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TMI Blog2005 (11) TMI 509X X X X Extracts X X X X X X X X Extracts X X X X ..... ) to surcharge the second respondent with siphoning the funds of the Company and to direct an investigation into affairs of the Company under Section 235/237 of the Act; (e) to restrain the respondents from alienating or encumbering the properties belonging to the Company; (f) to direct the second respondent to make good the loss suffered by the Company in using the funds of the Company for the purchase of various items of immovable properties and for the development of these properties; and (g) to direct the second respondent to restore all benefits to the petitioner and her children as shareholders of the Company. 2. The main acts of oppression and mismanagement alleged in the company petition are in relation to (a) acquisition of a number of immovable properties in the names of the second respondent, his first wife being the third respondent and their children from and out of the funds of the Company; (b) manipulation of the records of the Company, thereby illegally transferring the impugned shares standing in the names of the petitioner and her children to the second respondent and others. However, the reliefs claimed in regard to (i) audit of the books of accoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ure differs. Furthermore, the petitioner and her children neither executed any instrument of transfer nor the purported transfer of shares does satisfy the mandatory requirements of Section 108 of the Act. No consideration has been received from the second respondent under the deed of arrangement and declaration by the petitioner towards the impugned shares. The petitioner and her children while challenging in November, 2004 before the High Court of Madras in C.S. No. 951/2004, the deed of arrangement and declaration, prayed for a judgment and decree against the second respondent for a mandatory injunction, inter-alia, to make necessary arrangements to perform the marriage of the petitioner's children. The proceedings are now before a Division Bench of the Madras High Court. In view of this, the validity of the deed of arrangement and declaration need not be adjudicated in the present proceedings. The second respondent while opposing the civil suit before the High Court, has sought to rely upon the deed of arrangement and declaration, but not whispered any thing about the impugned transfer of shares by the petitioner and her children. The petitioner and her children have not re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oint of time, in which case, the petitioner is bound by the terms of the deed of arrangement and declaration. While the income tax return filed by the petitioner for the year 2002-2003 shows an amount of ₹ 38,000/- towards her share capital in the Company, the income tax return filed by her for the year 2003-2004 does not furnish her contribution towards the share capital in the Company. The plea of the petitioner that her auditor committed a mistake, while filing the income tax return by not furnishing the particulars of her contribution towards the share capital in the Company is unacceptable. Therefore, the annual return for the year 2003 reflects the true position that the petitioner and her children are no longer the shareholders of the Company. In these circumstances, the petitioner having ceased to be a shareholder of the Company and having failed to make out a case of oppression and mismanagement as envisaged in Sections 397 and 398, is not entitled to any relief as claimed by her. 5. I have considered the pleadings and oral submissions of learned Counsel. While according to the petitioner, the 2nd respondent has now attempted to manipulate the records of the comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r and her children have been handed over to the petitioner. The petitioner confirmed that she or her children shall not have any claim in the Company now run by the second respondent. It has to be borne in mind that the petitioner is not challenging the validity of the deed of arrangement and declaration in the present proceedings. Similarly, it is found that the petitioner is not seeking to set aside the deed of arrangement and declaration in the civil suit (C.S. No. 951/2004) instituted before the Madras High Court. Thus, it is far from doubt that the petitioner has not avoided the deed of arrangement and declaration in any forum, but on the other hand reaped the benefits of the deed of arrangement and declaration by unconditionally accepting (i) title deeds of the immovable properties; (ii) a sum of ₹ 15 lakhs as per the schedule indicated in the deed and (iii) 23 LIC policies in full and final settlement of her claim. The petitioner having acted upon the deed of arrangement and declaration is bound to act in accordance with the various terms of the said deed. The petitioner categorically confirmed that she or her children shall not have any claim in the RICHFIELD ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ompany did not issue the share certificates, has not been raised at any prior point of time and is found to be negated by the share certificates issued in the names of the petitioner and her children, copies of which are on record. Though the petitioner has denied the various letters acknowledging receipt of the share certificates (para 5 of rejoinder), yet, I do not see any explanation offered by her on copies of the share certificates produced by the respondents in the names of the petitioner and her children excepting bare denial that the share certificates have not been issued to the petitioner and her children. The contentions of the petitioner that the impugned transfer of shares is not supported by consideration and that it does not satisfy the mandatory requirements of Section 108, as rightly pointed out by Shri Murari, learned Counsel, do not merit any consideration, in view of the fact that the petitioner and the consenting shareholders have relinquished their interest in the Company by unequivocally acting upon the deed of arrangement and declaration. In view of the above facts and the foregoing conclusions, I am of the considered view that the petitioner failed to sa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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