2018 (2) TMI 1884 - Tri - Companies Law

Rectification in Register of the Members of the Rl Company in respect of Allotment of Shares that took place on 19.06.1996 i.e. after a period of 21 years - HELD THAT - It is a known fact that during 1996, the basis of allotment was made in consultation with Representative of Stock Exchange, Public Representative of SEBI, Representative of Lead Manager and RTI therefore, questioning the allotment took place in 1996 after 21 years by the petitioner company as illegal, malafide etc., is not tenable, not supported by any facts/documents. The Bench is inclined to accept the submissions of the Respondents that the instant petition is time barred as per Limitation Act 1963 and is not eligible to file the instant petition however, instead of dismissing the matter on this ground alone, the Bench felt to consider other major allegation of the petitioner. The respondents have also correctly pointed out that the petitioner claims to be a Power of Attorney Holder of all his 146 applicants, has failed to submit even a single duly signed POA given by any of the applicants. Therefore, the petitioner is not entitled to file this instant petition. Though the petitioner sought to invoke Section 59 of the Companies Act 2013, the alleged fraud, fake, falsification of the Register of Members according to the petitioner was in the year 1996 therefore, Section 111 of Companies Act 2013 is applicable. Petition dismissed.

Summary

Issues:
1. Rectification of Register of Members for 87600 fully paid shares under Companies Act, 2013.
2. Allegations of limitation, abuse of process of law, and lack of documentary evidence.
3. Ownership and transfer of shares, open offer regulations, and lack of action by applicants.
4. Validity of allotment in 1996, delay in filing petition, and legal basis for filing.
5. Maintainability of petition under Companies Act, 2013 and lack of proper Power of Attorney.

Analysis:
1. The Company Petition sought rectification of the Register of Members for 87600 shares under the Companies Act, 2013. The Petitioner requested reinstatement of 146 persons as registered holders and recognition as the Constituted Attorney of PAIPL, the POA holder of the said shares.

2. The Respondents vehemently denied the allegations, arguing the petition was time-barred, an abuse of process, and lacked documentary evidence. They cited a previous judgment upholding that a member cannot challenge events predating their membership.

3. Respondents questioned the delay in action by the applicants, ownership and transfer of shares triggering open offer regulations, and lack of participation in previous opportunities. They emphasized the legality of allotment in 1996 and creation of third-party rights.

4. The Bench noted the delay in filing the petition, lack of proper documentation, and absence of a valid Power of Attorney. They highlighted the petition's lack of merit, legality, and maintainability under the Companies Act, 2013.

5. The petition's dismissal was based on the lack of proper POA execution, failure to meet the definition of members, and absence of merit in the prayers sought. The Bench rejected all prayers and dismissed the Company Petition due to its lack of eligibility and merit.

This detailed analysis covers the issues raised in the judgment, addressing each point comprehensively based on the legal arguments and submissions presented during the proceedings.