9911796707
|
Home
Issues Involved
1. Maintainability of the petition. 2. Validity and consideration of the sale of shares to respondents Nos. 2 to 9. 3. Contravention of section 91B of the Indian Companies Act, 1913, by the resolution dated 2nd September 1952. 4. Bona fide status of respondents Nos. 10 to 13 as transferees for consideration. 5. Relief sought by the petitioner. Issue-wise Detailed Analysis Issue No. 1: Maintainability of the Petition The respondents contended that the petition was not maintainable under section 155 of the Companies Act, 1956, as it provided a summary remedy suitable only for non-controversial matters. They referenced previous decisions of the court which held that serious disputes should be adjudicated in a civil court. However, the court found that the facts of this case were comparatively simpler and could be suitably disposed of under section 155. The court exercised its discretion and decided that the petition was maintainable. This issue was decided against the respondents. Issue No. 2: Validity and Consideration of the Sale of Shares to Respondents Nos. 2 to 9 The court examined whether the sale of 780 shares to respondents Nos. 2 to 9 was valid and for consideration. Evidence revealed that no consideration was received by the People's Insurance Company for the shares. S. Sardul Singh Caveeshar, the managing director, admitted that the shares were transferred benami to his nominees without any consideration. The respondents Nos. 2 to 6 and 8 did not appear as witnesses to support their claim of having purchased the shares for consideration. The court concluded that the sale was neither valid nor for consideration and struck down the transaction. This issue was decided in favor of the petitioner. Issue No. 3: Contravention of Section 91B of the Indian Companies Act, 1913 The petitioner contended that the resolution dated 2nd September 1952, confirming the sale, was in contravention of section 91B of the Indian Companies Act, 1913, as the directors involved were directly interested in the transaction, thus rendering the meeting without the requisite quorum. However, the court found it unnecessary to decide this issue in light of its findings on issues Nos. 2 and 4. Even if this issue were decided in favor of the respondents, the petition would still succeed. Issue No. 4: Bona Fide Status of Respondents Nos. 10 to 13 as Transferees for Consideration The court examined whether respondents Nos. 10 to 13 were bona fide transferees for consideration. The evidence presented by these respondents was unreliable and failed to demonstrate that they had purchased the shares in good faith and for consideration. The court found that the transactions were colorable and fraudulent, and the respondents did not provide convincing evidence to support their claims. This issue was decided in favor of the petitioner. Issue No. 5: Relief The court ordered the rectification of the register of members of Messrs. C.R.E. Wood & Company Limited, directing that the names of respondents Nos. 10 to 13 be removed and the name of the People's Insurance Company Limited (in liquidation) be restored with effect from the date of the alleged transfer of the 780 shares. The court also ordered respondents Nos. 2 to 9 and respondents Nos. 10 to 13 to refund any dividends received on these shares to the petitioner-company. The costs of the petition were assessed at Rs. 500, to be borne by respondents Nos. 1 to 6 and 8 and respondents Nos. 10 to 13. Conclusion The petition of the official liquidator was successful. The court ordered the rectification of the register of members, removal of the names of respondents Nos. 10 to 13, and restoration of the name of the People's Insurance Company Limited. The respondents were also directed to refund any received dividends and bear the costs of the petition.
|
