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TMI Blog2016 (12) TMI 1496X X X X Extracts X X X X X X X X Extracts X X X X ..... name has been struck off w.e.f. 2007. Therefore, on the date of presentation of the petition in 2015 petitioner no. 4 has no legal existence. So they were not authorized to file a petition. - C.P. NO. 61 OF 2015, I.A. NO. 14 OF 2016 - - - Dated:- 6-10-2016 - VIJAI PRATAP SINGH, JUDICIAL MEMBER AND S. VIJAYARAGHAVAN, TECHNICAL MEMBER For The Petitoner : Ms. Noelle Banerjee and Avijit Dey, Advs. For The Respondent : Jishnu Chowdhury and Nikhil Jhunjhunwala, Advs. For The Intervenor : Debnath Ghosh, Nirmalyo Ghosal, Ms. Anindita Ghosh and Rajesh Upadhyay, Advs. ORDER Vijai Pratap Singh, Judicial Member As per averment in the petition, Petitioner no. 1, Mr. Arvind Parasramka has contended that he has 500 shares which he acquired by purchase from the respondent no. 6 amounting to 0.91% of the total issued equity shares in the Respondent No. 1 Company. Petitioner no. 2, Bhubnesh Commercial Private Limited has purchased 1700 shares in respondent no. 1 company from respondent no. 7 being 3.01% of the total issued equity shares. Petitioner no. 3, Siemen Syntex Private Limited, has purchased 1800 shares in respondent no. 1 Company from respondent no. 8 bein ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isition of 4000 shares from respondent nos. 6, 7, 8 and 9 had intimated SEBI and the Calcutta Stock Exchange in terms of the Exchange Regulations. It has been stated in the petition that the respondent no. 1 company refused to issue receipt of such disclosures to the petitioner and had to forward the same by Speed Post. 8. It has been contended by the petitioner no. 1 that the respondent no. 1 company has not been transferring the shares to petitioner nos. 1, 2 and 3. However, the petitioner has stated that the respondent no. 1 company mentioned about pre-existing contract or agreement for transfer of share is in subsistence and hence the shares could not be transferred in favour of the petitioner. The petitioner nos. 1, 2 and 3 have also alleged there have been instances of siphoning of funds and the valuable real estate property has been shown at negligible value in the books and it is being used for the personal benefit of the respondent nos. 3, 4 and 5 without any benefit to the company or to its other shareholders. 9. The petitioner has also stated that there is substantial siphoning and/or diverting of fund and has contended that the affairs of the company may be invest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce with the form prescribed under the Companies Act, 2013, hence the transfer of the shares sought was not registered and the documents returned. As such the petitioners together, therefore, do not hold the requisite shareholding under Section 399 of the Companies Act for the purpose of maintaining an application under Section 397 and 398 of the Companies Act, 1956. 15. The respondents have also stated that the said application is contrary to the provisions of the Companies Act, 1956 and other applicable provision of Companies Act, 2013 as well as the Company Law Board Regulation. Respondent No. 1 has also contended that the petitioner no. 4 Company has no locus standi to maintain the present application because its name has been struck off in the year 2007. 16. The Respondents have contended that it is the intention of the petitioners to prevent smooth function of the respondent No. 1 Company and as such the said application is a vexatious proceeding made on the basis of clever and crafty drafting and the same is liable to be nipped in the bud. Furthermore, on a plain reading of the company petition it is evident that the same does not disclose any cause of action and reaso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spondent No. l Company which has been purchased from Proforma Respondent No. 6 and the same is about 0.91% of the total issued equity shares of the respondent No. 1 Company. The petitioner No. 2 Bhubnesh Commercial Private Limited is holding 1700 Shares of the respondent No. 1 Company which he claimed to have purchased from Proforma Respondent No. 7 and the same is about 3.01% of the total equity shares of the respondent no. 1 company. Petitioner No. 3 Siemen Syntex Private Limited having holding 1800 shares of the respondent no. 1 Company which has been purchased from Proforma Respondent Nos. 8 and 9 and the same is about 3.28% of the total equity shares of the respondent no. 1 company. Petitioner No. 4, Meghdoot Services Ltd. is having 3875 equity shares of the respondent No. l company which is equivalent to 7.05% of the total issued equity shares of the respondent no. 1 company. 22. As per averments in the petition, petitioners' holding together is 14.25% equity shares of and in the respondent no. 1 Company. The petitioners have also mentioned by the reason of the aforesaid holdings the petitioners have more than one-tenth of the issued and paid up share capital of and in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r party to be joined in the instant proceeding. The petitioner/applicant have also mentioned that they will also be a member for relief in respect of or arising out of the same act or transaction or series of acts or transactions which exists in the instant proceedings. 