Tax Management India. Com
Law and Practice  :  Digital eBook
Research is most exciting & rewarding
  TMI - Tax Management India. Com
Follow us:
  Facebook   Twitter   Linkedin   Telegram

Home Case Index All Cases Companies Law Companies Law + Board Companies Law - 2000 (2) TMI Board This

  • Login
  • Referred In
  • Summary

Forgot password       New User/ Regiser

⇒ Register to get Live Demo



 

2000 (2) TMI 853 - Board - Companies Law

Issues Involved:
1. Non-transmission of 660 shares to the petitioner.
2. Alleged acts of oppression and mismanagement by issuing further shares.
3. Pending probate and succession certificate proceedings.
4. Rights and entitlements of the petitioner as a legal heir.
5. Additional allotment of shares to the respondents.

Detailed Analysis:

Non-transmission of 660 Shares to the Petitioner:
The petitioner alleged that the company did not transmit all shares held by her deceased father to her. The deceased held 1,171 shares, but only 511 were transferred to the petitioner. The company justified the non-transmission of the remaining 660 shares by citing pending probate and succession certificate proceedings and the deceased's alleged will favoring the third respondent. The court found no justification for the company's action, noting that the company had already recognized the petitioner as the sole heir by transferring 511 shares. The court directed the company to transmit the remaining 660 shares to the petitioner and issue duplicate certificates if necessary, subject to the outcome of the pending probate and succession certificate proceedings.

Alleged Acts of Oppression and Mismanagement by Issuing Further Shares:
The petitioner claimed that the issuance of 1,800 additional shares to the respondents' group, excluding her, was an act of oppression aimed at reducing her shareholding from 56% to 12%. The respondents argued that the additional shares were issued to mobilize funds for the company. The court, without delving into the bona fides of the issue, directed the company to allot 600 shares to the petitioner at par if she applied within 30 days.

Pending Probate and Succession Certificate Proceedings:
The court addressed the respondents' argument that the transmission of the remaining 660 shares was withheld due to pending probate and succession certificate proceedings. The court cited the Madras High Court's decision in Ganshamdoss Narayandoss v. Gulab Bi Bhai, which states that a will cannot be relied upon in defense without probate. The court held that pending probate proceedings could not bar the petitioner's claim to the shares, as the company had already recognized her as the sole heir by transferring 511 shares.

Rights and Entitlements of the Petitioner as a Legal Heir:
The court affirmed the petitioner's entitlement to the shares as the sole legal heir of the deceased. The company had recognized her status by partially transferring shares. The court directed the company to transmit the remaining 660 shares to the petitioner and issue duplicate certificates if necessary, subject to the outcome of the pending probate and succession certificate proceedings.

Additional Allotment of Shares to the Respondents:
The court addressed the petitioner's claim that the additional allotment of 1,800 shares was an act of oppression. The respondents argued that the shares were issued to mobilize funds. The court directed the company to allot 600 shares to the petitioner at par if she applied within 30 days.

Directions and Final Orders:
1. The petitioner will be taken as a director on the board, and board meetings will be scheduled considering her convenience.
2. Copies of all board minutes will be furnished to the petitioner within 15 days of approval.
3. No change in the composition of the board, including the petitioner.
4. No further shares will be issued without unanimous board approval.
5. The petitioner will be entitled to all dividends declared on the 1,171 shares, and any unpaid dividends will be paid within 30 days. If the pending proceedings are decided against the petitioner, she will refund all received dividends.

Conclusion:
The petition was disposed of with the above terms, and no order as to costs was made.

 

 

 

 

Quick Updates:Latest Updates