MAHENDRA KUMAR JAIN Vs. FEDERAL CHEMICAL WORKS LTD

JUDGEMENT

(1.) THIS is an application under Section 155 of the Companies Act, 1956, for the rectification of the share register of the Federal Chemical Works, Ghaziabad (hereinafter called the company).

(2.) THE company was incorporated as a private limited company in 1936. In December, 1944, it was converted into a public limited company. THE registered office of the company is at Ghaziabad.

(3.) THE company appears to be a family concern, the shareholders being confined to the petitioner's father, mother, his brothers and their wives. THEse shareholders have been impleaded as parties to this petition and they have filed a counter-affidavit. It is averred that the shares which the petitioner now claims to be his were initially acquired in the years 1945 to 1947 by Sri Mitter Sain Jain, the petitioner's father. At that time the petitioner was a minor and was only a benamidar of Sri Mitter Sain Jain. THE shares were partly paid up at that time. A large sum of money had yet to be paid for them. THE petitioner was not willing to continue to be liable for their payment and as such the petitioner voluntarily transferred the shares at the suggestion of Sri Mitter Sain Jain to respondents Nos. 2 to 6 who are the petitioner's mother and brothers, etc. It is also alleged that the petitioner was a director of the company since 1947 to 1956. He was also the manager of the company and that he attended the meeting of the board of directors of the company held on September 9, 1950, at which the transfer of shares by the petitioner to respondents, Nos. 2 to 6 was approved. It is also suggested that the petitioner was in active management of the company till 1956 and he had access to the books of the company. THE allegation that he did not know of the transfers of the shares in favour of respondents Nos. 2 to 6 till December, 1963, is characterized as false. It is stated that the petitioner knew of the transfer in December, 1950, as he attended the meeting of the board of directors held on September 9, 1950.