OM PRAKASH BALDEV KRISHAN Vs. UJJWAL SARIN

JUDGEMENT

(1.) The respondent herein had filed a petition under Sections 397 & 398 of the Companies Act, 1956 (hereinafter referred to as `the Act') against the appellants herein before the Company Law Board (for short `the CLB") alleging oppression and mismanagement. By the impugned order dated 22nd August, 2003, two directions which are given are not palatable to the appellants and, therefore, they have filed this appeal. These directions are :

(2.) I may state at the outset that basic objection of the company for non-transmission of these 1000 shares in favour of the respondent was that `no objection' certificate from the daughters of the deceased (sisters of the respondent) was not submitted. During the proceedings that certificate is also submitted and, therefore, on 25th August, 2004, learned senior counsel for the appellants made a statement that in so far as transmission of these 1000 shares in favour of the respondent is concerned, needful would be done. Therefore, it is not necessary to discuss the legality of this direction by the CLB. However, some aspects of this issue will have to be discussed to the extent they have bearing on the second direction. Before, I deal with the validity of the second direction, it would be appropriate to take stock of the basic factual matrix of the matter.

(3.) The company was incorporated in the year 1972 with the main objective to acquire land for the construction of multi-storeyed building and to licence flats therein on suitable terms and conditions and to carry on the business in real estate and properties of all kinds. The promoters were (Late ) Sh.Om Prakash and Sh.B.K.Abbi and their family members. (Late ) Sh.Om Prakash and Sh.B.K.Abbi were the brothers. (Late ) Sh.Om Prakash and his wife subscribed 1000 shares each. Sh.B.K.Abbi, his wife and son also subscribed 1000 shares each. Thus family of (Late ) Sh.Om Prakash had 2000 shares and the family of Sh.B.K.Abbi had 3000 shares. The two groups were accordingly having shareholdings in the ratio of 40:60. The respondent is the son of (Late ) Sh.Om Prakash. Wife of (Late ) Sh.Om Prakash (mother of respondent) died on 1st January, 1987 and her 1000 shares were transmitted in favour of the respondent in the year 1987 itself. Thereafter, Sh.Om Prakash also died on 5th June, 1991. At that time the respondent was 16 years of age and, thus, a minor. He pursued his studies and completed his Chartered Accountancy course in May, 2000.