2002 (8) TMI 773 - HC - Companies Law

Summary

Issues Involved:
1. Rectification of the register of members of companies.
2. Jurisdiction of the High Court post the amendment of the Companies Act.
3. Implementation of previous court orders and settlements.
4. Division and severance of family business interests.
5. Validity and enforcement of share transfers and management changes.

Detailed Analysis:

1. Rectification of the Register of Members of Companies:
The petitioner filed applications under Section 155 of the Companies Act, 1956, for the rectification of the register of members of companies controlled by the Oswal family. The companies involved included Akshay Finance and Trading Company, Paras Finance and Trading Company, among others. The petitions sought to declare the redemption of certain preference shares as illegal and to rectify the register of members to include the petitioners as holders of these shares.

2. Jurisdiction of the High Court Post the Amendment of the Companies Act:
The court noted that Section 155 of the Companies Act, which vested the power to rectify the register of members in the Company Judge, had been repealed by the Companies (Amendment) Act, 1988, and its provisions were assimilated into the amended Section 111, transferring jurisdiction to the Company Law Board. The court emphasized that it must not revive a petition already disposed of and assume jurisdiction it no longer possesses.

3. Implementation of Previous Court Orders and Settlements:
A settlement was reached in 1987 under the supervision of Justice B.N. Kirpal, which aimed to separate the interests of Shri D.K. Oswal from the rest of the family. The court had issued detailed directions for the transfer of shares and management changes to effectuate this separation. Subsequent applications were entertained to implement these orders, but the court clarified that it only retained the power to pass orders calculated to implement previously passed orders when it had jurisdiction over the dispute.

4. Division and Severance of Family Business Interests:
The court rejected the contention that the Oswal family businesses were partitioned into 1/4th shares each. It concluded that the division postulated was a severance of Shri D.K. Oswal's 1/4th share from the family fortunes, not an equal partition among all family members. The court referenced the 1987 judgment and subsequent orders, which indicated that the businesses were jointly carried out by the respondent group, including the two brothers who are now adversaries.

5. Validity and Enforcement of Share Transfers and Management Changes:
The applications under consideration sought to address disputes arising from the allotment of 10,000 shares in 1998 and changes in the board of directors in 2000, which were subsequent to the death of the late R.C. Oswal. The court noted that these issues were distinct from the original petitions filed in 1986. Additionally, the registered offices of the companies had been shifted from Delhi to Ludhiana, and a scheme of amalgamation was approved by the Punjab and Haryana High Court, further complicating the jurisdictional aspect.

Conclusion:
The court concluded that it no longer possessed jurisdiction over the disputes presented in the current applications. The applications were an attempt to open a new front in the family dispute between the two brothers. Consequently, C.A. Nos. 639 and 640 of 2002 were rejected, while C.A. No. 707 of 2002 was allowed, and interim orders dated May 31, 2002, were recalled.