2010 (9) TMI 924 - Board - Companies Law

Summary

Issues:
Rectification of register of members for incorporating shares, Alleged re-allotment of shares, Disputed resolution of allotment, Forgery contention

Analysis:
The petitioner filed a petition under sections 111 and 113 of the Companies Act, 1956, seeking rectification of the register of members to include 4,000 shares allotted to him. The petitioner and others formed a company with an authorized share capital of Rs. 5 lakhs, and 4,000 shares remained unsubscribed until August 30, 2006. Subsequently, shares were transferred to the petitioner, but a dispute arose regarding the allotment of shares to other parties without the petitioner's knowledge. The petitioner alleged that the re-allotment of shares to others was invalid and sought rectification.

Respondents contended that the petitioner did not attend a crucial meeting where 4,000 shares were allotted to them on February 23, 2009, due to the company's financial needs. They denied the petitioner's investment claims and argued that the petitioner did not cooperate in the company's affairs, leading to changes in signatory authority. Respondents maintained that the petitioner did not subscribe to additional shares beyond the initial 800 owned by him, and the relief sought should be dismissed.

During arguments, the petitioner's counsel cited legal precedents to support the claim that re-allotment without proper notice to the petitioner was invalid. Respondents' counsel argued that the dispute over the alleged forgery required trial by evidence and should be decided in a civil court. The main issue for consideration was whether the Company Law Board could adjudicate a disputed fact when the document relied upon by the petitioner was contested as forged.

The Board held that without concrete evidence to prove the disputed resolution, solely relying on affidavits was insufficient. The petitioner failed to provide additional proof beyond the contested document, which was in his possession. As the forgery claim was central to the case and not adequately addressed, the Board concluded that the civil court was the appropriate forum for resolving the issue. The petitioner was granted the liberty to pursue the matter in the civil court within a specified timeframe.

In conclusion, the petition was disposed of, emphasizing the need for proper evidence in cases involving disputed facts like alleged forgery, directing the petitioner to seek redress in the civil court within the stipulated period.