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TMI Blog2013 (4) TMI 595X X X X Extracts X X X X X X X X Extracts X X X X ..... its incorporation. It is to bear in mind that even to seek relief for rectification of register of members, one has to necessarily establish the reasons/grounds for such rectification. It is not the case of the petitioner that even though he had paid the amounts for the subscribed shares, the company removed his name without any reason. Mere mention of a particular provision would not make out a case automatically unless, the ingredients of that provision is satisfied in the petition. In the present case no such grounds are mentioned nor is any case made out seeking enforcement of that provision of law. Moreover it is an attempt to make out a case to maintain a petition. Admittedly, the petitioner's name appears in the MoA of the company as a subscriber and there is no other documentary proof to establish that he is a member of the company. The respondents categorically stated that the petitioner did not pay the subscription amount to the company. The petitioner did not deny the same except stating that he spent huge amounts on the company. Therefore, the petitioner did not pay the subscription amount thereby he cannot claim to be a member of the company. It is mandator ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duced into writing in the form of memorandum of understanding ('MoU') dated 23rd April, 2009 and signed by the director of Sarthi Pharmaceuticals Ltd. and R1-company. To ensure smooth implementation of the MoU with Sarthi Pharmaceuticals Ltd., the petitioner negotiated with Janta Cooperative Bank Ltd. (in liquidation) for one time settlement of the dues of Sarthi Pharmaceuticals Ltd. to the said bank of paying a lump sum amount of Rs. 2.51 crore and ensured an MoU between the said company and the said bank vide MoU dated 16th July, 2009. Pursuant to the MoU dated 16th July, 2009 the Janta Cooperative Bank Ltd. (in liquidation) issue a no objection certificate dated 7th August, 2009 to Sarthi Pharmaceuticals Ltd. for sale of its factory to R1-company. The petitioner paid an amount of Rs. 10,00,000 by three cheques from his personal funds to R1-company for onward payment to Sarthi Pharmaceuticals Ltd. This amount was paid by way of Rs. 5 lakh from the petitioner's bank account with Kotak Bank on 24th July, 2009 by a cheque of Rs. 1 lakh on 27th July, 2009 from the petitioner's account in HSBC Bank; and Rs. 4 lakh on 27th July, 2009 from the petitioner's bank account with Punjab Natio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 27th May, 2010 for the removal of the petitioner from the Board of directors of R1-company along with notices dated 2nd January, 2010, 12th February, 2010, 8th April, 2010 for the purported Board meetings alleged to have been sent under certificate of posting to the petitioner. The said notices of Board meetings were never received by the petitioner. It is settled law that notices sent by certificate of posting are not valid means of service. It can be seen from the purported notice dated 2nd January, 2010 that in Sl. Nos. 3 and 4 items mentioning allotment to subscribers who have paid for shares subscribed and issue of share certificates to them has been mentioned. This has been done probably for allotting the 3,333 shares subscribed to by the petitioner to R3 who was never a subscriber to the memorandum and articles of association of the company under the guise of the petitioner not having paid the amount for the said 3,333 shares. Petitioner is shown as not having any shares in R1-company in its annual return as on 5th July, 2010. The alleged allotment of original shares belonging to the petitioner to respondent No.3 as borne out by the annual return is contrary to the memora ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tments Ltd. [2002] 46 CLA 187 / 35 SCL 849 (CLB - New Delhi). (9) In the matter of Srichand Bajaj v. Bajaj Promoters (P.) Ltd. [2006] 75 CLA 303 /[2007] 76 SCL 8 (CLB - Chennai) to show : 'Whether mere statutory returns without being supported by any primary documents will not have any evidentiary value, because the RoC does only ministerial acts and his taking of statutory forms on record will have no sanctity in regard to the validity of such returns - Held "Yes".' [Head Note] (10) In the matter of S.K. Bhattacharya v. Union of India [1996] 23 CLA 18l/[1998] 91 Comp. Cas. 37 (Delhi), to show : "RoC is neither a court nor an adjudicating authority - he is an administrative authority and his office is an office of record." (11) In the matter of Sachin Bansal v. Accent Shoes (P.)Ltd. [2009] 90 CLA 377 (CLB), to show : "Certificate of posting (UPCs) are not reliable since they can be got hold of without actually putting the letters in the post. Sending of notices under UPC can be an effective tool and deemed to be service under section 53 if proper entries are made in the despatch register, and expenses on this account is distinctly recorded in the books of account, and f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , register of members and annual return. As per provisions of section 399(1)(a) the applicant filing application under sections 397 and 398 must have paid all calls and other sums due on their shares. The petitioner has not paid the amount due on 3,333 shares agreed to be taken by him as a subscriber to the MoA and, therefore, he is not entitled to file the present petition. The petitioner has failed to establish that he has paid Rs. 33,330 for 3,333 equity shares which constitute 33 per cent of the issued and paid up capital and which