27. The applicant has stated that he is a necessary and proper party and have more or less identical grievance as against the respondents and without the applicant, if any, order is passed in the instant proceeding the applicant will suffer irreparable loss. 28. It is also mentioned in the application that applicant fears in the light of present application, respondents may seek to increase the capital of the company in their favour with the intent to reduce the applicant and petitioners to a hopeless minority and, therefore, ineligible to seek redressal under sections 397 and 398 of the Act for the benefit of minority shareholders and qualification for the same. 29. Ld. Counsels for both the petitioners and respondents relied on the case law of Hon'ble Bombay High Court in Killick Nixon Ltd. v. Bank of India. The petitioner's counsel has relied on the above ruling and emphasized that Hon'ble Bo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etition because everything in connection with the filing of the petition has been done by the transferee who holds a power of attorney from the transferor. 33. In the above mentioned case the Hon'ble Bombay High Court has clearly laid down the law that a transferee can file a petition on the basis of power of attorney given by the transferor of shares. Hon'ble Bombay High Court specifically laid down that only way in which a transferee of shares can redress his grievances against the company is by acting through the transferor, who holds the share for the benefit of transferee. The transferor, therefore, when he applies under sections 397 and 398 of the Act is acting in the interest of his beneficiary and he is seeking to redress the grievances of his beneficiary. 34. In this case admittedly petitioner nos. 1 to 3 are not recorded shareholders of the respondent no. 1 company but the petitioner nos. 1 to 3 have claimed their right on the basis of transferee of shares of the respondent no. l company. But in fact petitioner nos. 1 to 3 have not filed this petition through a power of attorney given by the transferor of the shares. Therefore, as per law laid down by the Ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petition under section 111A of the Act has a provision for rectification of the register of transfer of shares when a company without sufficient cause refuses to register transfer of shares within stipulated period. Both the requirement of Section 111A and Sections 397 and 398 of the Act cannot be reconciled at this stage. To bring a petition under section 397 and 398 only a member of the Company have a right, but for bringing a petition under section 111A a transferee of shares can bring a petition, who have undoubtedly cannot be termed as a member of the company, because before the transfer of shares, a transferee cannot be treated as member of the Company. Therefore, a joint petition under section 111A and sections 397 and 398 of the Act is not maintainable as per law laid down by the Hon'ble Supreme Court in the above case and the petitioners arguments cannot hold good, that inspite of the fact that they are not shareholders of the respondent no. 1 company, petition is maintainable because it is a joint petition under sections 111A and Sections 397 and 398 of the Act. No authority has been adduced that in same situation and contingency a member may be different from hol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not authorized the petitioner nos. 1 to 3 to file a petition. Therefore, petitioner nos. 1 to 3 have no right to file and bring a petition under section 397 and 398 of the Act. It is also relevant to mention here that aggregate shareholding of petitioner nos. 1 to 3 only comes to 7.2% of the total shareholding. Therefore, it is clear that they do not fulfil the requisite number to bring a petition under section 397 and 398 of the Act. As regards the petitioner no. 4 holding is concerned, his shareholding, i.e., 7.05% of total shares, cannot be considered for reckoning the requisite number of shares because their name has been struck off w.e.f. 2007. Therefore, on the date of presentation of the petition in 2015 petitioner no. 4 has no legal existence. So they were not authorized to file a petition. 42. As regards I.A. No. 14/2016 is concerned which has been filed by Lucky Trading Company in the midst of arguments for adding him as a party in the case is also not maintainable, because the proposed applicant/petitioner contends that they hold 2500 shares of the respondent no. 1 company, which is more or less 4.5% of the total shareholding of the respondent no. 1 company. Petition ..... X X X X Extracts X X X X X X X X Extracts X X X X
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