FARHAT SHEIKH Vs. ESCMAN METALO CHEMICAL PVT. LTD.

JUDGEMENT

(1.) THE relief as envisaged under Section 155 of the Companies Act, 1956, is discretionary in nature. This discretion, however, cannot be termed to be an uncontrolled one but can only be exercised in accordance with the known principles of justice, equity and fairplay and as such refusal to interfere in terms of the provisions of Section 155 can only be had where the facts do not justify the same. In other words, the law court while considering the matter for rectification within the meaning of Section 155 of the Act ought always to consider the facts and circumstances of each matter and on the basis thereof, come to its conclusion.

(2.) AT this juncture, however, it would be convenient to briefly narrate the facts. The petitioner admittedly was the recorded shareholder of 975 equity shares of Rs. 100 each fully paid up and the annual return filed by the company up to June, 1984, records the petitioner's name as the registered shareholder of 975 equity shares of Rs. 100 each.

(3.) ADMITTEDLY , the company being respondent No. 1 is more or less a family concern and the above noted 560 equity shares were originally standing in the name of the deceased father of the petitioner herein and after the death, the shares were transferred to the petitioner as evident from the annual return up to June, 1984, Respondent No. 2 through his constituted attorney, however, in the counter -affidavit stated : 'The petitioner has suppressed from this hon'ble court the fact that after the death of her father, Sk. Mohd. Naqi, and thereafter, after the death of Ms. Qumar Naqi, there was a family settlement and/or arrangement and/or understanding between the members of the family with regard to various properties and assets belonging to them and/or their predecessor in interest and in pursuance of such settlement and/or arrangement, it was decided that 560 equity shares bearing Nos. 4531 to 4560, 5046 to 5135, 5541 to 5790, 5881 to 6000 in the company should be transferred by her to respondent No. 2 for a consideration of Rs. 19,880. In implementation of the said family settlement and/or arrangement with the consent and approval of the petitioner, Sk. Mohd. Naqi, my father and her duly constituted attorney, duly executed a deed of transfer of the said shares in favour of respondent No. 2 and received consideration money therefor against delivery of the share scrips by virtue and on the strength of a duly registered general power of attorney granted by the petitioner in his favour. Pursuant to the said transfer respondent No. 2 lodged the said shares for being transferred by the company, by deleting therefrom the name of the petitioner and inserting therein the name of respondent No. 2 in place and stead thereof. Similarly, thereafter, the company having considered the said document at a meeting of its board of directors held on October 18, 1984,resolved to register the transfer of the said share in the name of respondent No. 2.'