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TMI Blog2010 (10) TMI 917X X X X Extracts X X X X X X X X Extracts X X X X ..... s and misconduct. 2. Shri Rajaratan Bhura, learned counsel for the petitioners submitted the brief facts. Petitioner Nos. 1 and 2 were the subscribers of the memorandum of association and were appointed as the first directors of respondent No. 1 along with respondent No. 3 herein, since the date of incorporation, i.e., September 27, 1988. Respondent Nos. 2 and 3 managed the affairs of respondent No. 1 in the capacity as directors. Petitioner Nos. 1 and 2 are the shareholders of respondent No. 1 holding 10,000 and 1,250 equity shares, respectively, which collectively constitute 45 per cent equity shares of respondent No. 1 and still hold original share certificate Nos. 4, 7 and 8 containing 100 shares, 1,150 shares and 10,000 shares, respectively. The petitioner have not received the notice of annual general meeting for the last two year's and after getting no response from respondent No. 1, they approached their legal consultant. The consultants of the petitioners undertook the search of the records of respondent No. 1, maintained by the Registrar of Companies on the portal of Ministry of Corporate Affairs. The petitioners were shocked when they were informed by their lawyers tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... criminal complaint against respondent Nos. 1, 2, 3 and 4 under sections 467, 420 and 403 of the Indian Penal Code, 1860, vide complaint dated December 20, 2007, to the Senior Police Inspector, Boisar Police Station, inter alia, alleging that the purported accused had fraudulently forged the shares and got transferred in names of respondent Nos. 2, 4 and 5 without knowledge of petitioner Nos. 1 and 2. The transfer of shares of the petitioners without their knowledge and consent is a criminal offence and breach of trust on the part of the transferee of the shares and persons who are managing the affairs of the company. Respondent Nos. 2, 3, 4, 5 and 6 are involved in the fraud and thereby committed breach of trust and thereby the petitioner's interest will be seriously affected. It was held in number of cases that the directors of the company who involved in illegal act, forgery or fraudulent acts are liable to be removed from the directorship. It was held in one leading case that even the group controlling majority shares and managing the affairs of the company detrimentally to the interest of the company and its shareholders, could be directed to sell their shares to the other grou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e petition is filed without proper authority. The petitioners have avoided to subscribe their signatures and representations were made through the agents to avoid their signatures. The signature can be verified from records and compared with the signatures in the disputed documents. Even the complaint which was lodged with the police signed, by the advocate on their behalf, for the said reasons. They have done so in order to avoid the scrutiny of the signatures and comparison with their signature on the alleged transfer documents and the disputed documents. Petitioner No.1 had subscribed his signature in many documents and even in court proceedings. There was no forgery as alleged at any earlier stage against the respondents. The allegations are made in a whimsical manner varying from one another. Earlier it was alleged that Mr. P. K. Arumughan was director, responsible for the transfer of shares. The allegation was proved to be false and therefore withdrawn after it was revealed that he was no longer director since 1991. 5. It is submitted that petitioner No. 1, admitted that he has agreed for transfer of shares in favour of respondent No. 2 and that steps can be initiated to tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant to sign themselves as their false allegations that their signatures were forged by the respondent will be proved that the signature on the records as well as in the disputed documents will be proved to be that of the same person. It is submitted that a declaration-cum-confirmation certificate submitted by the petitioner dated March 13, 2006 and May 7, 2007, is signed by himself and the signature tallies with the various documents filed by him and admitted by him. The shares were transferred with the consent of the petitioner No. 1 as per his declaration dated March 13, 2006 and May 7, 2007 and the share transfer form signed by petitioner No. 2 dated May 2, 2001. The effect of transfer was carried out in accordance with the board resolution dated March 13, 2006. In view of the reasons stated above the petition is liable to be dismissed have found no merit. 6. Heard learned counsel appearing for the parties and perused the pleadings, documents and citations relied upon by them. The main issue fell for consideration is whether the petitioner is entitled to the relief as prayed for ? Admittedly the petition is filed under section 111(4) of the Act seeking various reliefs as praye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 00 shares each on March 13, 2006 and 1,250 shares of petitioner No. 2 in the name of respondent No. 4. The petitioners filed the copies of the memorandum and articles of association of the company wherein the petitioners and respondent No. 3 were shown as subscribers to the memorandum and articles and subscribed 100 shares each. The authorised capital of the company is Rs. 5,00,000 divided into 50,000 equity shares of Rs. 10 each and issued, subscribed and paid-up capital is Rs. 2,50,000 divided into 25,000 shares of Rs. 10 each. As per the copy of the annual report made for the year September 30, 2005, the petitioners were shown as directors and shareholders. The annual return filed for the year September 30, 2006, the details of shares at column VI petitioner No. 1 is shown as the transferor and respondent Nos. 2 and 5 shown as the transferee in respect of 5,000 shares each and the date of registration of transfer shown as March 13, 2006. The names of the petitioner do not reflect in the shareholders' list enclosed along with the said annual returns. The respondents contend that petitioner No. 1 transferred the shares vide his declaration- cum-confirmation dated March 13, 2006, w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated December 11, 2007, addressed to P. K. Arumughan wherein at paragraph 2 it is clearly stated that petitioner No. 1 was a shareholder of respondent No. 1 company and held 10,000 shares till March 13, 2006. It is also further confirmed from declaration-cum -confirmation letter dated May 7, 2007, that petitioner No.1 ceased to be a shareholder and director of the company. The contention of the petitioner that the provisions of law in respect of transfer of shares have not been complied with, cannot be accepted on the ground that petitioner No. 1 himself declared that he was a benami shareholder and the shares could be transferred on the basis of declaration-cum-confirmation letter duly signed on March 13, 2006, without any further formalities/compliances. Further the board also took decision in accordance with the declaration-cum-confirmation which was final and binding on all the parties. The citations relied upon by learned counsel for the petitioners will not be of much assistance to the facts of the present case. The second petitioner transferred the shares by signing the share transfer deed on May 2, 2001, in favour of Sayuj Arumughan, respondent No. 2 herein. Hence this Ben ..... X X X X Extracts X X X X X X X X Extracts X X X X
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