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TMI Blog2013 (4) TMI 162X X X X Extracts X X X X X X X X Extracts X X X X ..... is not maintainable. - CA NO. 194 OF 2012 - - - Dated:- 24-12-2012 - KANTHI NARAHARI, J. For the Appellant T.K. Bhaskar. For the Respondent R. Sankaranarayanan. ORDER:- 1. The present company application has been filed under Regulation 44 of the Company Law Board Regulations, 1991 by the respondents praying this Bench to dismiss the petition as not maintainable. 2. Shri T.K. Bhaskar, learned counsel appearing on behalf of the applicants/respondents submitted that the company petition filed by the 1st respondent/petitioner is not maintainable as the 1st respondent/petitioner does not fulfil the criteria for eligibility to file or maintain the petition. The applicant is constrained to file the present application challenging the maintainability of the above company petition. This application is being filed to seek the dismissal of the company petition in limine on the basis that the 1st respondent/petitioner does not fulfil the eligibility criteria u/s 399 of the Companies Act. He submitted that the present authorized share capital of the 1st Applicant Company is Rs. 32,00,00,000/- divided into Rs. 2,40,00,000 equity shares of Rs. 10/- each and 8,00,000 redeem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Advances includes the above amount of Rs. 2 crore. 4. The learned counsel further submitted that the allegation contained in Para 2(b) of the petition is denied as false and baseless as it is incorrect to state that the 2,00,000 Redeemable Cumulative Preference Shares have been already redeemed in the year 2005 itself. It is also incorrect to state that the audited financial statement fails to mention of such redemption and reduce the total paid-up capital accordingly. The 2,00,000 redeemable preference shares most definitely form part of the issued and paid up share capital of the 1st Applicant Company. The 1st Respondent/Petitioner being very much aware that the shares were never redeemed and knowing very well that he does not fulfil the criteria for the purposes of Section 399 of the Act, he is deliberately crafting a false scenario to attempt to mislead the court and to harass the applicants. In fact, the 1st respondent is a signatory to the audited balance sheets that he is questioning in the petition. The applicants submit that the audited balance sheets for the years 2008-09, 2009-10 and 2010-11 have been signed by the 1st Respondent/Petitioner as well. The allegations mad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e affidavit conspicuously omits to state the same. Further, the petitioner possesses indefeasible rights to getting issued more than 71 lac shares and therefore there can be no challenge to the company petition on the ground of Section 399 of the Act at all. The petitioner humbly submits that the very redemption of preference shares is itself an issue and if on the date of presentation of the company petition if mechanically the books of account alone should be looked into it could defeat the very purpose of the legislative enactment of Sections 397 and 398 of the Act. 7. He further submitted that in the Board Meeting which is under challenge in CA No. 189 of 2012, the respondents have surreptitiously manipulated the entry relating to share application money. It is highly intriguing as to how share application money could be unilaterally transferred to unsecured loan a/c. Secondly, Para 9(h) of the company petition seeks a direction to the Company to file its Annual Returns for the last six years. In fact as per law, a Company is required to furnish a complete list of all its shareholders once in five years which the Company has also not complied with. As disclosed in the audited ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n u/s 397, 398 of the Act, one has to fulfil the requirement as contemplated under the above provision of law. Unless and until the above criterion is fulfilled, the petition is not maintainable. The persons who can qualify to file the petition are (i) in case the company is having a share capital, not less than 100 members; or (ii) not less than 1/10th of the total number of its members, whichever is less. 11. In the present case, admittedly, the company is having a share capital and is a public listed company having more than 20,000 shareholders. The petition has been filed by a single shareholder and therefore the above criteria are not fulfilled by the petitioner on the ground that to meet the requirements of the above criteria there must be not less than 100 members and not less than 1/10 of its members. I hold the same is not applicable in the present case. 12. The next criterion to meet the requirement to maintain a petition, in the very same provision, is that any member or members holding not less than 1/10th of the issued share capital of the company provided that the applicant or applicants have paid all calls and other sums due on their shares. There is no dispute i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the respondent/petitioner i.e. Shri Kamal Babbar has signed the balance-sheet and profit loss account for the year ended as at 31.03.2011 and is aware of the net paid-up capital of the Company. Further, the respondent/petitioner is fully aware of the fact that the shares issued to the Punjab National Bank have not been redeemed and shown as part of the share capital. Mere seeking implementation of the circular resolution in the main petition does not give any right for the purpose of maintaining the petition. The prayers as made in the petition would be considered only when the petition is maintained. The Bench will strictly adhere to the provisions of the Companies Act, 1956. It is not out of place to mention that the Company Law Board had occasions to consider and take a view regarding maintainability of a petition, namely, a petition is maintainable provided there had been any challenge to further allotment of shares in a petition on the ground that the petitioner's shareholding was diluted by illegal allotment and the said allotment is challenged in that petition. However, in the present case, there is no challenge to any allotment of shares by which the petitioner's shareho ..... X X X X Extracts X X X X X X X X Extracts X X X X
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