9911796707
TMI Blog2018 (7) TMI 1965X X X X Extracts X X X X X X X X Extracts X X X X ..... stay holding of any Board Meetings of the Respondent No. 1 Company. (iii) To stay holding of any AGM and any Extraordinary General Meeting of the Respondent No. 1 company. (iv) To stay sale or transfer or create any lien/charge/mortgage on the fixed assets (movable and immovable) of R-1 company. (v) To direct the Respondents to maintain the shareholding pattern of the Respondent No. 1 company and also the composition of Board of Directors. (vi) To direct the Respondent No. 2 and Respondent No. 3 to allow inspection of all statutory documents, including bank statements, books of accounts, statutory registers and all other documents as per the legal rights of shareholders and director and also order to provide the authenticated copies of all the records. (vii) To direct that the affairs of the Respondent No. 1 company be managed in the ratio of shareholding pattern. (viii) To direct R-2 and R-3 not to use the R-1 Company's fund for their personal expenses and gains. (ix) To direct that the bank accounts of the Respondent No. 1 company be operated by the petitioners only in future. (x) To direct the investigation into affairs of the Respondent No. 1 company by inde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly, the company allotted further shares worth Rs. 84,00,000/- consisting of 8,40,000 equity shares of Rs. 10/- each. Petitioner No. 3 is holding 3,15,100 equity shares of Rs. 10/- each constituting 37.51% of the entire subscribed and paid-up capital of Nulon India Limited. Yash Golyan-petitioner No. 1 became one of the shareholders during the Financial Year 2011-12. He owned 466600 equity shares of Rs. 10/- each constituting 55.55% of entire subscribed and paid-up capital. This is the disputed shares in the present proceedings. The petitioners jointly hold more than 93% of the entire subscribed and paid-up capital of Nulon India Limited. In support of the aforesaid assertion, reliance has been placed by the petitioners on the Annual Return for the year 2013 and 2014. Respondent Nos. 2 & together hold 1.97% of the entire subscribed and paid-up capital of Nulon India Limited. It is claimed that being a blood relation, the petitioner allowed respondent No. 3, namely Krishan Kumar Golyan, to work as a director of the company who started indulging in illegal activities, which were patently against the interest of majority shareholders. 4. The main objects of the company are as under: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... res of the petitioner illegally transferred in her name. Respondent Nos. 4 & 5 are the Chartered Accountants and Company Secretary, who are alleged to be party to the conspiracy and illegal transfer of shares. 8. The principal issue raised in the present proceeding is whether 466600 equity shares of Rs. 10/- each held by Yash Golyan have been illegally transferred at the instance of Respondent No. 3 & Others to Mrs. Smiti Golyan-respondent No. 2. The petitioner has shown the shareholding before the alleged illegal transfer as on 14.02.2014 and thereafter which reads as under: Sl. No. Name & Address No. of shares % of holding 1. M.P. Golyan (P-2) 34, Western Avenue, Sainik Farm (Earlier known as 171-A, Sainik Farm), New Delhi-110062. 100 0.012 2. K.K. Golyan (R-3) 34, Western Avenue, S ainik Farm (Earlier known as 171-A, Sainik Farm), New Delhi-110062. 15,100 1.79 3. S.D. Golyan (P-3) 34, Western Avenue, Sainik Farm (Earlier known as 171-A, Sainik Farm), New Delhi-110062. 315,100 37.51 4. Smiti Golyan (R-2) 34, Western Avenue, Sainik Farm (Earlier known as 171-A, Sainik Farm), New Delhi-110062. 1,500 0.17 5. Nulon Gl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the petitioners. 12. The petitioner realized that the certificates representing his share capital in respondent No. 1 company were misplaced/lost and in that regard, an email was sent to respondent No. 1 company with a request to issue duplicate share certificates. The petitioner sent several communications through emails, letters and registered post thereby informing the respondents that he had misplaced/lost the original share certificates and requested them for issuance of duplicate share certificates. When no reply was received, the petitioner again sent a reminder mail on 23.02.2015. The company-respondent No. 1 through its official, Mr. Ajay Sharma belonging to Accounts Department sent a reply and required the petitioner to send some documents in order to enable the company to issue the duplicate share certificates. The petitioners sent all the required documents for issuing the duplicate share certificates. One of the required document was to furnish a copy of the FIR giving complete details about the share belonging to the petitioner. It is pertinent to mention that the petitioners have asserted about filing of an FIR concerning the loss/misplacement of articles/documents ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respondent Nos. 2 and 3. However, subsequently revised Annual Return was filed (P-1), which is full of doubts as it contains pages which are not in sequence, some pages bear same numbers followed by unnumbered old page with stapler mark appeared to be taken out of some earlier Annual Return. There are allegations of tampering of signatures and request has been made that respondent be directed to produce the original so that truth of tampering maybe established before this Tribunal. Referring to the reply to the unamended petition, the petitioners have asserted that the written reply was a mockery of all the established principles which refers to allegations of personal data on the part of the petitioners. 