2012 (9) TMI 641 - Board - Companies Law

Amendment of the company petition alleged that equity shares held by International Commenter Limited have been unlawfully transferred to Star Light - amendment of the company petition, also on the ground that 44,800 equity shares held by P-14 in R-l have been transferred to R-2 without following the due procedure of law Held that - Amendment sought by Company Application is imperative for proper and effective adjudication of the company petition - It cannot be said that the application for amendment as also the application for impleadment of Star Light suffers from mala fides - proposed amendment does not change the nature and character of the company petition - amendment does not cause any prejudice to the respondents or to Star Light as they would have sufficient opportunity to contest the issues raised by the amendment

Summary

Issues:
1. Impleadment of Star Light Credit (India) Ltd. as a respondent for alleged unlawful transfer of equity shares.
2. Amendment of company petition regarding the transfer of equity shares without following due procedure of law.

Analysis:
1. Impleadment of Star Light Credit (India) Ltd.:
The Company Application was filed seeking to implead Star Light as a respondent due to the alleged unlawful transfer of equity shares held by International Commenter Limited (ICL) to Star Light. The Board found that the petitioners were not aware of the transfer on the date of filing the petition. The shares held by ICL were collateral security with Tourism Finance Corporation of India (TFCI), and it appeared that the physical transfer of shares had not taken place as required by the Companies Act, 1956. The Board noted that the transfer amounted to dilution of the petitioners' shareholding in the company. The relief sought included rectification of the register of members to restore the shareholding of the petitioners. The Board held that it would be unjust to require separate petitions for the reliefs sought and allowed the application for impleadment.

2. Amendment of Company Petition:
The Company Application for amendment was filed concerning the transfer of equity shares held by another party without following the due procedure of law. The Board considered the arguments and case law cited by both sides and found that the amendment was essential for proper adjudication of the company petition. It was noted that the proposed amendment did not change the nature of the petition and would not cause prejudice to the respondents. Refusal of the amendment would result in multiplicity of litigation. Therefore, the Board allowed the application for amendment.

In conclusion, the Company Law Board, New Delhi, allowed both Company Application No. 747 of 2010 and Company Application No. 748 of 2010. The petitioners were directed to file the amended petition, serve notice on Star Light for the hearing, and provide proof of service. The matter was listed for arguments on Company Application No. 400 of 2010 on a specified date. The Board emphasized the importance of the applications in addressing the issues related to the alleged unlawful transfers of equity shares and the necessity of the amendments for effective adjudication of the company petition.