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TMI Blog2017 (9) TMI 1200X X X X Extracts X X X X X X X X Extracts X X X X ..... t of the Petitioners. The transfer of shares also gives certain rights to the Transferee of shares in these three years in the business of the Company. From the pleadings of the Petitioners and from the Balance Sheet of Hotel Satyaketu Pvt. Ltd., it appears that it has taken a loan from one Hotel Oasis in which the Petitioners are also shareholders. It appears that unsecured loans have also not been paid by the 1st Respondent Company to the Petitioners and therefore that made the Petitioners to raise the dispute regarding the transfer of their shares in favour of Vithalbhai Patel. Therefore, there is also delay and laches on the part of the Petitioners which certainly, in the facts and circumstances of the case, amounts to acquiescence, waiver or estoppel. Thusthe Petitioners are not entitled to the relief for rectification of Register of Members of 1st Respondent Company. Once the Petitioners are not entitled to the relief of rectification of Register of members, they are not entitled to file the Petition alleging oppression or mismanagement. Moreover, a perusal of the Petition shows that no specific allegation of oppression or mismanagement is made except alleging wrong Annual ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Respondents, verified the Website of the Ministry of Corporate Affairs and found that the shares of the Petitioners were transferred without following the procedure. Petitioners state that they never offered their shares for sale; they never executed Share Transfer Forms; no payment was made to them for purchase of shares; and the procedure contemplated for transfer of shares has not been followed. In the Annual Return dated 29.9.2012 it was shown that the shares of Petitioners No. 1 to 4 and of husband of Petitioner No.4 were transferred. Further according to the Petitioners, the husband of Petitioner No.4 late Mahendrabhai Patel expired in 2008, but it is shown that his shares have been transferred in the year 2011-2012. Petitioners filed copy of Death Certificate of late Shri Mahendrabhai Patel. Before filing the Petition, Petitioners wrote letters to 1st Respondent Company seeking clarification about transfer of shares, but no reply was received from the Company. Petitioners being the shareholders and biggest creditors of the Company their interest must be protected by the Respondents. Respondents by denying the rights of the Petitioners as shareholders and removing their name ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emoval of their names they are now complaining about it without any basis. During the life time of late Shri Vithalbhai Patel this issue was never raised by the Petitioners. Shri Vithalbhai Patel died on 04.4.2014. Petitioners in order to have a claim of share in the separate property of late Shri Vithalbhai Patel have started various litigations against Respondent No.2 and their children and this is one of the said litigations. 8. Respondents No. 2 to 4 as 'Directors' and 100 per cent shareholders are managing the affairs of the 1st Respondent Company. Petitioners having sold their shares and surrendered their share certificate have approached this Tribunal with unclean hands. There is no material change in the management of the Company as alleged by the Petitioners. It is stated that the power of attorney given by Petitioners No. 3 and 4 in favour of Petitioners No. 2 is only for the purpose of rectification of names in the Register of Members; but not filing petitions under sections 397 and 398. Petitioners were allowed to have inspection of records of Respondent Company. In the Annual Return filed on 29.9.2012 transfer of shares to Petitioners has been disclosed. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent. Respondents stated that the shares have been transferred from the Petitioners to late Shri Vithalbhai Patel and therefore Petitioners cannot call upon Respondents No. 2 to 4 regarding the consideration. 9. Heard the arguments of learned PCS for the Petitioners and of learned PCS for the Respondents No. 3 and 4. 10. This is a combined Petition seeking rectification in Register of Members of 1st Respondent Company, and complaining oppression and mismanagement in the conduct of affairs of 1st Respondent Company. 11. In the Petition, originally the Section of law mentioned is sections 111, 111A, 397, 398 and 402 of the Companies Act, 1956. It appears that sections 111 and 111A were struck off and section 58 of the Companies Act, 2013 is mentioned. 12. Sections 111 and 111A of the Companies Act, 1956 correspond to sections 58 and 59 of the Companies Act, 2013. 13. The averments made in the Petition and the reliefs prayed clearly go to show that the Petition is filed for the relief of rectification of Register of Members of 1st Respondent Company which is squarely covered by Section 59 but not by Section 58. Therefore, this Petition has to be treated as a Petition und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ai Patel is no more. Therefore, so far as the transfer of shares of late Mahendrabhai Patel is concerned, it may not be a valid transfer. But there is no legal right for the Petitioners to question about the transfer of shares of Mahendrabhai Patel unless Mahendrabhai Patel gift his shares to one of the Petitioners or Mahendrabhai transfer his shares to Petitioner No.4. 16. It is the Petitioners who approached this Tribunal seeking rectification of names in the Register of members in the 1st Respondent Company on the ground that their names were removed from the Register of Members without sufficient cause. It is for the Petitioners to file the Share Certificates of their shares at least, prima facie, to show that they have not transferred their shares. Petitioners No. 1 to 4 did not choose to file their Share Certificates or the Share Certificates of late Mahendrabhai Patel. It is not even the case of the Petitioners that the share certificates of Petitioners and late Mahendrabhai Patel were stolen or misplaced. Moreover, it is the case of the Petitioner No.4 that as a legal heir she is entitled for the share of late Mahendrabhai Patel on the basis of a Pedhinama. It is stated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Respondent No. 5 Company Secretary filed Annual Return dated 29.9.2012. The Petitioners although stated that Respondent No.6 gave a wrong Compliance Certificate and Respondent No. 5 wrongly certified the Annual Return, no material is placed on record to substantiate such allegations. 18. Learned PCS appearing for the Petitioners relied upon a decision of the Hon'ble Supreme Court in M.S. Madhusoodhanan v. Kerala Kaumudi (P.) Ltd. [2003] 46 SCL 695 . In that decision, in Para No. 166 it is clearly held that when the documents duly maintained by the company recording the transfer of shares had not been disproved, a finding that there are no share transfer deeds and there was no transfer of shares effected cannot be accepted. In that Paragraph, it is also held by the Hon'ble Supreme Court that in the absence of proof of the record that the Registers of the Company were not duly maintained the contention that the provisions of Section 108 of the Companies Act have not been followed cannot be upheld. Therefore, the above decision relied upon by the learned PCS for the Petitioners, in my view, is more applicable to the case of the Respondents than the case of the Petitioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... transfer of shares only by issuing a letter dated 6.8.2014. That means, nearly for a period of two and a half years Petitioners had not raised their little finger although their names were removed in the Register of Members of 1st Respondent Company and the name of Vithalbhai Patel was entered. In view of the fact that the relevant Form was uploaded in the Website of the Registrar of Companies for the relevant year, it can only be said that the Petitioners have got knowledge of the removal of their names from the Register of Members. No reasons were given, much less sufficient reasons, for the delay of nearly 2 years in questioning about the removal of their names from the Register of Members. On this aspect, learned PCS appearing for the Petitioners relied upon the decision of the Hon'ble Bombay High Court in Ms. Sulochana Neelkanth Kalyani v. Takle Investments Co. reported in 2016 (O) ALJ-MH 173666 . In that decision, it is held that the Company Law Board noted several admitted points for holding the transfer to be in contravention of Section 108. In that case the answering Respondents did not produce the Register of Members of the Company. In that case the purported An ..... X X X X Extracts X X X X X X X X Extracts X X X X
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