2015 (6) TMI 945 - Board - Companies Law

Claims to subscription of shares - No proof of holding / registration of shares - Held that - The learned court specifically observed that the applicants have not replied to the letter of the petitioner and also have not demanded calling upon the petitioner to pay the call money at any point of time. Further the learned court have its finding that the records were very much available with the plaintiffs and the truth will come out if the same is produced. in the petition at para 6.21 the petitioner has categorically stated that there was no demand notice served on the petitioner to pay the call money. In view of the specific finding given by the learned court in respect of the above issues and without going into the merits of the case by conducting a detailed enquiry into the facts of the matter, the petition cannot be dismissed at threshold. In view of the reason, the application is miserably failed and liable to be dismissed. Further the CLH in the matter of S.V.T Spinning Mills Pvt Ltd. 2009 (7) TMI 776 - HIGH COURT OF MADRAS had opined that the factual issues cannot be adjudicated as preliminary issue. I do follow the said principle in the above order. - Appeal dismissed.

Summary

Issues:
1. Dismissal of company petition under section 403 of the Companies Act, 1956.
2. Claim of respondent as subscriber to Memorandum of Association and holding 25,000 shares.
3. Dispute over respondent's shareholding and eligibility to file petition under section 397 and 398 of the Act.
4. Removal of company records and allegations of fraud by the 2nd applicant.
5. Allegations of non-compliance and removal of documents by the 2nd applicant.
6. Court's findings on removal of petitioner as director and non-payment of share application money.
7. Court's observations on lack of demand notice and failure to reply to petitioner's letter.

Analysis:

1. The respondents sought dismissal of the company petition under section 403 of the Companies Act, 1956, contending that the petitioner failed to prove the statutory requirements contained in section 399 of the Act. The petitioner claimed to be a subscriber to the Memorandum of Association and a holder of 25,000 shares, but failed to provide evidence such as share certificates or bank particulars to establish ownership. The respondents argued that without proof of shareholding, the petition was not maintainable.

2. The respondent countered by alleging that the 2nd applicant had removed company records, including original share certificates, and manipulated them. The respondent claimed that all investments were properly recorded in the company's accounts, which were later tampered with by the 2nd applicant. The respondent produced evidence of 50% membership in the company and accused the applicants of fabricating documents to support their claims. The respondent maintained eligibility to file a petition under sections 397 and 398 of the Companies Act.

3. The main issue revolved around the dispute over the respondent's shareholding and eligibility to file the petition. The respondent argued that as a subscriber to the Memorandum of Association and a member of the company, he had the right to file the petition. The court noted the lack of evidence regarding the removal of the petitioner as a director and non-payment of share application money by the 2nd applicant, indicating potential fraudulent activities.

4. The court's findings highlighted the lack of demand notice served on the petitioner to pay the call money and the failure of the applicants to reply to the petitioner's letter. The court emphasized the need for a detailed inquiry into the facts of the matter before dismissing the petition at the threshold. The court dismissed the application, citing the inability to adjudicate factual issues as a preliminary matter.

5. Overall, the judgment delved into the complexities of shareholding disputes, fraudulent activities, and procedural irregularities within the company. The court emphasized the importance of evidence and proper legal procedures in resolving such disputes, ultimately leading to the dismissal of the application and setting timelines for further legal actions by the parties involved.