1997 (9) TMI 625 - Board - Companies Law

Summary

Issues Involved:
1. Eligibility of the applicant to requisition a general meeting under Section 186 of the Companies Act, 1956.
2. Validity of the share transfer and the applicant's status as a shareholder.
3. Compliance with the requisition requirements under Section 169 of the Companies Act, 1956.
4. Impracticability of calling an extraordinary general meeting.

Detailed Analysis:

1. Eligibility of the Applicant to Requisition a General Meeting under Section 186 of the Companies Act, 1956:
The applicant sought directions under Section 186 to call a general meeting for the retirement and re-election of directors and inspection of company records. The company contested the applicant's eligibility, arguing that he was neither a shareholder nor a director, having sold his shares to N. Ravindran. The court emphasized that Section 186 requires the applicant to be a member entitled to vote at the meeting, which the applicant failed to establish due to the disputed share transfer.

2. Validity of the Share Transfer and the Applicant's Status as a Shareholder:
The applicant claimed to hold 304 equity shares, which the company disputed, asserting that the shares were sold and transferred to N. Ravindran. The applicant argued that the instruments of transfer were forged and not delivered to the company. The court noted that determining the title to the shares was beyond the scope of an application under Section 186 and suggested that the applicant seek rectification of the register of members under Section 111 or approach a competent court for alleged forgery.

3. Compliance with the Requisition Requirements under Section 169 of the Companies Act, 1956:
The company argued that the requisition dated January 11, 1997, did not comply with Section 169(4) as the requisitionists, except for two, were not shareholders and did not constitute 10% of the paid-up capital. The court found that the requisition did not meet the statutory requirements, rendering it invalid. Additionally, the company had already addressed the matters for which the meeting was requisitioned, making the requisition infructuous.

4. Impracticability of Calling an Extraordinary General Meeting:
The court examined whether it was "impracticable" to call an extraordinary general meeting as required by Section 186. The applicant argued that the company ignored valid requisitions, making it impracticable to convene the meeting. However, the court concluded that since the applicant did not establish his status as a shareholder, he failed to meet the eligibility criteria under Section 186. Consequently, the court dismissed the application without addressing the merits of the case.

Conclusion:
The court dismissed the application under Section 186, emphasizing that the applicant did not meet the eligibility criteria as he failed to establish his status as a shareholder. The court suggested that the applicant could seek rectification of the register of members or approach a competent court for the alleged forgery of transfer instruments.