would entitle him to file the present petition. Therefore, the petition is liable to be dismissed in limine with costs. The respondent has been allotted 3,333 shares which were agreed to be taken by the petitioner but he has not paid the subscription amount. Therefore, the said 3,333 shares are validly held by the R3. The said R3 is now validly appointed as director of the company. The contention of the petitioner that he was the managing director of the company but there is no evidence on record hi the RoC or the company that he was appointed as managing director of the company. It is not true that the petitioner identified Sarthi Pharmaceuticals Lt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e company's cash he was handling. The amount was paid on behalf of SPL to the bank on 20th October, 2009 in cash. The petitioner be directed to disclose the source of Rs. 5,00,000 which he claim to have deposited with Janta Sahakari Bank from his personal account. The payment is made on behalf of the company. The petitioner is a fraudster and has tried to establish that he is having financial stake in the company. The petitioner was allowed to be a part of the management of the company to arrange the funds from the SBI or any other bank for the take over of factory of SPL. But he failed to obtain or arrange any loan from any bank for the purpose. The tall claims made by the petitioner have proved to be bogus and it is proved that the petitioner had no capabilities to perform as promised. He claimed to have paid Rs. 2 lakh in cash from his resources but the letter from SBI dated 14th September, 2009 states that the SBI received only Rs. 10,000 as processing fee for TEV. His claim that he paid Rs. 2 lakh in cash from his personal funds does not hold any water/substance and does not survive. He is trying to mis-guide the Bench. The petitioner duped the company and thereby the R2 by ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een removed as alleged. It is denied that R2 has removed the petitioner by creating false record of issuing notices under certificate of posting and conducting meetings on paper. The so-called act by R2 has not been done in connivance with R6 and R7 as alleged. The service of notices for Board meetings held on 9th January, 2010, 20th February, 2010, 15th April, 2010 and 26th May, 2010 was in accordance with section 53 of the Act and, hence, in accordance with law and there is no illegality at all. The petitioner has violated the provisions of section 283(1)(g) and 283(1)(i) and has automatically ceased to be a director of the company. Violation of section 299 is apparent as no notice of disclosure of interest has been served by petitioner on the company by March-end 2009, and for such contravention the petition has vacated his office automatically under section 283(1)(i). The petitioner has not denied that he has not complied with the provisions of section 299 of the Act. The petitioner has mentioned that he subscribed 3,333 shares but has not anywhere confirmed/mentioned that he paid for the said shares as subscriber. The petitioner did not pay Rs. 33,330 for the shares for 14 mon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssionals and have no mala fide designs. The allegations made by the petitioner against the said respondents itself shows the character and intentions of the petitioner. The petitioner by filing the present petition and complaint for misconduct with ICSI has created a panicky atmosphere in the fraternity of company secretaries and this is another attempt to deprive the company from seeking the assistant from the professionals. The petitioner is not a shareholder and, therefore, he cannot file the present petition. The petitioner has not come with clean hands and has himself mismanaged the company and gross prejudice is caused to the interest of the company and R2. The petition is, therefore, required to be rejected with costs. 7. Heard the learned counsel and PCS appeared for the respective parties, perused the pleadings, documents and citations relied upon by them. After analysing the pleadings it is to be decided is whether the petition is maintainable? The petitioner filed the petition by invoking sections 111, 397- 398 of the Act and according to him it is a composite petition. The petitioner contended that he is a subscriber to 3,333 shares and was the first director of the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... subscriber and there is no other documentary proof to establish that he is a member of the company. The respondents categorically stated that the petitioner did not pay the subscription amount to the company. The petitioner did not deny the same except stating that he spent huge amounts on the company. Therefore, I am of the firm opinion that the petitioner did not pay the subscription amount thereby he cannot claim to be a member of the company. Hence, I declare that he is not a member of the company. To maintain a petition under sections 397-398 one must qualify himself under section 399 of the Act. As per the said provision the following members of a company shall have the right to apply under section 397/398 of the Act. (a) In the case of a company having a share capital, not less than 100 members of the company or not the less than 1/10th of the total number of its members, whichever is less or 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 or other sums due on their shares. Thus, it is mandatory requirement that any member or members who hold not less than 1/10th of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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