9911796707
TMI Blog2023 (4) TMI 450X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the Petition filed under the Companies Act, 2013. 2. The 1st, 2nd & 3rd Appellant have claimed to be 'Shareholders' of the 1st Respondent Company with alleged holding together 94.80% of total paid up share capital of 1st Respondent. M/s Lexus Technologies Pvt. Ltd. is a 1st Respondent/ Company incorporated on 28.03.2000, with an authorised share capital of Rs. 1,50,00,000/- divided into 15,00,000 shares of Rs. 10 each and paid up capital of Rs. 1,10,96,230/- divided into 11,09,623 shares. The company is in business of developing software solutions and other ancillary activities. The 2nd, 3rd & 4th Respondents are Directors of the 1st Respondent Company. 3. Heard the Counsel for the Parties and perused the records made available including cited judgments of the Hon'ble Supreme Court of India and earlier orders of this 'Appellate Tribunal'. 4. The Counsel for the Appellants submitted that on 09.03.2004 the 2nd Respondent had entered into a share purchase agreement with Mr. C. Suresh (the Erstwhile Shareholder of the Company) and had acquired 10,51,933 equity shares representing 94.8% of the equity share capital of the company. Subsequently, the '2nd & 3rd Respondent' were app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpanies Act, 2013 as the '1st Respondent' company did not file the 'Annual Returns and Financial Statements' for the continued period of 2014-2015, 2015-2016 and 2016-2017. 10. The Counsel for the Appellants further submitted that in 2017, they searched on the Ministry of Corporate Affairs Portal (in short 'MCA portal') and found out that the '2nd, 3rd & 4th Respondents' submitted fabricated Annual returns for the Financial Year 2014-2015, 2015-2016 and 2016-2017 of the '1st Respondent' Company with the Registrar of Companies. The Counsel for the Appellants stated that at that stage, they came to know for the first time that the 2nd, 3rd & 4th Respondents were committing fraud. The Counsel for the Appellants further stated that subsequently, the 2nd, 3rd & 4th Respondents were disqualified from the position of Directors of the 1st Respondent Company by virtue of Section 164 of the Companies Act, 2013 for committing fraud. 11. The Counsel for the Appellants brought out to the notice of this 'Appellate Tribunal' that despite various submissions made by the them, neither the 'Tribunal' directed the 'Respondents' nor the 'Respondents' themselves provided to the 'Appellants' with a co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the 'Respondents' did not write any letter to the Board of Directors of the 1st Respondent and there was no need for the 'Respondent' to write any such letter as the 'Respondents' did not intend to sell his shares to any person. As the 'Respondent' did not write any letter, the question of willingness to purchase by the 'Appellants' would not arise at all. 18. The Counsel for the 1st Respondent submitted that the certificates of banks filed by the 'Appellant' with the Company Petition is not towards any sale consideration for shares but for other reasons not connected to this case. 19. The Counsel for the 1st Respondent stated that the 'Appellants' failed to produce the original 'Transfer Deeds' and Share Certificates before the 'Tribunal' and the 'Tribunal' rightly observed in the 'impugned order' that no transfer of shares ever took place. 20. The Counsel for the 1st Respondent emphasised that the name of the company was restored by the 'Tribunal' and the status of the '1st Respondent' Company as on date in the Ministry of Corporate Affairs poral is "Active". 21. The Counsel for the 1st Respondent submitted that it is trite law that it is for the 'Appellants' to prove their c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... left open as blank. The Counsel for the 1st Respondent stated that this indicates that these forms were never delivered to the '1st Respondent' Company and further no reliance is placed on record by the 'Appellants' to say that the Share Transfer forms (SH-4) is delivered to the Company as per Section 56 of the Company Act , 2013. 25. The Counsel for the 1st Respondent submitted that as per law and practice after execution of proper instrument of transfer with all particulars of transferor and transferee, the responsibility cast upon the transferor or transferee to deliver the said instrument to the Company within a period of 60 days from the date of execution along with the certificate relating to the securities for the company to process the same as per Section 58 of the Companies Act, 2013 and no such material is placed on record by the 'Appellants' to establish that the 'Appellants' complied with Section 56 of the Companies Act, 2013. 