B NAGALAKSHMI Vs. MANNARGUDI TRANSPORTS PVT LTD

JUDGEMENT

(1.) PETITIONER B. Nagalakshmi claiming herself to be a contributory, and therefore a member, file this petition under Secs. 433 (b) and (f) and 439 (1) (c) of the companies Act, I of 1956, asking for the winding up of the company Mannargudi transport (Pvt.) Ltd. The relevant facts are as follows:--

(2.) THE petitioner was originally allotted 125 shares at a meeting held in July 1959; but on 23-7-1960, all the 125 shares of the petitioner were transferred to the 2nd respondent, and thereafter the petitioner ceased to be a member of the company. Her husband Balasubramania Odayar had a total shareholding of 400 shares. It appears that after the death of Balasubramania Odayar there were some disputes about the heirs of Balasubramania Odayar and the petitioner was claiming the entire 400 shares to be transferred in her name. The 2nd respondent who is the mother of Balasubramania Odayar, is also another heir entitled to share in the estate of Balasubramania Odayar. It appears that till now no request has been made to the company for the transfer of the shares with the share certificates, succession certificate and such other document which would enable the Board to take action under the relevant articles of the company. It is also significant to note that under the relevant articles of the company, the company has the right, in case of such devolution of shares on the death of a shareholder, to compel the heirs on production of the certificates of heirship and succession, to sell such shares at a fair market price to the other shareholders of the company without exercising their discretion to transfer the same in the names of the respective heirs who request for such transfer. In other words, the discretion vested in the Board to accept the transfer and the request of the heir of the deceased shareholder, or to compel them under Arts. 15 and 19 to sell the same to the other shareholders of the company at a fair price to be fixed in accordance with the procedure indicated in the said articles are both concurrently envisaged in such articles. In the instant case, however, no application for transfer of the shares in the manner contemplated both in law and under the articles has been made. The net result is that the petitioner's name does not appear in the register of members of the company and the main objection of the respondents in this case is that the petitioner not being a member as on date or as on the date when the petition for winding up was filed, and she not having been registered as such in the register of members, has no locus stand to present this petition and therefore this petition has to be thrown out in limine. The petitioner, of course, has made many allegations against the respondents and the company; to wit, her complaint is that accounts are not properly maintained, no general body meeting is held, no dividends are declared every year, borrowings without authority are being made, the company is sustaining loss, there are internal dissensions amongst the members and finally they say that the minority is oppressed by the majority. The Registrar of Companies has also filed an affidavit and has stated that the 125 shares held by B. Nagalakshmi is shown transferred in the name of C. Mangalam and others in the annual return made up to 14-11-1960 filed under Sec. 159 of the Companies Act, and unqualified reports of the Auditors for the years beginning from 1960 and ending with 1965 have been made and ultimately he leaves it to the Court to pass such orders as may be just and necessary.

(3.) THE main contention of the respondents, therefore, is that this application is not maintainable in law and, therefore, an investigation or a delve into the merits of the case is not necessary. There is force in this contention. If it is ultimately held that the member has no locus standi on the ground that the petitioner's name does not appear in the register of members, then it becomes unnecessary for me to consider the various complaints catalogued by the petitioner and projected in support of her application for winding up of the company.