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TMI Blog2000 (11) TMI 1125X X X X Extracts X X X X X X X X Extracts X X X X ..... pondent-company. In the notice for the sixth annual general meeting (AGM) of the shareholders of the company held on 30-9-1999, the following was included as item No. 8 of the agenda: "To consider and, if thought fit, to pass, with or without modification, the following resolution as a special resolution : Resolved that pursuant to the recommendation of the board of directors and article 133 of the articles of association of the company, and part of the sums standing to the credit of the company s general reserve be capitalised and such be applied in terms of articles 133 and 134 of the articles of association of the company, for paying up in full at par equity shares of Rs. 10 each in the capital of the company to be allotted and distr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... olved that equity shares be allotted and distributed as fully paid-up bonus shares to the members holding equity shares as per the register of members as on February 1, 2000, who are the holders as on February 1, 2000 of the existing fully paid equity shares of the company, in the ratio of two bonus shares for one existing fully paid-up equity share held by the members as on February 1, 2000, upon the footing that they become entitled to such new equity shares as capital and not as income." In the meanwhile, the appellant had sold all his shares in the respondent-company to one Rajesh Naik and his wife, Sapna Kishore, on 25-10-1999, and the transfer deeds were executed on 30-10-1999. When the appellant did not receive any bonus share cert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the transferees. Therefore, the appellant s name was not appearing in the register of members on 1-2-2000, which was the cut-off date. The resolution passed by the AGM on 30-9-1999, did not state that the shareholders whose names appeared in the register of equity shareholders as on the date of AGM were entitled to bonus shares. Hence, the appellant had no right to get the bonus shares and no right of the appellant to get bonus shares had crystallised on 30-9-1999. It was contended by the respondent that the appellant s petition under section 113(3) of the Companies Act was not maintainable. 5. After considering in detail the various contentions of the parties, the CLB upheld the stand of the respondent and dismissed the appellant s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itlement for bonus shares was available only to those who held equity shares of the company on a particular date to be determined by the board of directors of the company after the resolution was passed by the AGM. The date so determined by the board of directors was 1-2-2000. When the resolution and the explanatory statement are read together, there is no scope for any ambiguity or confusion. When the resolution clearly stated that bonus shares would be allotted to the shareholders holding equity shares as per the register of equity shareholders as on a date determined by the board of directors, the reference in the explanatory statement to existing shareholders could be understood only as shareholders existing as on the date determined ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... board of directors of the company. If the explanatory statement is read along with the resolution, there is neither ambiguity nor confusion nor contradiction nor inconsistency with regard to the members entitled to bonus shares. It cannot be said that the explanatory statement was tricky or misleading or lacking in material particulars. In this context, it has to be noted that, as pointed in the impugned order by the CLB, neither in the petition filed before the CLB nor in the oral submissions, the appellant had raised any plea that the notice for the annual general meeting was tricky or misleading or lacking in material particulars or that the appellant was misled by the explanatory statement. On the other hand, the appellant s case befor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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