9911796707
TMI Blog2012 (10) TMI 1265X X X X Extracts X X X X X X X X Extracts X X X X ..... Trading Pvt. Ltd., stated to have been owned by the Plaintiff's father. 2. The Plaintiff's father has executed a Will in 2003 bequeathing the shares equally to his two sons the Plaintiff and Defendant No. 1. The defendants claim that the shares are transferred to Defendant No. 2, the wife of Defendant No. 1 in 1999 itself. The Plaintiff has challenged the transfer as fraudulent. The Plaintiff has shown the annual returns of Defendant No. 5 company which shows the transfer effected in the first year of the incorporation of the company itself. The very first annual returns filed under Section 169of the Companies Act shows the transfer executed in the name of Defendant No. 2 of 49000 shares (Whereas 49010 shares were actually transferred). The date of the transfer is not shown in the returns. It is contended that transfer has not taken place between the date of the first AGM and the date of filing of the returns. The date of the filing of the returns is not shown in the returns. All later documents follow therefrom. The Plaintiff has challenged all the documents emanating from the initial transfer. The Defendants have sought to show that the father of the Plaintiff and Defe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... item No. 1 fraudulently and behind the back of the Plaintiff. Defendants 1, 2 and 3 have produced their bank statements showing the amounts paid for the purchase of the flat being Rs. 1.90 Crores. The Defendants have also shown how the amounts came into their bank accounts. Defendant No. 1 claims to have the initial investment made in 2005 from the sale of one Janta Godown which is another property of Plaintiff, Defendant No. 1 and Defendant No. 3 in which the Plaintiff's share has been paid and the share of Defendant No. 1 has been utilized by him for the purchase of the flat. The initial receipt is shown to be invested in HDFC Mutual Funds on 28th February 2005 which is redeemed on 11th April 2006. His investment is out of the cheque amount received from the sale of Janta Godown. The other amounts are contributed by Defendants 2 and 3. These are also shown from their bank accounts. They were also initially invested in HDFC Mutual Funds on 22nd March 2005 which was redeemed on 11th April 2006 and 10th October 2005 which was redeemed on 11th April 2006. The total amount has been invested in the flat on 13th April 2006. 9. The property at item No. 3 is admitted to be the est ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ows a crystallization of the Plaintiff's share at Rs. 5 Crores in 2008. 20. Upon the transfer of item No. 1, Defendants 1, 2 and 3 are stated to have received Rs. 48 Crores in 2010. The Plaintiff's share shown in the family arrangement at Rs. 5 Crores in 2008 would have augmented commensurately. The entire amount payable was payable by the end of the year 2008. Had that amount being paid it would have been invested by the Plaintiff. The Plaintiff's share which is required to be protected pending the suit upon the prima facie case made out by the Plaintiff, which is upon the admission of the execution of the Will by his father and the admitted relationship of the parties, would, therefore, require to be protected pending the Notice of Motion. Hence the properties in Exhibit-C to the plaint must remain protected towards the Plaintiff's share. It may be clarified that though Defendants 1, 2 and 3 have shown their independent right in the property at item No. 2, since these Defendants are prima facie seen to have transferred the property at item No. 1 to the other Defendants under the transaction without bonafide full title, their property at item No. 2 must remain i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e register, is, without sufficient cause, omitted therefrom; or (b) default is made, or unnecessary delay takes place, in entering in the register the fact of any person having become, or ceased to be a member (including a refusal under sub-section (1)) the person aggrieved, or any member of the company, or the company, may apply to the (Tribunal) for rectification of the register. (5).... (6).... 111 (7) On any application under this section, the (Tribunal) (a) may decide any question relating to the title of any person who is a party to the application to have his name entered in, or omitted from the register; (b) generally, may decide any question which it is necessary or expedient to decide in connection with the application for rectification. 24. Mr. Madon on behalf of the Plaintiff argued that Section 10(E)) has been incorporated in the Companies Act by the amending Act, 1988 which came into force on 31st May, 1991. Under the same Act Section 111 also came to be incorporated deleting Sec. 155 which existed prior thereto in Companies Act, 1956. Consequently, since 1991 the Company Law Board (CLB) would have the power under the Civil Procedure Code in re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le is decided as also the question in connection with the fraud which would be the evidence relating to negotiations by the correspondence by the aforesaid E-mails or otherwise between the brothers. The defendants have sold the shares which was the property of defendant No. 5 Company in which the deceased held those shares. 28. Of course, under Sec. 10(E) (4C) and Sec. 111(4) and (7) the tribunal would have otherwise had jurisdiction to add the Plaintiff's name. However, in view of the aforesaid facts the tribunal would have to determine whether the shares were transferred fraudulently to exclude the Plaintiff or even his father. 29. Whether or not the tribunal could go to such extent in such determination was held affirmatively in the case of Public Passenger Service Ltd. v. M.A. Khadar (1966)36 Comp. Case 1: (AIR 1966 SC 489, Full Bench). However it held that jurisdiction which was then with the company court U/s. 155 of the Companies Act, 1956 prior to the aforesaid amendment was discretionary and summary in nature and that the Court could decline to entertain the petitions if they raised dispute and complicated questions requiring evidence. 30. In the case of Stand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ara 26 indicates that in cases such as this the right of the applicant who claims that his name be entered in Register of members of a Company would have to be decided first before such an application is made : In other words, the Court (Company Court/CLB) has discretion to find whether the dispute raised is really for rectification or is of such nature that unless decided first would not come within the preview of rectification. 34. The right of plaintiff to receive his half shares in the estate of the deceased is admitted. What is the entire estate is disputed. That will depend upon whether or not the deceased had himself transferred the shares in his lifetime, so that that legacy had a deemed or whether the deceased held the shares in his name until his death and the purported transfer is forged, antedated and fabricated by Defendant Nos. 1, 2 and 3. After that it decided, the question of rectification would arise and an application could be made. Upon the authorities of Full Bench judgment of the Delhi High Court and Supreme Court (Supra) Justice Rebello, as the Single Judge of this Court, in the case of National Insurance Company Ltd. Vs. Glaxo India Ltd., AIR 1999 Bo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he parties were in correspondence with regard to the sale of the estate of the deceased as reflected in the aforesaid email. The email correspondence which transpired between the parties was between 1st June 2008 to 7th September 2009. The suit has been filed on 13th February 2012. 40. The Defendants 1 to 3 claim that the transfer of shares in 1999 was known to the father as well as the Plaintiff himself and hence the period of limitation runs from the date of the initial transfer from the father to Defendant No. 2 dated 16th August 1999. 41. The Plaintiff has claimed that the effort relating to the transfer of shares of Defendant No. 5 Company initially from the name of the deceased to the name of Defendant No. 2 and later to outsiders upon essentially the sale of the property of the father of the Plaintiff and Defendant No. 1 in item No. 1 of the schedule Exhibit-C to the plaint was brought to his knowledge in January 2012. 42. Mr. Madon himself contends that oral evidence upon the issue of limitation would have to be led. 43. The Plaintiff shall file his affidavit of evidence as also affidavit of documents. 44. The suit is adjourned to 10th December 2012 for consi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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