MUKUNDLAL MANCHANDA Vs. PRAKASH ROADLINES LTD

JUDGEMENT

(1.) the petitioners seek rectification of the register of members of annulling shares transfer register pursuant to the resolution of the board of directors of the first respondent company dated 31-3-1990. The petitioners also seek the enforcement of the procedure prescribed in article 7 of the articles of association of the first respondent company.

(2.) the share holders of the first respondent company belonged to a family and are inter-related. The share capital is Rs. 50 lakhs consisting of 50,000 shares valued at Rs. 100/- each. The issued share capital is rs.30 lakhs. It is slated that petitioner-1 has 1500 shares and the 2nd petitioner has 743 shares. Petitioners-1 and 2 and the second respondent arc brothers. 4th respondent is the son of the 2nd respondent. 3rd respondent is the son of the 5th respondent. 6th respondent is huf of which the 2nd respondent is the kartha. On 31-3-1990 the board of directors resolved permitting the transfer of certain shares whereby the 6th respondent was permitted to transfer 1318 shares to the 3rd respondent; the 2nd rcspondenl was permitted to transfer 175 and 1628 shares to the 4lh respondent under two transfer deeds. Similarly the 5th respondent was permitted to transfer 900 shares to 3rd rcspondenl. There is also no dispute that these transferees were already share holders of the company as is clear from Annexure-B (list of shareholders filed by the petitioners). The fact that these transferees arc the existing share holders has relevancy while considering the applicability of articles 7 and 8 of the articles of association of the first respondent company. These two petitioners attack the permission for transfer and the consequential transfer of the shares, registered in the register of shareholders on the following grounds:

(3.) it is staled that the 2nd respondent was the managing director of the company and he used his position to have the resolution passed for the transfer in a hurry to meet the situation caused by the issuance of a registered notice by his wife (as per Annexure-H , dated 28-3-1990). In the aforesaid notice the wife of the second respondent claimed the entire shareholding of the 2nd respondent as her streedhana property, i.e., those shares were acquired by the 2nd respondent out of the earnings of the streedhana property and hence belonged to her. The notice is quite lengthy and avers several facts which arc not necessary to be detailed here. By the said notice the wife of the 2nd respondent called upon him to return to her within 15 days her entire streedhana which has been invested in various business. She also revoked all powers and power of attorney executed by her in favour of her husband, including the right of the second respondent to act as kartha of the huf. A copy of the notice was sent to the first respondent company also with a note asking the company not to effect any transfer of the shares etc., held in the name of the 2nd respondent. This notice is dated 28-3-1990 and was issued from New Delhi. It is necessary to note here that, there is nothing to show that the notice was served on the 2nd respondent on 30-3-1990. The petitioners however assert that the said notice was served on the first respondent company on 30-3-1990 and was received by the 2nd petitioner and that he had conveyed the information of the notice to the 2nd respondent on the same date. In the course of the hearing of this petition, a copy of the delivery form of the courier service wherein the signature of the watchman for having received an envelope addressed to the first respondent company on 30-3-1990 was produced (vide annexure-r3 filed along with the objection statement). Further, the notice bears the seal of the company and the signature of the 2nd petitioner. It is also necessary to note here itself that the proceedings of the board's meeting held on 31-3-1990 do not include any reference to the aforesaid notice and the contesting respondents are justified in pointing out that in case really the notice had been served on 30th march, 1990 itself the 2nd respondent who was present as a special invitee, as well as the first petitioner, would have agitated the question before the board or allcasl immediately thereafter. The contesting respondents assert in their objection statement that this notice was delivered to suresh kumar manchanda (2nd petitioner) at his residence and according to the information given to the contesting respondents (rcspondents-2 to 6) the envelope was addressed to the 2nd petitioner and not to prakash roadlines, i.e., the first respondent company. These respondents further pointed out that the notice was received by the company only on 2-4-1990 for which purpose they rely on the copy of the notice filed as annexure-r4 bearing the seal of the company dated 2-4-1990. These respondents assert that the copy of the notice filed as Annexure-H was never served on the company and the copy produced by the petitioners is the one made out of the notice copy available with the petitioners to create an impression that the sale transactions in question were engineered to defeat the claim of the wife of the , 2nd respondent. In the circumstances of the case, I am of the view that the notice issued by the wife of the 2nd respondent was not at all delivered at the company's office by 31-3-1990 and there is nothing on record to infer that the 2nd respondent was aware of the contents of the notice for the purpose of this proceeding. Anyhow, this is not a major question bearing any impact on the ultimate conclusion, necessary to decide the case.