1993 (2) TMI 337 - Board - Companies Law

Summary

Issues Involved:
1. Restoration of the name of the petitioner in the register of members.
2. Allegations of wrongful and fraudulent omission from the register of members.
3. Dispute over the natural guardianship and authority to transfer shares.
4. Jurisdiction of the Company Law Board to decide the matter.
5. Validity of the transfer of shares under Hindu Minority and Guardianship Act, 1956.
6. Applicability of listing guidelines and estoppel against statutory rights.

Detailed Analysis:

1. Restoration of the Name of the Petitioner in the Register of Members:
The petitioner sought restoration of his name in the register of members of the respondent-company as the owner of 22,500 equity shares. The petition was filed under Section 111 of the Companies Act, 1956, by Mr. Hemant Bhutta on behalf of his minor son, Jonas Hemant Bhutta. The petitioner claimed that his name was wrongfully omitted from the register of members in July 1990 and replaced by the name of respondent No. 4, Mrs. Sunita B. Shah.

2. Allegations of Wrongful and Fraudulent Omission from the Register of Members:
The petitioner alleged that the omission of his name from the register was wrongful and fraudulent and that no transfer of shares was authorized by him or his lawful natural guardian. The respondent-company argued that the petition was misconceived, involved highly disputed questions of fact, and should be referred to a civil court. They also claimed that Mr. Hemant Bhutta had made false and misleading statements and had not come with clean hands.

3. Dispute Over the Natural Guardianship and Authority to Transfer Shares:
The core issue revolved around whether Mr. Hemant Bhutta or his wife, Mrs. Vibha H. Bhutta, had the right to act as the natural guardian and transfer the shares. The petitioner cited Sections 6 and 11 of the Hindu Minority and Guardianship Act, 1956, asserting that only the father could act as the natural guardian. Mrs. Vibha H. Bhutta, however, had been acting as the natural guardian and had signed the transfer deeds. The respondents argued that all previous transactions involving the minor's shares were conducted by Mrs. Vibha H. Bhutta, and the petitioner had not objected to this practice earlier.

4. Jurisdiction of the Company Law Board to Decide the Matter:
The respondent No. 4 contended that the Company Law Board lacked jurisdiction to decide the matter in summary proceedings due to the complexity of the issues involved. They argued that the proper forum for resolving the dispute was a civil court, as the principle of guardianship could not be adjudicated by the Company Law Board.

5. Validity of the Transfer of Shares Under Hindu Minority and Guardianship Act, 1956:
The petitioner relied on legal precedents to argue that any transfer of a minor's property by someone other than the father, when the father is alive and not disqualified, is void. The respondents countered that the petitioner had selectively challenged only the transfer of 22,500 shares and not the earlier transfer of 32,000 shares, both of which were signed by Mrs. Vibha H. Bhutta.

6. Applicability of Listing Guidelines and Estoppel Against Statutory Rights:
The petitioner argued that the impugned transfer violated listing guidelines as it was not transacted on the floor of the stock exchange. The respondents maintained that the listing guidelines were not applicable to this transaction. The petitioner also cited judgments to support the plea that there cannot be any estoppel against a statutory right.

Conclusion:
The Board concluded that the dispute primarily concerned the question of natural guardianship and the right to transfer shares, which should be resolved in an appropriate court. The Board noted that all transactions involving the minor's shares were conducted by Mrs. Vibha H. Bhutta as the natural guardian, and the petitioner had not objected to this practice earlier. The Board also observed that there was an inordinate delay in filing the petition without adequate explanation. Consequently, the petition for rectification of the register of members was dismissed.