26. The Counsel for the 1st Respondent stated that a private company limited by shares in pursuance of the powers conferred to it under its articles or otherwise, if refuses to register the transfer of, or the transmission by operation of law of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellant' to are fabricated and the 2nd Respondent also stated that he has not alienated his shares either to existing members or to non-member of the Company. 31. The Counsel for the 1st Respondent stated that the 'Appellants' are not shareholders at all of the Company and further argued that assuming without conceding that if the 'Appellants' considers themselves as 95% shareholders of the 1st Respondent they should have not waited for more than three years to raise alleged objection before the company and the 'Appellants' never raised the alleged objection with the company. The Counsel for the 1st Respondent further stated that the 1st Respondent except acquiring valuable land no other business is carried after its incorporation. 32. The Counsel for the 1st Respondent submitted that the 'Appellants' herein have not placed any documentary to evidence establish that the 'Appellants' contacted the company or any other directors of the company. 33. The Counsel for the 1st Respondent submitted the underlying proceedings are barred by limitation. Pursuant to section 433 of the Companies Act, 2013 read with Article 113 of Limitation Act, 1963, the period of limitation is three years. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Company Petition. ii. There are certificates without corresponding transfer deeds and transfer deeds without corresponding share certificates. iii. There are several photocopy transfer deeds even without execution by the transferee. iv. That the said deeds do not satisfy the tenets of section 56 of the Companies Act, 2013. v. The transfer deed does not contain any share certificate no. It is mandatory to enclose share certificates. vi. The 'Appellants' fail to explain how they paid stamp duty without even having an agreement to acquire shares from the 'Respondents' as there was no agreement regarding share purchase between the 'Appellants' and the 2nd Respondent. 38. The Counsel for the 2nd Respondent submitted that the transfer deeds that annexed with the appeal are fabricated as can be easily demonstrated by a bare perusal wherein, the company's acknowledgement column is no where endorsed, no one from company signed or checked or tallied the signature of transferor, no transfer number provided, approval dated not provided, this itself proves these share transfers were not lodged with the company. Since the share transfers are not lodged within time prescribed u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. The Counsel for the 2nd Respondent submitted that the 'Appellants' who had prayed for rectification of members' register cannot allege oppression and mismanagement for a very simple reason that they are not members of the company as per their own submission. 43. Concluding the arguments on behalf of the 1st and 2nd Respondents, the Counsel for 1st and 2nd Respondents reiterated that the 'Appeal' is mischievous, misleading, far from truth and devoid of any merits and need to be set aside. 44. This 'Appellate Tribunal' has carefully examined the 'impugned order' dated 21.08.2021. The 'Tribunal' has decided the original Petition on five grounds, namely:- (i) Whether the Petition filed is well within the time. (ii) Whether purported transfer of shares is in accordance with the provisions of the Companies Act and in accordance with clauses of the Articles of Association. (iv) Whether the amount purportedly paid should be treated as consideration to the shareholders of the Company, by the Petitioners. (v) Whether the share certificates purportedly issued to the Petitioners are genuine. (vi) Whether any relief can be granted to the Petitioners or whether the petition is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r in the company in the case of a company having no share capital, other than the transfer between persons both of whose names are entered as holders of beneficial interest in the records of a depository, unless a proper instrument of transfer, in such form as may be prescribed, duly stamped, dated and executed by or on behalf of the transferor and the transferee and specifying the name, address and occupation, if any, of the transferee has been delivered to the company by the transferor or the transferee within a period of sixty days from the date of execution, along with the certificate relating to the securities, or if no such certificate is in existence, along with the letter of allotment of securities: Provided that where the instrument of transfer has been lost or the instrument of transfer has not been delivered within the prescribed period, the company may register the transfer on such terms as to indemnity as the Board may think fit. (2) Nothing in sub-section (1) shall prejudice the power of the company to register, on receipt of an intimation of transmission of any right to securities by operation of law from any person to whom such right has been