CAPITAL LAND BUILDING Vs. SHAHEED MEMORIAL SOCIETY

JUDGEMENT

(1.) A dispute between two family groups to control M/s. Capital Land builders Private Limited, appellant No. 1 in FAO (OS) No. 337/2009 (for short the said Company), and consequently deal with valuable land owned by the said company has given rise to a spate of litigation. The present appeals arise from one branch of that litigation. The said Company is stated to have been incorporated in the year 1959 with the object of acquisition of properties, promotion and development of land and building, and other objectives as specified in the Articles and Memorandum of Association. The original authorized capital of the said Company is stated to have been Rs. 1. 00 lakh divided into one thousand equity shares of Rs. 100. 00 each and a paid up capital of rs. 56,000. 00. There were only two original subscribers Shrimati Satya Chowdhry, wife of late Chowdhry Brahm Prakash, the first Chief Minister of Delhi holding ten shares of Rs. 100. 00 each and Mr. Kishor Lal Sachdeva holding five shares. Chowdhry Brahm Prakash is stated to have acquired 500 shares of the Company out of the total share capital of 560 shares in the year 1962 for which three share certificates were issued. In the year 1963 he formed a Society by the name of m/s. Shaheed Memorial Society (Regd.), respondent No. 1 herein, of which he became the President. The 500 shares held by him in the said Company were transferred to the Society of which he continued to be the President till his death. It is the claim of appellants 1 to 4 that in the year 1983 the Society was allotted 150 additional shares by the said Company but during the period 1968-1989 these shares were transferred to different parties leaving the society with no share holding in the Company by the end of the year 1989 and the name of the Society was removed from the register of shareholder of the said Company. In a nutshell the claim of the appellants is that the family of appellants 2 to 4 got the control of the Company and the Company was managed by shri Kishor Lal Sachdeva and his family members. Plaintiffs 3 and 4 claim to have acquired 20 shares each of the Company from the Society in the year 1974 vide share certificate No. 3a (1) (A) and 3a (1) (B) of the Company.

(2.) IT is post the demise of Chowdhry Brahm Prakash in the year 1989 that disputes are stated to have arisen between two family groups and representations were made by the representatives of Chowdhry Brahm Prakash to registrar of Company claiming interest in the said Company through the society.

(3.) IT is in the year 1997 that a Company Petition was filed by respondent no. 1 Society under Section 100 and 111 of the Companies Act, 1956 (hereinafter referred to as the said Act), being Company Petition No. 15/111/1997. The society filed this petition through one Shri Sidharth Chowdhry, respondent no. 7, claiming to be the Secretary of the Society. In that Company petition it was averred that the Society had been formed amongst other objectives for promoting social welfare of the community in the field of health, education, sciences, etc. as also for promoting national integration, socialism, democracry and diffusion of political knowledge. The said Company (respondent no. 1 in those proceedings) was stated to be a private limited Company whose registered office earlier was at Pataudi House, Darya Ganj, Delhi, which was shifted to B-49, Connaught Circus, New Delhi and Society had learnt that the said Company had shifted its registered office at No. 5- A, Doctors Lane, Gole market, New Delhi. Shri Janardhan Rai, respondent No. 2 in those proceedings, was stated to be the Director of the said Company. In para 11 of the petition, the Society averred that a copy of the share certificate in favour of the society issued by the Company was being annexed as Annexure C and that "the original will be shown to the court at the time of hearing". We may note at this stage itself that this original share certificate has not seen the light of the day till the conclusion of the hearing of the present appeal. The application goes on to state that the Society wanted to be better informed about the affairs of the Company and on an inquiry found that no annual returns had been filed for a number of years nor any notice or information had been sent about the holding of a general or special meeting. The Society alleged that it had learnt that the Company had without any cause omitted the name of the Society from the register of members of the Company and the Directors of the Company had transferred the shares belonging to the Society to themselves or their nominees or friends. No proper instrument of transfer duly stamped and executed by or on behalf of the Society is stated to have been delivered to the Company along with the certificate relating to the shares. This transfer is alleged to be irregular surprisingly on the ground that as per Rule 6 of the articles and Memorandum of Association vested in the governing body of the society though it is really a matter of running of the Society and not of the company. No Board resolution is stated to have been passed by the Society for transfer of its shares. The claim was made that the name of the Society should be recorded in the register of the members of the Company for 61 to 560 shares.