9911796707
TMI Blog1999 (4) TMI 629X X X X Extracts X X X X X X X X Extracts X X X X ..... company was incorporated in 1985, the father was appointed as the managing director and the petitioner and respondent Nos. 3 and 4 were appointed as the whole-time directors and the business of the company was being carried on smoothly till the year 1992 when the father expired. The respondent No. 2, namely, the mother of the petitioner and the other respondents, was appointed as the managing director thereafter. After the death of the father, differences between the surviving family members cropped up resulting in filing of this petition. 2. When the petition was taken up for hearing, considering the family nature of the company, we suggested to the parties that they should try to work out an amicable settlement and towards this end, hearing of the petition was deferred from time to time. In a number of hearings, it was reported that the parties were negotiating settlement. In the hearing on 3-11-1998, a consensus was arrived at by which the petitioner would sell his shares to the respondents but the price for the shares could not be agreed upon. While the respondents offered a sum of ₹ 89 per share on the basis of current value of fixed assets, the petitioner demanded a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tain duplicate share certificates, the company is prepared to issue the same in accordance with established procedure. In view of this, the petitioner may apply for duplicate share certificates which the company shall issue in accordance with law. 5. Another act of oppression is the apprehension of the petitioner that he was likely to be removed as a director, which apprehension later became a reality after the petition was filed and the petitioner moved CA 281 of 1998 on 7-1-1999 challenging the removal on various grounds. Dealing with this application, Shri Gupta, Advocate for the petitioner submitted that sometime in November, 1998, he received a letter from the company that the petitioner had been removed as a director with effect from 24-9-1998. On an inquiry it was found that the company had filed Form No. 32 with the Registrar of Companies on 24-9-1998 that the petitioner was removed as a director on that date. According to him, the established procedure of law had not been followed in this regard and that unmindful of the compromise efforts that were going on, the respondents have removed the petitioner as director even without proper notice to him. Referring the reply f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the respondent Nos. 3 and 4 were present as seen from the attendance sheet. Nothing was mentioned about this board meeting at that time. Therefore, he submitted that decisions taken in a meeting without notice to the director/a substantial shareholder should be declared as null and void. 6. Shri Ganda, Advocate for the respondents, dealing with this issue, submitted that the genuineness of the UPC cannot be questioned. Accord-ing to him, the Advocate of the company is having his office in Malviya Nagar and as such the notices prepared in his office were posted from Malviya Nagar Post Office. According to him, the shareholders have every right to remove a director and this right has also been affirmed by the Supreme Court in Life Insurance Corpn. of India v. Escorts Ltd [1986] 59 Comp. Cas. 548. The shareholder directors decided to remove the petitioner only because the petitioner was acting against the interests of the company by writing to the bankers of the company to stop operation of the account and he has been directly dealing with the customers of the company asking them to stop all the payments due to the company. Because of this, substantial amounts due to the company ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e relevant Form No. 32 was filed immediately after the EOGM, yet, we find substance in the arguments of the counsel for the petitioner that due notices had not been sent to the petitioner for various reasons pointed out by him including the fact that the company was never in the habit of sending notices by UPC at any time prior to these meetings. Even assuming that proper notices had been sent, yet we have already held that the removal of the petitioner as a director is an act of oppression. However, we are not giving any directions in this regard for reasons recorded later. 8. Another allegation of the petitioner is that the company has not been informing him about the activities of the company and that he has been denied the right to inspect various statutory records of the company which he is entitled to as a director and a shareholder. According to the company, this allegation is baseless in as much as the petitioner, as a director, had been signing all documents and he is in possession of the same. Even otherwise, the company has stated that it is prepared to provide any document that may be needed by him. In view of this, he is at liberty to seek inspection of all the docu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he respondent Nos. 3 and 4 at 2020 each. Later, right issues were made in 1987 and 1991 by which the holding of all these shareholders became 12,750 shares each (holding of the respondent No. 4 was 11,570). Since the will of the father mentioned the shares in the company , all the shares held in his name were transmitted, with the consent of all the family shareholders, including the petitioner, to the mother-second respondent in October, 1993. Further right issue was made in April, 1996 and all the shareholders including the second respon-dent were allotted 50,000 each, by which each of the 3 shareholders, now holds 62,750 shares except respondent No. 4 who holds 61,750 shares. Thus, the facts reveal that the petitioner has all along been aware of the transmission of the entire shareholding of the father to the mother and he was also a party to the allotment of the right shares to her thereafter. Even though the petitioner has made allegations of wrongful transmission of shares to the mother in the petition, he has not sought for any relief in this regard except that, in the rejoinder, he has averred that after the death of his father, the shares held by him should have been dist ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ondents, the claim in CA 258 is a bogus one and the company is not liable to pay the same. As far as CA 259 is concerned, the respondents have stated that there have been transactions of credit and debit between the petitioner and the company and once the accounts are reconciled, whatever amount that may be due to the petitioner, it would be paid. As far as these claims are concerned, they do not relate to the status of the petitioner as a shareholder and as such, strictly speaking, they cannot be grounds in a 397/398 petition. But as we have already pointed out, in a family company, it is not possible to differentiate the rights and liabilities of a family shareholder in different manner. However, in this instant case, the respondents have shown their willingness to meet his claim in CA 259 after reconciliation of the accounts which may be done within a month from the date of this order. As far as the claim in CA 258 is concerned, the petitioner may pursue his claims in the civil suit which he has already initiated. 14. We have given our findings/directions on various allegations. The only substantial relief that could have been given by us in the petition is to put the petitio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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