transmitted. (3) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny under its articles or otherwise, to register the transfer of, or the transmission by operation of law of the right to, any securities or interest of a member in the company, it shall within a period of thirty days from the date on which the instrument of transfer, or the intimation of such transmission, as the case may be, was delivered to the company, send notice of the refusal to the transferor and the transferee or to the person giving intimation of such transmission, as the case may be, giving reasons for such refusal. (2) Without prejudice to sub-section (1), the securities or other interest of any member in a public company shall be freely transferable: Provided that any contract or arrangement between two or more persons in respect of transfer of securities shall be enforceable as a contract. (3) The transferee may appeal to the Tribunal against the refusal within a period of thirty days from the date of receipt of the notice or in case no notice has been sent by the company, within a period of sixty days from the date on which the instrument of transfer or the intimation of transmission, as the case may be, was delivered to the company. (4) If a public company wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned by the party aggrieved. (3) The provisions of this section shall not restrict the right of a holder of securities, to transfer such securities and any person acquiring such securities shall be entitled to voting rights unless the voting rights have been suspended by an order of the Tribunal. (4) Where the transfer of securities is in contravention of any of the provisions of the Securities Contracts (Regulation) Act, 1956, the Securities and Exchange Board of India Act, 1992 or this Act or any other law for the time being in force, the Tribunal may, on an application made by the depository, company, depository participant, the holder of the securities or the Securities and Exchange Board, direct any company or a depository to set right the contravention and rectify its register or records concerned. CHAPTER XVI PREVENTION OF OPPRESSION AND MISMANAGEMENT 241. Application to Tribunal for relief in cases of oppression, etc.- (1) Any member of a company who complains that- (a) the affairs of the company have been or are being conducted in a manner prejudicial to public interest or in a manner prejudicial or oppressive to him or any other member or members or in a manner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case and record a decision as to whether or not such person is a fit and proper person to whole the office of director or any other office connected with the conduct and management of any company. (4) The person against whom a case is referred to the Tribunal under sub-section (3), shall be joined as a respondent to the application. (5) Every application under sub-section (3)- (a) shall contain a concise statement of such circumstances and materials as the Central Government may consider necessary for the purposes of the inquiry; and (b) shall be signed and verified in the manner laid down in the Code of Civil Procedure, 1908 (5 of 1908), for the signature and verification of a plaint in a suit by the Central Government.] 242. Powers of Tribunal.- (1) If, on any application made under section 241, the Tribunal is of the opinion- (a) that the company's affairs have been or are being conducted in a manner prejudicial or oppressive to any member or members or prejudicial to public interest or in a manner prejudicial to the interests of the company; and (b) that to wind up the company would unfairly prejudice such member or members, but that otherwise the facts would just ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ribunal may direct; (l) imposition of costs as may be deemed fit by the Tribunal; (m) any other matter for which, in the opinion of the Tribunal, it is just and equitable that provision should be made. (3) A certified copy of the order of the Tribunal under sub-section (1) shall be filed by the company with the Registrar within thirty days of the order of the Tribunal. (4) The Tribunal may, on the application of any party to the proceeding, make any interim order which it thinks fit for regulating the conduct of the company's affairs upon such terms and conditions as appear to it to be just and equitable. [(4-A) At the conclusion of the hearing of the case in respect of sub- section (3) of section 241, the Tribunal shall record its decision stating therein specifically as to whether or not the respondent is a fit and proper person to hold the office of director or any other office connected with the conduct and management of any company.] (5) Where an order of the Tribunal under sub-section (1) makes any alteration in the memorandum or articles of a company, then, notwithstanding any other provision of this Act, the company shall not have power, except to the extent, if ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... obtained the consent in writing of the rest, may make the application on behalf and for the benefit of all of them 248. Power of Registrar to remove name of company from register of companies. - (1) Where the Registrar has reasonable cause to believe that- (a) a company has failed to commence its business within one year of its incorporation; (or) [***] (c)a company is not carrying on any business or operation for a period of two immediately preceding financial years and has not made any application within such period for obtaining the status of a dormant company under section 455, (d) the subscribers to the memorandum have not paid the subscription which they had undertaken to pay at the time of incorporation of a company and a declaration to this effect has not been filed within one hundred and eighty days of its incorporation under sub-section (1) of section 10-A; or (e) the company is not carrying on any business or operations, as revealed after the physical verification carried out under sub-section (9) of section 12,] he shall send a notice to the company and all the directors of the company, of his intention to remove the name of the company from the register o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y dissolved under sub-section (5), shall continue and may be enforced as if the company had not been dissolved. (8) Nothing in this section shall affect the power of the Tribunal to wind up a company the name of which has been struck off from the register of companies." (emphasis supplied) 47. It is the case of the 'Appellants' that the 2nd Respondent was in need of the money and requested the 'Appellants' herein to take over the company by way of acquisition of 10,51,933 equity shares from 2nd Respondent for consideration of Rs. 14,67,41,557/-. The 'Appellants' submitted that they gave the money to the 'Respondents' and the 'Respondents' issued Share Certificate dated 18.04.2015 duly executed as per Section 46(1) of the Companies Act, 2013 r/w Companies (Share Capital and Debentures Rules, 2014). 48. It is further the case of the 'Appellants' that due to their long relationship with the 'Respondents', the 'Appellants' had full trust and never doubted any wrong doing on the part of the 'Respondents'. The 'Appellants' interest was only in successful running of the company and under this good faith assumption never cross checked regarding any other aspects. However, during 2017 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he instructions of Mr. Lingamaneni 1. 18.04.2015 Swarna Bhaskar H 7,50,00,00 2. 18.04.2015 Venkata Surya R 1,50,00,000 9,00,00,000 First of all, the money has not been transferred by the 'Appellants' in favour of the 'Respondents'. Secondly, as admitted in the averments as well as recorded clearly in the 'impugned order' that, Mr. Linganameni Ramesh gave Rs. 14,67,41,557/- and took back Rs. 9 Crores from the 'Respondents' as such prima-facie this does not seem to be a clear transaction of payment of money towards acquisition of shares and consequently allotment of shares in favour of the 'Appellants' is also not established. 52. As regard, the point of limitation, this 'Appellate Tribunal' we have carefully perused the recording in the 'impugned order' and note that the 'Tribunal' has held that alleged transfer of shares in favour of the 'Appellant' herein was claimed to be on 18.04.2015, whereas, the Petition was filed before the 'Tribunal' on 09.11.2018 which is beyond three years and as per Article 113 of the Limitation Act, 1963 the limitation period is only three years. This 'Appellate Tribunal' do not find any error in the 'impugned order'. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e/ Transferee. Moreover, both the 1st Respondent Company as well as 2nd Respondent and alleged transferor of shares had denied any such events. In fact, the 2nd Respondent has categorically stated that he had neither intention of selling or transferring of any share nor did he transfer any share. 55. This 'Appellate Tribunal' also observed that there is no communication between the 'Appellant' herein and the Respondent herein during the relevant period of alleged dates of transfer of shares in the year 2015 and immediately thereafter and in absence of any concrete trail of suitable communications between the various parties involved, it is difficult to believe that indeed such transaction took place which establishes the right to claim said shares by the 'Appellants'. 56. This 'Appellate Tribunal' further finds it surprising that although the Appellants is claiming to hold 94.8% of Share Capital of the 1st Respondent Company, yet they did not bother to take over the management and control of the 1st Respondent Company. It is natural and established commercial prudence that person holding the majority of share will have dominating position in composition of Board of Directors of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
