2017 (6) TMI 958 - Tri - Companies Law

Maintainability of the Petition on the ground that the Petitioner was not holding a single share on the date when the Petition was filed in the year 2013 - Held that - On examining of the facts along with the case laws it is evident that the Petitioner has not proved to the hilt the ownership or the possession on the requisite number of shareholding on the date of filing of the impugned Petition. The law is unambiguous that if the Petitioner had failed to demonstrate the requisite number of shareholding as prescribed under the law then debarred by operation of law to pursue such Petition. Elders of the family have taken a decision way back in the year 1990/1991 for the welfare of the members, hence the heir-successors are duty bound to honour the decision of the elders. In the present case hereby hold that in the absence of undisputedly establishing the holding of shares of R-1 Company with the Petitioner on the date when the Petition was filed, he is not entitled to pursue the Petition in question being not maintainable on account of non-fulfilment of condition precedent.

Summary

Issues Involved:
1. Maintainability of the Petition.
2. Authenticity and binding nature of the Family Settlement.
3. Compliance with statutory requirements for share transfer.
4. Petitioner's locus standi and shareholding status.

Issue-wise Detailed Analysis:

1. Maintainability of the Petition:
The Respondent challenged the maintainability of the Petition on the grounds that the Petitioner was not a shareholder on the date of filing the Petition in 2013. The Petitioner argued that he was an original director and held 21 equity shares constituting 50% shareholding at the time of incorporation. The Respondent countered that the Petitioner had transferred his shares as part of a Family Settlement in 1990 and ceased to have any interest in the company. The Tribunal found that the Petitioner failed to demonstrate ownership of the requisite number of shares on the date of filing the Petition, thus the Petition was not maintainable.

2. Authenticity and Binding Nature of the Family Settlement:
The Respondent presented a Family Settlement dated January 8, 1991, which the Petitioner allegedly wrote in his own handwriting, relinquishing his interest in the company in exchange for certain immovable properties. The Petitioner denied being a signatory to the Family Settlement and challenged its authenticity. However, the Tribunal found sufficient evidence, including the handwriting expert's report and corroborative documents, to establish the authenticity and binding nature of the Family Settlement. The Tribunal noted that the Petitioner had acted upon other terms of the Settlement, thus he was estopped from selectively challenging it.

3. Compliance with Statutory Requirements for Share Transfer:
The Petitioner argued that the share transfer was invalid as it did not comply with Section 108 of the Companies Act, 1956, which requires a proper Instrument of Transfer. The Respondent countered that the shares were transferred as part of the Family Settlement and recorded in the company's Register of Members. The Tribunal found that the Petitioner had not objected to the rectification of the Register of Members earlier and had resigned as a director in 1990. The Tribunal concluded that the share transfer was valid and the Petitioner's objections were ill-founded.

4. Petitioner's Locus Standi and Shareholding Status:
The Petitioner claimed to hold 50% shareholding in the company, but the Respondent provided evidence of share transfer and resignation from directorship in 1990. The Tribunal found that the Petitioner had failed to prove his shareholding status on the date of filing the Petition. The Tribunal emphasized that only real stakeholders should be allowed to indulge in the affairs of the company and that the Petitioner had not fulfilled the qualification under Section 399 of the Companies Act, 1956.

Conclusion:
The Tribunal dismissed the Petition (C.P. No. 93/2013) in limine, holding that the Petitioner did not establish the requisite shareholding and thus lacked the locus standi to maintain the Petition. The Respondent's Application (C.A. No. 266/2013) challenging the maintainability of the Petition was allowed. The Tribunal directed the Registry to consign the pleadings to the record.