15. It is the case of the petitioners that they together hold 93.06% of the entire subscribed and paid-up capital of the company whereas respondent Nos. 2 and 3 together hold 1.97% of the entire subscribed and paid-up capital. Despite the meagre shareholding, the petitioners allowed respondent Nos. 2 and 3 to function as director as they are blood relations. There are further allegations against respondent Nos. 2 &3 with regard to siphoning off funds of respondent No. 1 company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich were borne by respondent Nos. 2 & 3 and on account of feeling of guilt caused by huge losses suffered, petitioner No. 1 gifted the share held by him in two companies, i.e. Nulon India Ltd. and Nulon Global Limited to his mother-respondent No. 2 in January, 2014 on the occasion of silver anniversary celebration of his parents in February, 2014 in Koh Samui, Thailand. To that effect, he informed all the family members that the aforesaid shares were of no use for him as he was not interested in running the affairs of any of the companies. The gifted shares and transferred deed were handedover by petitioner No. 1 to his mother- Smiti Golyan in January 2014 which were sent to respondent No. 1 company towards the end of January, 2014. Eventually, the shares were transferred in her name on 14.02.2014. There were cordial relations between the family members and petitioner No. 1 had joined the silver anniversary celebration of his parents-respondent Nos. 2 & 3 along with his sister Radhima Golyan and four sisters of respondent No. 3 along with their husbands, sister and brother of respondent No. 2 and few friends, who had gone to Koh Samui, Thailand for four nights in February, 2014. He ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... raised. 20. Under the caption 'preliminary objection', it has been asserted that the petition is not maintainable and that there has been no oppression or mismanagement within the meaning of Sections 397 and 398. There are allegations that the petitioner has not come to the court with clean hands and has suppressed material facts. The allegation of fraud cannot be gone into by this Tribunal as it decides the cases by adopting summary procedure. Therefore, the matter required to be adjudicated by a regular Civil Court. Moreover, the matter is pending before the Joint Commissioner of Police, Economic Offences Wing, Mandir Marg, New Delhi and a notice sent to the respondents on 31.07.2015. Reference has been made to a complaint filed by the petitioner alleging offences of cheating and fraud. When the matter is pending before the Economic Offences Wing, then proceeding in the present case cannot be prosecuted. 21. On merit, the allegations of the petitioner that he is a shareholder of respondent No. 1 company and still owns 466600 equity shares of Rs. 10/- each, have been denied along with allegations of connivance. There is no illegal transfer of shares belonging to petition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er favour on 14.02.2014. The story of meeting of Board of Directors including respondent Nos. 2 and 3 by videoconferencing on 14.02.2014 where the transfer of shares took place in favour of respondent No. 2 is stated to be false and concocted. The recording of videoconferencing call is compulsory and respondents have been asked through the NCLT to produce evidence of holding the meeting by video conferencing. 24. The averments made in the petition with regard to approval of Annual Accounts for the Financial year 2013-14 of respondent No. 1 company held on 30.09.2014 have been reiterated and it has been stated that petitioner No. 1 attended the meeting being shareholder of respondent No. 1 company. The corrected annual statement of accounts is all afterthought as the petitioner is shown to be shareholder in the meeting held on 30.09.2014 and the transfer had taken place in the meeting held through videoconferencing on 14.02.2014. If those are the fact then there was no question of reflecting the shareholding of the petitioner in the Annual Accounts and his presence at the Annual General Meeting on 30.09.2014. The averments in the petition with regard to FIR and other things have be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Nos. 1 to 3 and need not be repeated. 