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TMI Blog2009 (10) TMI 532X X X X Extracts X X X X X X X X Extracts X X X X ..... ike the first appellant herein, who is an outsider to the question. Thus the petition filed by the first appellant herein along with other appellants did not merit examination before the Company Law Board within the scope of a petition under section 111 of the Act and the Company Law Board has rightly dismissed such a petition. - COMPA No 12 of 2009 - - - Dated:- 20-10-2009 - D.V. SHYLENDRA KUMAR AND L. NARAYANA SWAMY, JJ. C.M. Poonacha and Lexplexus for the Appellant Vivekananda and Madhukar Deshpande for the Respondent JUDGMENT D.V. Shylendra Kumar, J. This is an appeal under section 10F of the Companies Act, 1956 (for short "the Act") by persons, one amongst whom incidentally happens to be a director ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ership in shares was still in the names of legal heirs after the demise of the person and the persons who got the shares are neither owners nor derive title in the shares transferred and therefore the register should be necessarily corrected, even in section 111(4) jurisdiction. 4. The appellants, who were the petitioners in the company petition, claim that they had ownership of the requisite number of shares being members of the first respondent-company and are entitled to maintain a petition under section 111 of the Act, but the Company Law Board on an erroneous understanding of the facts and the law and being of the opinion that the ownership in the shares had changed hands from the erstwhile owner to the present stakeholders even pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the articles of association of the company, is not a valid transfer and on such premise the register was required to be rectified to delete the names of the respondents from the register showing the members of the company and in their place substitute the names of legal heirs of the deceased transferor as rightful owners of the shares, etc. 7. Notices had been issued at the admission stage to the respondents and some of the respondents are served, and represented. The transferees, present owners of the shares, i.e., respondent No. 2 is represented by Sri Vivekananda and respondents Nos. 4 and 5 are represented by Sri Madhukar Deshpande, learned counsel. While the first respondent-company as also the sixth respondent legal heir of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e transfer, cannot turn around now to contend the contrary that a pre-emptive right of an existing member of the company is violated or affected by the transfer. 10. Now, Sri Poonacha, learned counsel for the appellants, would join issue on this aspect contending that mere fact that the first appellant had acted as part of the management to transfer the shares in the year 2008 does not necessarily mean that his rights, as a shareholder, more so a pre-emptive right for acquiring shares in the first instance vis-a-vis an outsider, is not in any way affected, that right the Company Law Board has failed to recognise on other consideration and therefore the order of the Company Law Board, nevertheless, merits examination on the opinion tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he erstwhile owner, even before the company had recognised the transfer, is not one which perhaps comes within the jurisdiction of the Company Law Board, though Sri Poonacha would submit to the contrary and drawing sustenance for his submission from a Full Bench decision of the Delhi High Court in the case of Ammonia Supplies Corporation (P.) Ltd. v. Modern Plastic Containers (P.) Ltd. [i'994] 79 Comp Cas 163 , we are of the opinion that while the said decision does not necessarily advance the case of the appellants in the present appeal, as the said decision is clearly distinguishable on the facts of the present case, particularly that the shareholder who seeks to agitate his right as a pre-emptive right in the present case incidentall ..... X X X X Extracts X X X X X X X X Extracts X X X X
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