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TMI Blog2007 (6) TMI 546X X X X Extracts X X X X X X X X Extracts X X X X ..... y from the time of incorporation. 3. Shri Krishna Kumar, Counsel for the petitioners pointed out that the Petitioner was to control the entire company and also was to manage the affairs of the company as accepted with by the Respondent and confirmed by the Hon'ble High Court of Punjab and Haryana at Chandigarh and as per minutes recorded in this connection from time to time. My attention was drawn to a resolution dated 9.11.1992 to the effect that Sh. Chanchal Singh who was Chairman and Shri. Surjit Singh Mann, General Manager of the company be removed and Sujan Singh Sahota (Petitioner No. 8) be appointed as a Chairman of the Company and Manjit Singh Lali (Petitioner No. 3) as General Manger; on 27.07.1996, the board resolved unanimously that Chairman of the company could be removed in a proper manner by following correct procedure i.e by passing resolution by 2/3rd majority; on 17.08.1996 a meeting of the Board of Directors met and appointed 12 more directors. 4. Further, it was pointed out by the counsel for the petitioners apprehending danger to the public peace due to the dispute between the different fractions of the Company the petitioners filed an application Unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irmanship of the company without any reasons and appointing Kabul Singh Kalova as the Chairman is illegal and without authority. No notice of removal as a Chairman was given to the Petitioner No. 8. Even during the hearing on merits no arguments have been advanced to substantiate the action of the alleged removal; on 9.09.1996 the AGM was called by an alleged person to be the General Manager without proper notice sent to the petitioners and other members, without any authority, held in an illegal manner in contravention of the provisions of the Companies Act to remove petitioners from directorship of the company; further on 13.07.1998, the authorized capital was enhanced from ₹ 50 lacs to 65 lacs in an illegal AGM held without proper notice sent to the petitioners and other shareholders of the company, in an unauthorized manner shares were allotted to the Respondent No. 3 and his own persons. 7. Further, it has been alleged that the Respondents are guilty of manipulation of record, fabrication of transfer share registered and tampering with the statutory records of the company. My attention was drawn to the following instances: A. Shri Jhaimal Singh and Mandip Singh had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the same and thereby pocketing the proceeds of the company without recording thus perpetuating fraudulent acts. My attention was drawn to the interim orders of the CLB whereby it was directed that the company directors will not dispose of any assets of the company and that all collections from the bus operations would be deposited on day to day basis and expenses would be met out of withdrawal from the bank. It was pointed out that the respondents have not complied with this order and the petitioners have filed applications seeking directions to initiate contempt proceedings. 9. Further, the counsel drawing attention vide C.A. 250 of 2004 placing on record of the fact that inspite of specific directions given by the CLB on 18.8.2003 and on 30.8.2003 to call Mr Inderjit Singh Walia and Mr. Mahinder Singh for the Board meeting, the present management has failed to comply with the order and hence the CLB on 18.3.2004 directed the respondents to comply with the CLB's order dated 18.8.2003 and call Mr. Inderjit Singh Walia and Mahinder Singh for the Board Meetings. Inspite of the aforesaid direction the present management failed to comply with the order and till date have not c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... journment and still the order giving details of the consideration and production of transfer deeds has not been complied with. On 7.2.2003, Mr. Nesar Ahmed, Practicing Company Secretary was appointed vide order dated 24.12.2002 to verify the membership of the Company by going through all records/returns etc and all facts of the records etc that may be produced by the petitioners/ respondents. His report had highlighted the following: (a) it was stated at page 5, in para 4, that no signature card is maintained by the Company and nothing was produced before him to verify the signatures of the transferor(s) or the transferee(s); (b) at page 6 in para 9 it was stated that as per the records of the Respondent Company, Mr. Inderjit Singh Walia, is not a shareholder of the Company, he only holds share certificates containing total 1784 shares alongwith the transfer deeds which are blank and not properly filled; (c) in para 11, it was pointed out that the increase in the shareholding of the respondents is due to the allotment of fresh 60000 equity shares of the Company vide a Board Resolution passed on 7.8.1998 (copy of the same is attached as Annexure IX (Colly). It is to be noted t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... their case on the meetings relating to the year 1996 and 1998. That the prayer sought by the petitioners relates to grievance of the year 1996 and 1998 and the present petition is filed in the year 2001. Reliance was placed on the decision in Rai Saheb Vishwamitra and Ors. v. Amar Nath Mehrotra and Ors. SCL (59) 854. Further, it was argued that the present petition is also barred by limitation as there is no continuous acts of alleged oppression. However, the petitioner have made desperate attempts to make out a case for themselves by filing subsequent applications. It is submitted that subsequent applications can not be resorted to for making out case. Reliance was placed on the decision in Dr. S. Mangalam Srinivasan v. Mani Forgings P. Ltd. and Ors. 2006(129)- COmpcas-0544- CLB. 14. Further, it was pointed out that the petition under Section 397, 398 and 402 of the Companies Act, 1956 is maintainable only if the conditions and the requirements of Section 399 are properly and consciously compiled with. Consent in writing as contemplated by Sub-section (3) is consent to the filing of a particular petition with particular allegation and for a particular relief under Section 397 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the petitioner counsel Sh. Krishan Kant, Advocate in a civil suit titled Hoshiarpur Express Transport Company and Ors. v. Shri Manjit Singh Lali and Ors.. It was pointed out that the signatures of the petitioners in the said minute book are different from that of the affidavit of the petitioner before this Hon'ble Bench. 