T RAJENDRA Vs. ARYABHATTA SOLUTIONS LIMITED

JUDGEMENT

(1.) THIS company appeal arises out of the order, dated 13.12.2013 of the Company Law Board Chennai Bench at Chennai in C.A.No.165 of 2011 in C.P.No.34 of 2011, whereby it has allowed the company application and dismissed the company petition.

(2.) BRIEF facts leading to the filing of this appeal are that the appellants were the Directors of respondent No.1 company. On 30.07.2006, the appellants entered into an agreement with respondent No.2 for transfer of all their shares to him and his relatives. It is the pleaded case of respondent No.2 that in pursuance of the said agreement, 2,50,000 shares were allotted to him and his relatives in the year 2008 and that on 04.02.2008, share transfer deeds were executed in favour of respondent Nos.3 to 5. The appellants have, however, approached the Company Law Board at Chennai, by way of C.P.No.34 of 2011 under Sections 397 and 398 read with Section 111A, 108, 237, 402 and 403 and Schedule XI of the Companies Act, 1956 (for short the Act) for multiple reliefs, the main relief being to declare that the acts of respondent Nos.2 to 6 are prejudicial to the interests of respondent No.1 company and are oppressive against the appellants and to declare that the allotment of 15,59,201 equity shares made on 15.04.2010 to respondent No.2 is illegal and void ab initio and to order consequent rectification of Register of members. Respondent Nos.2 to 6 filed C.A.No.165 of 2011 in C.P.No.34 of 2011 under Sections 399 and 403 of the Act read with Regulations 44 and 47 of the Company Law Board Regulations, 1991 to allow them to raise the issue of maintainability of the company petition as a preliminary issue and dismiss the company petition, and to punish the appellants for contempt for suppressing the material. By order, dated 13.12.2013, the Company Law Board has allowed C.A.No.165 of 2011 and dismissed C.P.No.34 of 2011.

(3.) SHORN of avoidable details, the main plea on which C.A.No.165 of 2011 was filed by respondent Nos.2 to 6 and allowed by the Company Law Board is that in pursuance of the agreement, dated 30.07.2006, all the shares held by the appellants were transferred in favour of the aforementioned respondents and entries in that regard were made in the Company Register and that therefore, the Company Petition itself was not maintainable as the same is not in conformity with the requirements of the provisions of Section 397 read with Section 399 of the Act.