29. We have heard learned Counsel for the parties at length and have perused the paper books with their able assistance. 30. Mr. Virender Ganda, learned Senior Counsel has vehemently argued that petitioner No. 1 has been illegally duped by the acts of the respondents inasmuch as his 4,66,600 shares have been illegally transferred to his mother-respondent No. 2. According to the learned Counsel, petitioner No. 1 came to know in February, 2015 that the original share certificates were lost or misplaced and consequently he requested R-1 Company to issue him duplicate share certificates on 19.02.2015 and 23.02.2015. On behalf of the company, Mr. Ajay Sharma vide email dated 25.02.2015 sought some requisite documents from petitioner No. 1 and requested him to file FIR and execute requisite documents for issuance of duplicate certificates. FIR was lodged on 25.02.2015 and then a letter was sent by petitioner No. 1 with requisite documents. Learned Counsel further argued that once in the Balance Sheet and Annual Return for the period ending 31.03.2014 (Annexure P-2), petitioner No. 1 is shown to hold 4,66,600 shares then how in the meeting held on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sel has submitted that in case it is found that there is illegality in transfer of shares then it prima facie amounts to oppression. In that regard, he has placed reliance on the observations made in para 51 of the judgment in the case of Needle Industries (India) Ltd. v. Needle Industries Newey (India) Holding Ltd. [1981] 3 SCC 333, and has argued that this Tribunal must return the finding that there is oppression. 35. Mr. U.K Chaudhary learned senior counsel has vehemently opposed the submissions made on behalf of the petitioner. Learned counsel has argued that the petitioner No. 1 has no locus standi and he has no interest left in the company. According to the learned counsel the petition is not even otherwise maintainable because there are no allegations of oppression or mismanagement within the meaning of Section 397 and 398. It is further submitted that petitioner No. 1 duly gifted the share to his mother-respondent No. 2 Mrs. Smiti Golyan and such a gift has support of law. In that regard reliance has been placed on the observation made by Hon'ble Supreme Court in the case of Vasudev Ramchandra Shelat (supra). According to the learned counsel all the requirements of val ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to the transfer of shares have been levelled which are required to be gone into. Therefore, this objection does not commend itself to us and is hereby rejected. The other objection raised is that the transaction concerning transfer of shares rest between petitioner No. 1 and respondent No. 2 his mother and therefore, by virtue of law laid down by Hon'ble Supreme Court in the case of Chatterjee Petrochem (India) (P.) Ltd. (supra), a petition under Sections 397, 398 and 402 of the Companies Act would not be maintainable. The argument loose sight of that fact that the transfer of share in the present case is stated to have been made by the respondent No. 1 company and this transfer has been reflected in the proposed balance sheet filed before the Registrar of Companies on 25.11.2014. Therefore the role of respondent No. 1 company cannot be denied and the so-called arrangement between petitioner No. 1 and respondent No. 2 cannot be regarded as a private affair between two individuals without the active participation of the company. Hence the judgment of the Hon'ble Supreme Court in the case of Chatterjee Petrochem (India) (P.) Ltd. (supra) would not be applicable and the argu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... echnology. In paras 4, 5 and 6, the following provision has been made:- "4. In the light of the above provisions and circumstances, it is hereby clarified that directors of a company may participate in a meeting of Board/Committee of directors under the provisions of Companies Act, 1956 through electronic mode. For this purpose, the company shall also comply with the following requirements and procedures, in addition to the normal procedures required under the Companies Act, 1956 for holding meetings of Board/Committee of directors:- (a) Electronic mode means videoconference facility i.e. audio-visual electronic communication enables all persons participating in that meeting to communicate concurrently with each other without an intermediary, and to participate effectively in the meeting. (b) Every director of the company must attend the meeting of Board/Committee of directors personally at least one meeting a financial year of the company. (c) The Chairman of the meeting and Secretary shall assume the following responsibilities: (i) to safeguard the integrity of the meeting via videoconferencing. (ii) to ensure proper videoconference equipment/facilities. (iii) to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cipants is required to be maintained. Despite