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2018 (12) TMI 511 - AT - Companies LawOppression of mismanagement - rightful holder of shares - divorce between husband and wife - 200 shares of 1st respondent were transferred from the name of the appellant, on the basis of transfer document executed by the appellant and on the basis of family settlement dated 29th June, 2000 - as alleged family members of the appellant s in laws have not only transferred her 200 shares from the name of the appellant in the name of 3rd respondent but dishonestly and fraudulently transferred a substantial part of land owned by 1st respondent to defeat the claim of appellant over the said property being the holder of 20% shares Held that - Shares have been transferred without valid instrument and no attempt has been made to get the transfer deed signed from the appellant. It also shows that due diligence has not been done. To participate/attend the meeting of a company is the prerogative of the shareholder. However, the company (here 1st respondent) is duty bound to send notice of every meeting to the shareholder, therefore, the appellant had a right to receive notice of each and every meeting while she was reflected as shareholder in the company records. Admittedly at last till 2013 even as per Respondents, Appellant was shareholder till 2013, but even till then No notice sent is shown. As established that the shares in the name of appellant have been transferred in the name of 3rd respondent, therefore, the impugned order dated 14.11.2017 passed by the NCLT, Ahmedabad is set aside and the appellant is found to be rightful holder of 200 shares and the shares transferred in the name of 3rd respondent are held illegal. Further we direct the 1st respondent to rectify the register so as to restore the appellant as holder of 200 shares in the 1st respondent company. We set aside the impugned order dated 14.11.2017 of the Tribunal and hold that the appellant is rightful holder of 200 shares. As we hold that the appellant is holder of 200 shares (20% of the capital at that time), it is in the fitness of things that the Tribunal decides the other issues raised for which in Impugned Order Points 6 to 8 were framed, on merits. Therefore, the matter is remanded back to the NCLT to decide the other issues raised by the appellant in Company Petition. The parties are directed to appear before the National Company Law Tribunal, Ahmedabad Bench, Ahmedabad on 1st November, 2018.
Issues Involved:
1. Limitation period for filing the Company Petition. 2. Validity of the transfer of shares. 3. Allegations of oppression and mismanagement. 4. Validity of the MOU and its impact on share transfer. 5. Non-receipt of meeting notices and other corporate communications. 6. Increase in authorized capital and further allotment of shares. Issue-wise Detailed Analysis: 1. Limitation Period for Filing the Company Petition: The appellant argued that the Tribunal erred in calculating the limitation period for filing the Company Petition under Section 59 of the Companies Act, 2013, asserting that the petition was filed within three years of discovering the illegal transfer of shares. The Tribunal dismissed the petition on grounds of delay and laches, holding that the period of limitation should commence from the date when the documents were uploaded on the ROC website, i.e., 22.10.2013. The appellant contended that she only became aware of the illegal transfer on 10.2.2016 and filed the petition on 24.11.2016. The Appellate Tribunal observed that the appellant had written to the 1st respondent about her shares but received no response, indicating a lack of transparency on the part of the 1st respondent. 2. Validity of the Transfer of Shares: The appellant claimed that her 200 shares were illegally transferred to the 3rd respondent without her consent and without a valid transfer deed. The Tribunal noted that no transfer deed carrying the appellant's signature was produced before it or the Appellate Tribunal. The Appellate Tribunal found that the shares were transferred without a valid instrument and that the respondents had not made any attempt to get the transfer deed signed from the appellant. The Tribunal also observed that the MOU, which was claimed to be the basis for the transfer, was not a concluded contract and could not be enforced. 3. Allegations of Oppression and Mismanagement: The appellant alleged that the respondents had engaged in acts of oppression and mismanagement, including holding illegal board meetings without notice, increasing the authorized capital without proper procedure, and illegally allotting shares to the 3rd respondent. The Tribunal did not address these issues in detail, as it dismissed the petition on grounds of delay. The Appellate Tribunal remanded the matter back to the NCLT to decide these issues on merits. 4. Validity of the MOU and Its Impact on Share Transfer: The appellant argued that the MOU executed between her and the 2nd respondent was not complied with and was not a concluded contract. The Tribunal noted that the MOU was not made part of the joint application for divorce and was not considered by the District Judge, Indore. The Appellate Tribunal observed that the MOU was a rough, unsigned document and could not be treated as a valid agreement for the transfer of shares. 5. Non-receipt of Meeting Notices and Other Corporate Communications: The appellant claimed that she did not receive any annual reports or notices of AGM/EOGM, which prevented her from being aware of the company's status and the transfer of her shares. The Tribunal observed that the company (1st respondent) was duty-bound to send notices of every meeting to the shareholder. The Appellate Tribunal noted that the appellant was reflected as a shareholder in the company records until at least 2013, but no notice of meetings was sent to her. 6. Increase in Authorized Capital and Further Allotment of Shares: The appellant challenged the resolution passed during the EOGM dated 27.8.2015 to increase the authorized capital of the 1st respondent from ?1,00,000 to ?10,00,000 and the subsequent allotment of 9000 shares to the 6th respondent. The Tribunal did not give its findings on these issues due to the dismissal of the petition on grounds of delay. The Appellate Tribunal remanded the matter back to the NCLT to decide these issues on merits. Conclusion: The Appellate Tribunal set aside the impugned order dated 14.11.2017 passed by the NCLT, Ahmedabad, and held that the appellant is the rightful holder of 200 shares. The Tribunal directed the 1st respondent to rectify the register to restore the appellant as the holder of 200 shares. The matter was remanded back to the NCLT to decide the other issues raised by the appellant in the Company Petition on merits. The parties were directed to appear before the NCLT, Ahmedabad, on 1st November 2018. No order as to costs was made.
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