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2020 (2) TMI 918 - HC - Companies LawBeneficial interest in the shares held by JFL/Defendant No.3 - subscription of shares on discharge of the obligations arising under agreement - grant of Permanent Injunction restraining Defendant No.2 either himself or through Defendant No.3 from in any manner interfering with the peaceful possession of the Plaintiff in the property - Mandatory Injunction directing Defendant No.3 to submit its declaration under Section 89 of the Companies Act 2013. HELD THAT - Section 89 of the 2013 Act, which was not in force on 7th August, 2013 when beneficial interest in favour of plaintiff is claimed to be created in the shares of ATPL held by JFL, is pari materia to Section 187C of the 1956 Act save for a change of language in Section 89(8) from the wording of Section 187C(6). While Section 187C(6) provided consequences of non declaration under the forgoing provisions and which I have hereinabove interpreted as including declaration by the company under Section 187C(4), Section 89(8) provides consequences of non-declaration by the beneficial owner only. I have considered, whether on default by company, in this case ATPL, to file return under Section 89(6) and on the plea of the plaintiff of having made a declaration, the plaintiff is entitled to maintain the suit, but am unable to hold so. The records required to be maintained by a company qua beneficial interest in shares, are public records, open to inspection by all and the conduct of the plaintiff, of inspite of such declaration being not made, keeping quite till now, speaks volumes of natural course of human conduct. The plaintiff had option under Section 59 of the 2013 Act to apply for rectification of register of members, but failed to exercise the said option. The claim of beneficial ownership of shares of ATPL, even otherwise stands on the edifice of beneficial ownership of HRLIPL and which is unsustainable under Section 187C(6). The right of the plaintiff even if any, as beneficial owner of shares in the name of Samta Khinda in HRLIPL or shares in the name of JFL in ATPL could be only to exercise rights as a shareholder and not otherwise. It is not the plea of the plaintiff that the plaintiff as shareholder exercised any such rights or even made any attempt to exercise such rights. On the contrary this suit is only to retain possession of immovable property of ATPL. The plaintiff, even as beneficial owner of shares of ATPL in name of JFL, is not entitled to hold possession of immovable property of ATPL, unless permitted by resolution of Board of Director of ATPL. Though the plaintiff pleads such resolution but has not filed the same. In any case, this suit is not for declaration of existence of any such resolution of the Board of Directors of ATPL. I have already hereinabove while describing the documents dated 28th September, 2011 and 7th August, 2013, expressed doubts as to the authenticity thereof. The non-compliance of the statutory provisions which bar the plaintiff from claiming any rights as claimed in the present suit, only confirm the said doubts. I am therefore unable to find the plaintiff, on the pleaded case, to have a cause of action for the reliefs claimed and rather find the suit as aforesaid to be barred by law - Suit dismissed.
Issues Involved:
1. Validity of the cause of action for initiating the suit. 2. Plaintiff's claim of beneficial ownership in shares of companies. 3. Compliance with statutory provisions under the Companies Act, 1956 and 2013. 4. Legitimacy of the plaintiff's possession of the subject farmhouse. 5. Authenticity and enforceability of the agreements cited by the plaintiff. Issue-wise Detailed Analysis: 1. Validity of the Cause of Action for Initiating the Suit: The plaintiff claims that the cause of action arose when the defendant filed complaints against him, challenging his possession of the subject farmhouse. The court questioned how the initiation of a complaint under Section 452 of the Companies Act, 2013 could furnish a cause of action for another legal proceeding. The court concluded that the plaintiff should contest the legal proceedings initiated by the defendant rather than commencing another legal proceeding. The suit was found to be an attempt to scuttle the proceedings in the complaint under Section 452 of the 2013 Act. 2. Plaintiff's Claim of Beneficial Ownership in Shares of Companies: The plaintiff claimed beneficial ownership of shares in HRLIPL and ATPL. The court noted that the plaintiff's claim was based on agreements where the plaintiff retained beneficial interest in shares transferred to Samta Khinda. The court examined the Settlement Agreement dated 7th August 2013 and the Share Transfer Agreement dated 28th September 2011, which the plaintiff cited to support his claims. However, the court expressed doubts about the authenticity of these documents, noting that the first three sheets of the agreements did not bear any signatures, and only the last sheet, in a different font, purported to bear signatures. 3. Compliance with Statutory Provisions under the Companies Act, 1956 and 2013: The plaintiff claimed to have made declarations under Section 187C of the Companies Act, 1956, and Section 89 of the Companies Act, 2013, regarding his beneficial interest in shares. The court inquired about proof of such declarations and whether HRLIPL had filed the required return with the Registrar of Companies (ROC). The plaintiff had no proof of having made such declarations, and there was no evidence that HRLIPL complied with Section 187C(4). The court emphasized that the plaintiff could not enforce any rights due to non-compliance with the statutory provisions, as Section 187C(6) barred enforcement by the beneficial owner if the required declaration was not made. 4. Legitimacy of the Plaintiff's Possession of the Subject Farmhouse: The plaintiff claimed to be the beneficial owner of the subject farmhouse and sought to retain possession. The court noted that the plaintiff, even as a beneficial owner of shares in ATPL, was not entitled to hold possession of immovable property of ATPL unless permitted by a resolution of the Board of Directors of ATPL. The plaintiff had not filed any such resolution. The court found the suit to be an attempt to retain possession of the farmhouse without a legitimate basis. 5. Authenticity and Enforceability of the Agreements Cited by the Plaintiff: The court expressed doubts about the authenticity of the agreements dated 28th September 2011 and 7th August 2013, which the plaintiff cited to support his claims. The court noted that the agreements were not signed on the first three sheets, and only the last sheet, in a different font, purported to bear signatures. The court concluded that the plaintiff had not made out a case required to be determined by the court and found the suit to be barred by law. Conclusion: The court dismissed the suit, finding that the plaintiff had not established a valid cause of action, had not complied with statutory provisions, and had not provided sufficient evidence to support his claims of beneficial ownership and possession of the subject farmhouse. The court also expressed doubts about the authenticity of the agreements cited by the plaintiff and emphasized the importance of strict compliance with statutory provisions in cases involving beneficial ownership of shares.
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