9911796707
TMI Blog2004 (4) TMI 631X X X X Extracts X X X X X X X X Extracts X X X X ..... ares of Rs. 100/- each and claiming to be entitled for further 2455 equity shares, have filed this petition challenging the allotment of further shares by the company on the ground that by the fresh issue of shares they have been reduced to a minority. 2. The facts of the case are that the company was incorporated in 1981. The paid up share capital of the company as on 31.3.2001 consisted of 4135 equity shares of Rs. 100/- each. The husband of the 1st petitioner, namely, Shri Vinod Kumar Pathak who was the Managing Director of the company held 2455 shares and the petitioner among themselves held 610 equity shares. Thus the petitioners' group held majority shares in the company. Shri Vinod Kumar Pathak expired on 10th December, 2001. He ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed. 4. Shri Ganda appearing for the petitioners submitted: The company is a family company. Shri Vinod Kumar Pathak was running a business in the name of M/S Expo Impo Linkers as a sole proprietorship and the main object of the company was to take over the business of M/S Expo Impo Linkers. The company was carrying on the business of manufacturing and disposing of leather goods and garments till 1998 when it diversified into real estate business, in addition. The company owns a property consisting of 9 flats in Mangolpuri, Delhi. Since late Vinod Kumar Pathak migrated to Canada along with his family, he handed over the management of the company to his father and brothers (respondents 2 to 4 ) giving them a nominal shareholding. Late Vinod ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as already effected the transmission and the petitioners have also been taken on the Board of the company now. As far as the allotment of further shares is concerned, it was done with the knowledge and consent of late Vinod Kumar pathak. In a Board Meeting held on 2nd Feb. 2001 which was attended by Vinod Kumar Pathak, the financial position of the company was discussed. Late Vinod Kumar Pathak informed the Board his inability to infuse further capital into the company and requested 3rd and 4th respondents to contribute in the equity share capital either by themselves or through their relatives. Accordingly, a resolution was passed authorizing these two respondents to mobilize funds for the share capital. In a Board Meeting held on 15th Jul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5.7.2001 are forged. 7. The learned counsel for the respondents submitted that the deceased had the habit of signing in as Vinod, Vinod Kumar and Vinod Kumar Pathak. Even in the same style of signatures, there are variations. Therefore, just because he has signed in the Minutes as Vinod Kumar Pathak, it cannot be considered to be forged. 8. It is settled law that while issuing further shares, the Board of Directors discharge their fiduciary responsibilities. If the shares are issued with the sole object of creating a new majority or with the view to convert a majority into a minority, then the action of the Board is not only in breach of the fiduciary responsibilities but also a grave act of oppression against the existing majority. In th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the basis for comparison purposes. Accordingly, they were submitted to the handwriting experts for verification with the signatures on the Minutes. 9. The hand writing experts have submitted their reports. While Pt. Ashok Kashyap has categorically opined that the signatures in the minutes dated 16.2.2001 and 15.7.2001 are forged, Shri Lal has opined that due to inadequate standard signatures for the purpose of comparison and due to the fact that certain similarities are also being found, it is not possible to give any definite opinion but he was definite in his opinion that the questioned signatures are not having any symptom of forgery. When the reports were made available to the parties, the respondents filed an application challenging ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of funds to the extent of Rs. 3.2 lakhs to allot 1600 shares to the wives of the 3rd and 4th respondents. The very fact that the Return of allotment was filed only on 25th January 2002, that is after the demise of Vinod Kumar Pathak, would also raise a doubt as to whether the said allotment was made on 5.11.2001. While it is the prerogative of the Board to allot shares, the power should be exercised in the interest of the company and not for any ulterior purpose. In the present case, by this allotment, the existing majority has been converted into a minority and a new majority has been created in favour of the respondents, which is a grave act of oppression and is an act in breach of the fiduciary duties of the directors. Thus, taking into ..... X X X X Extracts X X X X X X X X Extracts X X X X
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