15. Ms. Charu Sharma, Counsel for the respondents argued that there are no allegations of oppression of the Petitioners. That the petitioners have miserably failed to show that the acts of respondents are oppressive against them. Their grievance if any, is qua director and not qua shareholders. Reliance was placed on the decision in N.K. Moha patra v. State of Orissa 1999 (96 Company cases) 49 16. Further, it was argued that the increase in Shareholding was bonafide and in the interest of the Company. The company issued further capital of ₹ 15 lacs in the year 1998 and the respondents deliberately for the reasons best known to them did not ask for shares in their favour and have deliberately with malafide intention raised this issue now in the year 2001. Reliance was placed on the decision in Om Prakash Gupta and Ors. v. Hicks Thermometers India Li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or through the courts to facilitate their control of the management of the Company, on Inderjit Singh Walia resorted to the use of criminal force to achieve his object. My attention was drawn to the following instances of pending criminal cases registered or filed against Inderjit Singh Walia and on some of his hench-men. (a) F.I.R. No. 10 dated 9-1-2000 P.S. City Hoshiarpur Under Section 149-452-448-342-506/149 I.P.C. and up's 25/27 Arms Act for attempting to take forcible possession of the office of the Company. Inderjit Walia is one of the accused; (b)FIR No. 98 dated 13.8.2000 P.S. Balachaur Under Section 382 IPC regarding snatching of Bus No. PB-07-H-1385 of the Company, Paramjit Singh Walia, real brother of Inderjit Walia is one of the accused, Manjit Singh Lalli has taken the bus on Supardari through the court; (c)FIR No. 271 dated 17.8.2000 P.S. Ludhiana Under Section 382 I.P.C. regarding snatching Bus No. PB-07-F-7685 of the Company. Inderjit Singh Walia is one of the accused. The bus has since been taken on Sapurdari by Manjit Singh Lalli from the court; (d) FIR No. 136 dated 1.9.2000 P.S. City Phagwara Under Section 148-382-342-506/149 I.P.C. while taking away Bus No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aintained right upto the High Court. Criminal Revision No. 580 of 2001 connects. The bus is still with Inderjit Walia (n) Proceeding Under Section 145 Cr. P.C. were got initiated by the police between partner Sujan Singh, a disgruntled share holder and Paranjit Singh, a brother of Inderjit Singh Walia on one hand and Manjit Singh Lalli and Kabal Singh Kaloa on the other hand. The S.D.M. Hoshiarpur was pleased to dispose of the said proceedings vide his order dated 16.2.2000 and dropped the proceedings as the parties were already on litigation before the civil court. The civil court had dismissed the application for the issuance of the interim stay as mentioned in para No. 2 above; 20. Further, the counsel for the respondents argued that the interim orders passed from time to time in this petition are not final orders. Reliance was placed on the decision in . State and Ors. v. N.M.T. Joy Immaculate para 8. It was further pointed out that the question of registering shares of Sh. Inderjeet Singh does not arise reference was made to an affidavit filed by the respondent in compliance with the Hon'ble Company Law Board on 1.11.2003. It was argued that where, on the other hand, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4025 in respect of whom the signatures have been allegedly forged are excluded from the shareholding of the petitioners totalling to 7,33,000 then the petitioners' shareholding totals upto only 5,78,975 which works to only 8.9% and hence this petition is not maintainable for not fulfilling the eligibility criterion as laid down in the provisions of Section 399 of the Act, is also not tenable. This Board has always taken the view that if shareholding of the petitioners is reduced below 10% on account of further issue of shares and if the issue of further shares is also challenged in the petition, then, the petition will not be dismissed as not maintainable in terms of Section 399. Instead, the allegation relating to the issue of further shares would be examined first as to whether the same is an oppressive act and if it is found to be so, then only other allegations in the petition would be examined. In the present petition it has been alleged that that the allotment of 60,000 equity shares as per the resolution dated 7.8.1998 only to the respondents' R-3 and his group, is illegal and deserves to be set aside and further that 5271 shares presented by Shri Inderjit Singh Wali ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es and this issue has been raised now in 2001 is not tenable. The Local Commissioner appointed in this case has also pointed out in his report dated 31.3.2003 that the increase in shareholding has not been explained. It is not found to be for a proper purpose and that no satisfactory explanation has been given for allotment of 60,000 shares to R-3 and his group. There has been no compliance to the provisions of Section 81 of the Act. It is noticed that this allotment has been done in the face of status quo ordered by the CLB. The petitioners have filed a contempt petition in this regard for flouting of CLB's orders. Furthermore, it is noticed that the petitioners' allegations regarding manipulation of record is also found to be correct. The respondents have not been able to meet the allegations regarding acts of oppression and mismanagement in this case. 23. In view of the foregoing, to do substantial justice between the parties, I hereby order as follows: i. The resolution regarding removal of P-8 as Chairman and P-3 as General Manager is hereby set aside. Status quo ante is restored. P-8 is restored as Chairman of R-1 company and P-1 is restored as General Manager o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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