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TMI Blog1998 (11) TMI 487X X X X Extracts X X X X X X X X Extracts X X X X ..... fer agent, however, the said resolution was not given effect to and no formal agreement or MoU was executed in respect of the said resolution. After the assignment of AMI was completed, the appellant asked the said firm to return all the unused stationery and other records of the company which were in their possession as registrar of public issue but the same were not returned. Consequently, a complaint had to be lodged with the Securities and Exchange Board of India (SEBI) against AMI and a civil suit was also filed before the civil Court at Mumbai seeking appropriate orders for obtaining back the documents and record from the said firm. At this stage, the respondent, Rajendra Prasad Gupta (the respondent in short), alleging consent of 113 persons filed a petition under section 397/398 of the Act before the Board alleging certain act of oppression and mismanagement against the appellant and its directors. The said company petition was registered as C.P. No. 92 of 1997. The appellant which was arrayed as respondent in the said petition filed preliminary objection before the Board, inter alia, raising objection that the persons filing the petition are not members of the company an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paid all calls and other sums due on their shareholding or the petitioners constitute not less than one-tenth of the number of members or 100 members whichever is less. 5. While deciding the preliminary objection, the Board took the view that the respondent claimed to have purchased the shares from the market and has given evidence to show that they possessed the said share certificates issued in their names by the share transfer agent of the company, namely, AMI, and as per the provision of section 84, as a share certificate is prime facie evidence of title, consequently, even if the names of all such shareholders, who have filed the petition, were not recorded in the register of members under section 164 of the Act, they shall, prima facie, on the strength of their share certificates, be treated to be sharehold-ers of the company. As regards the preliminary objection that AMI were not authorised to act as share transfer agent of the company or to sell the shares, the Board held that from the copy of the resolution, dated 24-2-1997 as the board of directors had approved the appointment of AMI as share transfer agent of the appellant-company, the onus of proving that this r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce until the persons who had given their consent to the filing of the petition, got their names entered in the register of members of the company in appropriate proceeding. The learned counsel has contended that the Board has proceeded on conjec-tures, surmises and assumption, rather than going into the material placed before it by means of original documents. It has also not considered the objection that the signatures of those 12 persons who have filed their affidavits and who are admittedly registered as shareholders do not tally and consequently, the signatures in the affidavits have also been forged. It was further contended that the Board ought to have rejected the reply to the preliminary objection submitted by Shri Manoj Kumar Agarwal on behalf of the Sikkim Investment Ltd., as the said person was incompetent to file the reply. On the other hand, learned counsel for the respondent has supported the order passed by the Board and the reasons given therein. He has contended that the Board was justified in holding that the AMI was not only the registrar to the public issue of the company but also its share transfer agent. The respondent had filed the copy of the resolution of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he filing of the petition are alleged to be holding 50 shares whereas the marketable lot was of 100 shares. Conse-quently, the lot could not be split up, neither were AMI Computers authorised to split up shares. Allegations have been made that out of the alleged 4.5 lakh shares allotted to Sikkim Investment Limited 2.5 lakh shares were issued as fully paid-up and 2 lakhs have been subscribed under the right issue which are partly paid-up although the calls regarding the same have been made by the appellant-company. Similarly, one Fauzia Shiraji, who holds 500 shares which are partly paid-up has de-faulted in paying the allotment call money due to the said shares and consequently, could not have given a valid consent for instituting the petition. Allegations have been made that the affidavit filed by the contesting parties do not bear the signature of the said persons and there is variance in the signature contained in the affidavits and the records of the company. It is apparent that complicated questions of law and facts arise even for determining the question of maintainability of the petition under section 399. The Board has referred to its decision in the case of Satish Chand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rned counsel for the parties had in support of their respective cases referred to certain decisions. However, as the matter is being sent back to the Board with certain directions it would not be proper for this court to express any opinion on the merits of the case and also on the decisions which have been cited by the counsel for the parties. 11. As a result, this appeal is partly allowed and the order, dated 3-3-1998, passed by the Board is hereby set aside with the direction that the CLB would hear the petition on merits including the question regarding the maintainability of the petition afresh on the basis of the documentary evidence and the material placed by the parties. After hearing the petition, if the Board came to the conclusion that the petitioner satisfies the requirements of section 399, it shall proceed to pass orders on the maintainability of the petition as well as on other issues which arise out of the facts of the present case. The appellant has not filed a detailed reply to the petition but only raised a preliminary objection. As the matter has got sufficiently delayed it is desirable to direct the appellant to file its reply to the petition under section ..... X X X X Extracts X X X X X X X X Extracts X X X X
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