2012 (1) TMI 325 - Board - Companies Law

Summary

Issues Involved:
1. Maintainability of the petition.
2. Requirement of succession certificate, probate, or letters of administration.
3. Composite petition under multiple sections of the Companies Act.
4. Locus standi of the petitioner.

Summary:

1. Maintainability of the Petition:
The petitioner filed CP No. 76 of 2011 u/s 111, 397, 398, 399, 400, 402, 403, 404, and 405 of the Companies Act, 1956, seeking various reliefs including the declaration that the affairs of the company are being conducted oppressively and the rectification of the register of members to include his name. The application was contested on the grounds that the petitioner is not a member of the company and has not submitted any succession certificate, probate, or letters of administration to substantiate his claim for membership. The court concluded that the petitioner has not made out sufficient grounds to invoke section 111 of the Act and that the petition is not maintainable.

2. Requirement of Succession Certificate, Probate, or Letters of Administration:
The petitioner claimed entitlement to his late father's shares but did not provide any succession certificate, probate, or letters of administration as required by the company's articles of association. The court emphasized that without these documents, the petitioner cannot establish his claim to the shares. The court referred to the Supreme Court judgment in *Margaret Desor*, which held that legal representatives must obtain letters of administration to be treated as members for the purpose of maintaining a petition u/s 397 and 398.

3. Composite Petition Under Multiple Sections:
The court noted that the petition is a composite one, combining reliefs u/s 111 with allegations under sections 397 and 398. It was held that such a composite petition is not maintainable, especially in the face of disputed succession issues. The court reiterated that the petitioner must first establish his claim to the estate and shares of the deceased in a civil court.

4. Locus Standi of the Petitioner:
The petitioner argued that as the legal heir of the deceased shareholder, he has the locus standi to file the petition. However, the court held that according to section 399 of the Act, only a member or members of the company can apply u/s 397 and 398. Since the petitioner is not on the register of members, he does not qualify as a member under section 41 of the Act. The court concluded that the petitioner does not have the locus standi to maintain the petition.

Conclusion:
The court allowed CA No. 203 of 2011 and dismissed CP No. 76 of 2011, holding that the petitioner is not entitled to maintain the petition. The petitioner is at liberty to file a petition after obtaining the necessary succession certificate, probate, or letters of administration. All interim orders were vacated, with the order suspended for three weeks from receipt.