petitioner was the recorded shareholder of 975 equity shares. However, in the annual return for the period up to June 27, 1985, the petitioner was shown as the shareholder for only 415 shares, with 560 shares transferred to respondent No. 2. The petitioner challenged this transfer as wrongful, illegal, and void, claiming it was unknown to her until February 1987.

3. Allegation of Mala Fides:
The petitioner alleged mala fides in the transfer of 560 shares. The respondent No. 2, through his attorney, claimed the transfer was part of a family settlement after the death of the petitioner's father and was executed with the petitioner's consent. However, the court found no sufficient evidence of this family settlement and noted the absence of any oath from the constituted attorney.

4. Authority of Constituted Attorney:
The power of attorney executed in 1975 authorized the petitioner's elder brother to manage her affairs, including the sale of shares. However, the court questioned the fairness and reasonableness of the transfer, noting the undue haste and lack of intimation to the petitioner. The court concluded that the transfer was not for the beneficial use or enjoyment of the petitioner, thus falling outside the scope of the power of attorney.

5. Delay and Acquiescence:
The respondents argued that the petition should be dismissed due to delay and acquiescence. The court, however, held that technicalities should not defeat the cause of justice. Even assuming some delay, it did not deprive the petitioner of her right to relief. The court emphasized that justice is supreme and must be served.

Conclusion:
The court ordered the rectification of the share register in favor of the petitioner and awarded costs of Rs. 2,000.