9911796707
TMI Blog2017 (8) TMI 757X X X X Extracts X X X X X X X X Extracts X X X X ..... 7; 19.97 lakhs shall be recovered from the first respondent along with interest as the contended by learned counsel of the petitioner. The said transaction took place in 2008 and the petitioner filed company petition 20 of 2010 in July, 2010 which is annexure P-6 to the petition. Reading of annexure P-6 to the company petition 20 of 2010 shows that there is no mention about siphoning of funds of ₹ 19.97 lakhs from the company to the proprietary concern of husband of first respondent. Therefore, for the first time, such an allegation was made in this petition after lapse of six years. No doubt siphoning of funds of the company, if established is an act of mis-management but the same shall be questioned by the shareholders within a reasonable time. Unless and until a thorough audit is made it is not possible to come to a conclusion that there was no supply of material by the proprietary concern of husband of the first respondent to MGVCL and the amount was not paid towards the supply of 63 Amp kit-kat fuses. It would not be appropriate or possible to have a complete audit of transactions that took place eight years back. The fact remains that wife of the petitioner was a direct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ducting any Board meeting, without following the procedure laid down in the Articles of Association of the company and without following provisions of the Companies Act, 1956, illegally allotted 15000 shares to herself on 5th December, 2007 and it is under challenge in this petition. Due to allotment of 15000 shares to the first respondent, paid up share capital of the second respondent company increased to 39900 shares and thereby percentage of the petitioner and his family members have reduced from 59.95% to 37.41%. 6. Respondents, in reply, took plea that, the petitioner is not qualified under section 399 of the Companies Act, 1956 for seeking reliefs though he has attached consent letters given by the family members of the petitioner on the ground that there is no disclosure in the consent letter as to how many shares they are holding, folio number etc. 7. A perusal of Annexure P-2 at pages 54 to 56 shows that, Mrs. Jayshree J. Vyas, M/s. Upendra I. Vyas and Uday I Vyas have submitted affidavits giving their consent for filing the company petition challenging illegal allotment of 15000 shares of the second respondent company to the first respondent. No doubt there is no m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... leged that, the Chartered Accountant who issued the certificate is not eligible to issue such certificate since he was not an authorised person of the company or auditor of the company. It is also alleged that, in fact no consideration was passed on by the first respondent to the second respondent company in respect of allotment of 15000 shares to the first respondent. 12. It is further contended that, there is no reason to allot 15000 shares to the first respondent on 5th December, 2007. 13. According to the petitioner, the reason stated by respondent No. 1 that, in order to give margin money to the bank loan, there is no need to allot shares and allotment of shares is not supported by figures and documents. 14. Contradicting the case of the petitioner, respondent No. 1 has stated that, wife of the petitioner - Mrs. Jayshree J. Vyas has ratified allotment of 15000 shares to the first respondent on 26th December, 2007 and therefore it cannot be said that allotment of 15000 shares to the first respondent is invalid. Further, it is the case of respondent No. 1 that, the petitioner is having knowledge of allotment of 15000 shares in the month December, 2007 itself and he did ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made regarding allotment of 15000 shares to the first respondent. 20. It is pertinent to mention that, company petition 20 of 2010 before the Company Law Board was filed by the petitioner in the year 2010. It is also pertinent to mention that the first respondent herein filed company petition No. 58 of 2010 for winding up of the second respondent company, before the Hon'ble High Court of Gujarat in April 2010. The said company petition 58 of 2010 was withdrawn by the first respondent herein on 26.04.2010 with liberty to file fresh petition with correct facts. Company petition 20 of 2010 filed by petitioner herein before the Company Law Board questioning allotment of 15000 shares to the first respondent was allowed to be withdrawn with liberty to file fresh petition. 21. The present petition was filed by the petitioner on 05.06.2014. 22. It is relevant to consider here that, whether the delay in part of the petitioner in asking the relief setting aside allotment of 15000 shares to the first respondent assumes any importance or not and if it is so, whether the petitioner is entitled for the equitable discretionary relief. 23. The first respondent did not file any doc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd i.e. the petitioner, did not chose to file a petition challenging the allotment of 15000 shares to the first respondent, till July 2010 in which month company petition 20 of 2010 was filed. Therefore, although allotment of 15000 shares is not according to the procedure laid down, there is acceptance of allotment of 15000 shares to the first respondent by wife of the petitioner in the year 2007 itself, but not challenged the same till July 2010. Having filed a petition in July 2010, challenging allotment of 15000 shares and having withdrawn the same with liberty to file a fresh petition in July 2012, did not chose to file this petition till 5th July, 2014. Therefore, initially, there was a delay of two years in challenging allotment of 15000 shares to the first respondent and thereafter there was a further delay of two years in challenging the allotment of 15000 shares after dismissal of company petition 20 of 2010. This delay has to be seen in light of the facts that Mrs. Jayshree J. Vyas who was one of the two directors of the second respondent company approved the allotment by signing on the resolution dated 26.12.2007 which was not denied by her in affidavit dated 02.05.2014. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of allotment of 15000 shares. No reasons are given by the petitioner for non-filing of this petition for two years, even withdrawal of company petition No. 20 of 2010. Therefore, conduct of the petitioner goes to show that he has not only suppressed the material facts and has caused delay at every stage in questioning validity of allotment of 15000 shares to the first respondent. 31. As regards consideration in respect of 15000 shares allotted to the first respondent, the petitioner wants to exhibit to this court that no consideration was given against allotment of 15000 shares. The petitioner has disputed the competency of the Chartered Accountant who has issued the certificate. Whether the Chartered Accountant is competent to issue such certificate or not is a different question but the fact remain a qualified Chartered Accountant certified that the first respondent made investment of ₹ 2,48,800/- in the share capital of Shree Sadguru Switchgears P. Ltd. The Chartered Accountant has also certified that the first respondent has invested ₹ 1,50,000/- by cash on 05/12/2007 in the share capital of the second respondent company and it has been properly accounted in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Amp kit-kat fuses to MGVCL from M/s. Fuse Sales of which husband of first respondent is sole proprietor. It is pleaded that, on the other hand orders placed on record by the first respondent goes on to show that it was in respect of 865 LTD boxes each requiring 6 numbers fuses or so. It is also stated in the rejoinder that, order was placed on 07.11.2007 and it was completed on 31.03.2008. As no material was supplied to MGVCL, the amount of ₹ 19.97 lakhs shall be recovered from the first respondent along with interest as the contended by learned counsel of the petitioner. The said transaction took place in 2008 and the petitioner filed company petition 20 of 2010 in July, 2010 which is annexure P-6 to the petition. Reading of annexure P-6 to the company petition 20 of 2010 shows that there is no mention about siphoning of funds of ₹ 19.97 lakhs from the company to the proprietary concern of husband of first respondent. Therefore, for the first time, such an allegation was made in this petition after lapse of six years. No doubt siphoning of funds of the company, if established is an act of mis-management but the same shall be questioned by the shareholders within a reas ..... X X X X Extracts X X X X X X X X Extracts X X X X
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