GURNAM SINGH Vs. IDMA LABORATORIES LTD. AND ORS.

JUDGEMENT

(1.) THE present Company Appeal has been filed by invoking the provisions of Section 10F of the Companies Act, 1956 (for short "the Act") against the order dated 4.6.2007 passed by the Company Law Board, whereby the Company Petition filed by the appellant bearing CP No. 7/111 of 2002 under Section 111 of the Act for rectification of the register of the members maintained by the respondent -Company, has been dismissed on the ground of limitation.

(2.) THE appellant, in the petition filed under Section 111 of the Act, contended that he was known to the family of respondent No. 2 -Managing Director and on his representation, agreed to extend a loan of 10,000 ponds valuing approximately Rs. 5,00,000/ - as on that date and it was agreed that the said sum would be in the nature of a deposit for a period of 10 years and would carry interest @ 18% per annum with half yearly rests and accordingly a demand draft bearing No. 011639 dated 16.1.1989 was deposited by the appellant, but the appellant was surprised on receiving a letter dated 22.3.1990, whereby the respondent -company, without there being any application, issued 26,488 shares of Rs. 10/ - each vide share certificate No. 22 -25 for a sum of Rs. 2,64,880/ -. Many correspondence exchanged between the parties, whereby the appellant unequivocally mentioned that he had never agreed to buy the shares, but had given the money by extending the loan and also requested the company to cancel share certificates by causing rectification. Since the respondent -company did not cancel the share nor rectified his register of members, it necessitated the appellant to file a winding up petition in this Court, which was dismissed vide order dated 14.12.2000 and the appeal bearing No. 33 of 2001 filed against the order of the Company Judge was also dismissed on 19.9.2002 and accordingly on 30.9.2002 appellant filed the petition under Section 111 of the Act before the Company Law Board.

(3.) MR . Arun Bansal, learned counsel appearing for the appellant, in support of his grounds of appeal, submitted that the Limitation Act does not apply to the proceedings before the Company Law Board under Section 111 of the Act for seeking rectification of the register of members and if at all the petition was filed with delay and latches, the Company Law Board has inherent powers to condone the delay as the petition, on merits, was found to be on sound footing. He further submits that the shares could not be allotted to the appellant without any application made by him. He, in support of his contentions, relied upon the following judgments: - -