2017 (7) TMI 372 - Tri - Companies Law

Maintainability of the petition - whether the petitioner was not competent u/s. 399 of the old Act to file this petition because not having requisite number of shares as mandatory on the date of filing of the petition i.e. 10-09-2014? - Held that - The entire issue in this case revolved around the corroborative evidences and surrounding circumstances. After the exit of the Petitioner lot of water had flowed under the bridge. On number of occasions the Petitioner had expressed in different letters to various authorities his non-involvement in the affairs of the company. Once he had already exited then after lapse of number of years it is not justifiable to rake up this issue. The Petitioner undisputedly remained silent for number of years. Such an attitude has not been approved by the Hon ble courts as held in the case of Pearson Education Inc. (2004 (7) TMI 667 - COMPANY LAW BOARD NEW DELHI). The existence of this settlement among the rival parties is a vital piece of evidence because thereafter number of steps were taken by the Rl company and other Respondents. After an inordinate delay of more than six years it is not possible for the Respondents to reverse the cycle of events. Something already done cannot be undone merely on the basis of bald claims. Certain events such as signing of balance sheet by the respective parties submission of information before the ROC an Arbitration judgment dated 08-07-2009 acknowledging the final settlement dated 15-10-2008 are such examples of fait accompli of the settlement. Thus the Petitioner was not holding the requisite number of shares on the date of filing of the Petition therefore failed to accomplish the legal requirement prescribed under section 399 of the old Act. Legally the Petitioner is not entitled to file this Petition. It is hereby held that the Petition is not maintainable hence dismissed in-limine.

Issues Involved:
1. Maintainability of the petition under Section 399 of the old Act.
2. Alleged improper share allotment and transfer.
3. Claim for rectification of the register of members.
4. Demand for refund and settlement of the petitioner's investment.
5. Allegations of delay and laches in filing the petition.

Issue-wise Detailed Analysis:

1. Maintainability of the petition under Section 399 of the old Act:
The respondent objected to the maintainability of the petition, arguing that the petitioner did not hold the requisite number of shares on the date of filing the petition (10-09-2014). The petitioner allegedly transferred his entire shareholding on 15-10-2008, thus lacking the locus standi to file the petition. The tribunal concluded that the petitioner was not holding the requisite number of shares on the date of filing the petition, thereby failing to meet the legal requirement under Section 399 of the old Act. Consequently, the petition was dismissed as not maintainable.

2. Alleged improper share allotment and transfer:
The petitioner claimed that fresh shares were allotted without his knowledge and that his shareholding was transferred without executing a "share transfer deed" or receiving any consideration. The respondent countered, stating that the petitioner had voluntarily transferred his shares and received consideration. The tribunal noted that evidence, including bank transactions and settlement documents, supported the respondent's claim of voluntary transfer and receipt of consideration by the petitioner.

3. Claim for rectification of the register of members:
The petitioner sought rectification of the register of members by canceling the transfer of 75,000 equity shares. However, the tribunal found that the petitioner had transferred his shares voluntarily and received consideration, thus invalidating his claim for rectification. The tribunal emphasized that compliance with Section 108 of the old Act, which mandates proper transfer deeds for share transfers, was not established by the petitioner.

4. Demand for refund and settlement of the petitioner's investment:
The petitioner demanded a refund of his investment, claiming that his capital contribution was treated as an unsecured loan. The respondent explained that the petitioner's investment was adjusted against the allotment of shares, and the remaining amount was settled through a final settlement on 15-10-2008. The tribunal found that the petitioner had received the settlement amount, corroborated by bank records, and had resigned from the company on the same date. The tribunal concluded that the petitioner's demand for a refund was not justified.

5. Allegations of delay and laches in filing the petition:
The respondent argued that the petition was vitiated by delay and laches, as the petitioner filed the petition six years after his resignation. The tribunal agreed, noting that the petitioner remained silent for several years and only raised the issue after a significant delay. The tribunal cited case laws emphasizing that undue delay in seeking relief could lead to the dismissal of the petition.

Conclusion:
The tribunal dismissed the petition in-limine, holding that the petitioner did not meet the legal requirement under Section 399 of the old Act, lacked the requisite number of shares on the date of filing the petition, and failed to establish his claims regarding improper share allotment and transfer. The tribunal also noted the undue delay in filing the petition, further justifying its dismissal. No order as to costs was made, and the case was consigned to records.

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