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TMI Blog1995 (3) TMI 328X X X X Extracts X X X X X X X X Extracts X X X X ..... under the Indian Companies Act, 1913 as a public company. The company was converted into a private limited company in the month of May 1978. The authorised capital of the company in the month of September 1972 was Rs. 2 lakhs comprised of 20,000 shares of Rs. 10 each. The amount of paid-up capital was Rs. 1,22,060 comprised of 12,206 shares which were fully paid up. It is alleged that on 3-9-1972, the remaining shares, i.e., 7,794 shares were further allotted to respondent Nos. 2 to 10 and, thus, the paid up capital of the company became Rs. 2 lakhs. The capital of the company was further increased from Rs. 2 lakhs to Rs. 5 lakhs comprised of 50,000 shares of Rs. 10 each in the annual general meeting held on 29-9-1973. Thereafter, on 30-1- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld not in law participate in the annual general meeting and that the remaining five members did not constitute the quorum as provided under article 81 of the articles of association. The increase of authorised capital on 29-9-1973 from Rs. 2 lakhs to Rs. 5 lakhs was illegal, being in breach of article 13 of the articles of association. The share capital could be increased only by extraordinary resolution, i.e., special resolution but the same was passed as ordinary resolution; that securing majority illegally, the respondents on 30-1-1974 issued 4,247 shares to the follow-ing persons: Sl No. Name No. of Shares Sl No. Name No. of Shares 1. Roshan Lal Mehra 100 5. Smt. Suhag Rani 500 2. Ram Das 667 6. Gautam Raj Mehra 250 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nes made in the petition. On the basis of pleadings, following issues were framed and the parties led their evidence : "1.Whether the petition is barred by limitation? (OPR) 2.Whether the petitioner can challenge the allotment of shares after respondent-company has changed its status to a private limited company from public limited company? (OPR) 3.Whether the petitioner is estopped from challenging the allotment of shares as stated in paras 3 and 4 of preliminary objections of written statement? (OPR) 4.Whether the allotment of 7,749 shares and 4,247 shares suffer from any legal infirmity, if so, what is its effect? (OPR) 5.Whether the increase of capital from Rs. 2 lakhs to Rs. 5 lakhs suffers from any legal infirmity? If so, what i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lectricity Board v. T.P. Kunhaliumma AIR 1977 SC 282 to contend that the limitation under these circumstances would be three years. The Apex Court in T.P. Kunhaliumma's case (supra) held that article 137 of the Limitation Act, 1963 applies to every petition or application filed under any Act. Petition in that case under consideration was under section 16(3) of the Tele- graph Act, 1885 claiming enhanced compensation and it was held that the said petition fell within the scope of article 137 of the Limitation Act and was barred by time. 5. The counsel for the respondents further placed strong reliance upon a judgment of Delhi High Court in Anil Gupta v. Delhi Cloth & General Mills Co. Ltd. [1983] 54 Comp. Cas. 301, where a learned Single Ju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns contemplated by or under the Code of Civil Procedure. The petition in the present case was to the District Judge as a court. The petition was one contemplated by the Telegraph Act for judicial decision. The petition is an application falling within the scope of article 137 of the 1963 Limitation Act' In the present case the transfers were effected on 11th August, 1973, in respect of 1,000 shares, and on 27th September, 1974, in respect of 1,500 shares. An application under section 155 of the Companies Act could be filed within three years of the said transfers. Prima facie it appears that the present petition which was filed on 23rd November, 1978, is barred by time." (p. 308) In the present case as well, the shares were transferred in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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