VIDYASAGAR COTTON MILLS LTD. Vs. MT. NAZMUNNESSA BEGUM

JUDGEMENT

(1.) THIS is an application for a certificate under Article 133(1) of the Constitution in respect of a decision of a Division Bench of this Court dated the 18th July, 1963 dismissing an appeal preferred against an order of the learned Company Judge directing rectification of the Share Register of the appellant company dated the 8th September, 1961.

(2.) THE petitioner Vidyasagar Cotton Mills Ltd. was incorporated in or about the year 1932 under the Indian Companies Act and it has its registered office at Sodepur in the District of 24 Parganas in West Bengal. The authorised capital of the company is Rs. 25,00,000/ - divided into five thousand seven per cent Cumulative Preference Shares of Rs. 100/ - each and two lakhs Ordinary Shares of Rs. 10/ - each. The Subscribed capital of the Company is Rs. 8,18,570/ -At all material times the Company has been managed by its Managing Agents United Commercial Agency Private Ltd. One Mohammad Bashir was the holder of 11,825 fully paid -up Ordinary Shares and 591 fully paid -up Cumulative Preference shares of the Company and he was registered as such in the books of the Company. Mohammad Bashir died intestate on the nth March, 1960 leaving the respondent Nazmunnesaa his sole widow, one son namely Mohammad Riaz and several married and unmarried daughters. On 14th March 1966 Nazmunnessa was appointed Managing Director of the Managing Agents 'United Commercial Agency Private Ltd., and on the 17th March 1960 Nazmunnessa was co -opted as a Director of the petitioner Company in the place of Mohammad Bashir deceased. On 16th December 1960 Nazmunnessa applied to this Court for grant of Letters of Administration of the property and credits of Mohammad Bashir deceased including 11,825 fully paid -up Ordinary Shares and 591 fully paid -up seven per cent Cumulative Preference Shares standing in the name of Mohammad Bashir in the Register of the petitioner Company. On 24th December 196o the petitioner Company's Directors including Nazmunnessa resolved to hold the annual general meeting of the Company on 9th February 1961 and a notice was issued for the holding of such annual general meeting. On the same date the Board of Directors also passed an order directing the Share Register of the Company to be closed. On 29th December 1960 a letter was written by one Manzoor Ahmed, the son of Abdul Hakim the brother of Mohammad Bashir, stating that he was a co -sharer in respect of the shares standing in the name of Mohammad Bashir and requesting the Company to register his name to the extent of his interest therein. On the 20th January 1961 this Court granted Letters of Administration to Nazmunnessa Begum and on the same day the Solicitors of Nazmunnessa Begum wrote to the petitioner Company to insert the name of Nazmunnessa in the Share Register of the Company as the holder of the shares in the place and stead of Mohammad Bashir. The application for rectification of the Register along with other documents were received by the Company on 21st January 1961 which was a holiday on account of Saraswati Puja and the registered office of theCompany was closed on that day. As 22nd and 23rd January 1961 were also holidays being Sunday and Netaji's birthday, a meeting of the Board of Directors of the Company was purported to be called on 24th January 1961 to be held at 11 a.m. on 25th January 1961 for the purpose of considering the application for certification (sicrectification?) of the Share Register of the petitioner Company. The meeting held on 25th January 1961 however did not prove to be effective and Nazmunnessa was unable to obtain rectification of the Share Register. It appears that from 26th January 1961 to 9th February 1961 the Share Register of the Company remained closed. On 28th January 1961 the petitioner Company wrote to the Solicitors of Nazmunnessa that her application for rectification would be placed at the next meeting of the Board of Directors and information was also given in this letter that the Share transfer Book of the Company had beenclosed from 26th January, to 9th February 1961as the annual general meeting of the company was due to be held on the 9th February. Prior to that on the 27th January 1961 the petitioner company had received another letter from Manzoor Ahmed asserting his right as a co -sharer in respect of the shares of Mohammad Bashir and requesting the Company to register his name to the extent of the interests in the said shares. On the 3oth January 1961 Nazmunnessa Begum madean application to this Court under Section 155 of the Companies Act, 1956 for rectification of the Share Register of the petitioner company. On8th February 1961 the learned Company Judge, S. P. Mitra, J. passed an order restraining thecompany and its Directors from holding the annual general meeting on the 9th February except for the purpose of adjourning the same and directed the company to hold a meeting of its Board of Directors on 14th February 1961 for considering the application of Nazmunnessa for rectification of the Share Register and for taking a final decision thereon and also gave direction for filing offarther affidavits. An appeal was taken by the company from this order of S. P. Mitra, J. but the same was dismissed. From the further affidavits which were filed pursuant to the order of S. P. Mitra, J. dated 8th February, it appears that Manzoor Ahmed had made an application on the 14th February for revocation of the grant of Letters of Administration which was obtained by Nazmunnessa in respect of the estate of Mohammad Bashir deceased. On the same date (14th February 1961) a meeting of the Board of Directors was held pursuant to the order dated 8th February and it was resolved that the application of Nazmunnessa be adjourned till the decision of the Court in respect of Manzoor Ahmed's application for revocation of the Letters of Administration. On 10th April 1961 the application of Manzoor Ahmed for revocation of the Letters of Administration was dismissed by 'Mallick, J. and on 24th April 1961 another application by Manzoor Ahmed for being added as aparty to the application of Nazmunnessa for rectification of the Share Register was dismissed bythe learned Company Judge. On the 8th September 1961 the application of Nazmunnessa for rectification or the Share Register was allowed by S. P. Mitra. J. and the Court directed rectification by inserting the name of Nazmunnessa as holder of the shares standing in the name of Mohammad Bashir in the place and stead of the deceased. S. P. Mitra, J. inter alia held:

(3.) THE principal points which the petitioner intends to urge before the Supreme Court relate to interpretation of the scope and effect of Section 155 of the Companies Act, 1956 and also the said Act as amended by the Companies Amendment Act, 1960 read with Section 41 of the said Act and Section 111 of the said Act. The other point which the petitioner company intends to agitate before the Supreme Court is that the Division Bench was not justified in taking into consideration the events subsequent to the presentation of the petition for rectification and in any event, the Division Bench was not justified in considering some of such subsequent events and in ignoring other relevant subsequent events disclosed in the further affidavits.