various attempts made for securing the contents of videoconference nothing has been produced. The factum that videoconference for Kou Samui Thailand was booked and the payment for the conference was made has not been brought on record by the respondent which led to an inference that as a matter of fact the meeting of 14.02.2014 has never been held. On facts if there is no meeting then how can transfer of shares could take place on the basis of a doubtful document showing the handingover of the shares and the transfer deeds. The aforesaid inference is further strengthened by the fact that in the Annual General Meeting of respondent No. 1 company held on 30.09.2014 no disclosure was made showing transfer of shares by respondent No. 1 company and respondent No. 2. The annual report in fact was corrected and refiled on 06.12.2014 by reflecting transfer of disputed shares. It is further pertinent to notice that in response to the letter sent by petitioner No. 1, Mr. Ajay Sharma belonging to the accounts department sent a reply requiring petitioner No. 1 to sign some documents in order to enable respondent No. 1 company to issue duplicate sha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... half of the transferor and before any entry is made therein, be presented to the prescribed authority, being a person already in the service of the Government, who shall stamp or otherwise endorse thereon the date on which it is so presented, and (b) every instrument of transfer in the prescribed form with the date of such presentation stamped or otherwise endorsed thereon shall, after it is executed by or on behalf of the transferor and the transferee and completed in all other respects, be delivered to the company,- (i) in the case of shares dealt in or quoted on a recognized stock exchange, at any time before the date on which the register of members is closed, in accordance with law, for the first time after the date of the presentation of the prescribed form to the prescribed authority under clause (a) or within [twelve months] from the date of such presentation, whichever is later; (ii) in any other case, within two months from the date of such presentation." 45. A bare perusal of Sections 108(1) and 108(1A) of the Act reveals that an essential condition for registering transfer of shares is that a duly stamped instrument satisfying the requirements of this provision m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... grafted under section 108 is as under:- "5A. Section 108 - (1) for purposes of clause (a) of sub-section (1A) of section 108, the prescribed authority shall be the Registrar, or such other authority as the Central Government may from time to time appoint in that behalf by notification in the Official Gazette. (2) An instrument of transfer shall be in Form 7-B set forth in Annexure A. [(2A) An instrument of transfer in respect of counter-receipt allowed to be traded by Over The Counter Exchange of India (OTCEI) shall be in Form 7BB.] (3) When an instrument of transfer is presented to the prescribed authority referred to in sub-rule (1), that authority shall forthwith stamp or otherwise endorse thereon the date of such presentation, affix its signature thereto and return the instrument to the party presenting the same: Provided that the said instrument presented in Form 7B as was in force immediately before the 22nd day of April, 1988, the date of commencement of the Companies (Central Government's) General Rules and Forms (Amendment) Rules, 1988, shall be valid, if it is presented and stamped or endorsed by the prescribed authority on or before the 30th day of July, 1988 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sfy the test of a reasonable prudent man. Furthermore, the stamp duty is required to be affixed. It has not been pointed out who amongst transferee and transferor purchased stamp duty and the amount paid for the stamp duty. Even the affidavit of stamp vendor or his register have not been produced. 54. The requirements of proviso are also not satisfied. Primarily the proviso postulates that the Board of director must be satisfied that the instrument of transfer was signed by or on behalf of the transferor and by or on behalf of the transferee. How to prove that the instrument was signed by transferee and transferor or by their agents on their behalf. It could be proved by producing attesting witnesses. In the present case even the duplicate share certificates have not been signed by the petitioner No. 1. The deed of transfer is also not available. The object of producing affidavit of attesting witnesses is to ensure that original existed and it was then lost. As earlier observed that the existence of original has not been prima facie shown. How can there be then satisfaction of the Board of director. They felt easily satisfied as it is a self-serving conduct negated by rudimentary ..... X X X X Extracts X X X X X X X X Extracts X X X X
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