PURAN DEVI Vs. S GURNAM SINGH

JUDGEMENT

(1.) PURAN Devi, petitioner, owns 10 shares of Rs. 100 each fully paid up in New Khalsa Roadways Company (P.) Ltd. She has filed a petition under Section 155 of the Companies Act, 1956 (hereinafter referred to as "the Act"), for the rectification of the register of the company. The company in question was registered as a private limited company on August 24, 1957, with the memorandum and articles of association, a copy whereof is annexure "a" to the petition. The authorised capital of the company was rupees one lakh, which was divided into 1,000 shares of Rs. 100 each. Initially, allotment for shares of Rs. 51,000 was made and subsequently allotment was made for the balance of shares worth Rs. 49,000 on March 5, 1971. Out of the balance of shares worth Rs. 49,000 capital shares allotted to Gurnam Singh; Kanwaljit Singh, Sucha Singh and Inderjit Singh, sons of Sawan Singh, respondents, were to the extent of ten shares each. Sawan Singh, respondent, was allotted another 210 shares and his wife, Chanan Kaur, 172 shares. It has been alleged in the petition that Gurnam Singh, Kanwaljit Singh, Sucha Singh and Inderjit Singh, sons of Sawan Singh, were minors at the time when shares were allotted to them on March 5, 1971, and except Gurnam Singh, the other respondents are still minors. It has been claimed that, according to Article 9 of the articles of association of the company, no share can be allotted to a minor. Hence, the allotment of shares to the four minors made on March 5, 1971, was illegal. It has further been averred in the petition that Sawan Singh and his group consisting of his wife, sons and other relatives, transferred 600 shares to respondents Nos. 5 to 11 without complying with the provisions of Article 21 of the articles of association of the company. It is alleged that Sawan Singh and his relatives did not notify their intention of transferring the shares to the directors of the company nor did the board of directors offer the shares to the existing shareholders of the company including the petitioner and thus it has been claimed that this transfer is in violation of Article 21 of the articles of association. The averments made in the petition have been denied in the written statement filed on behalf of the respondents. A preliminary objection has been taken that petition under Section 155 of the Act is not maintainable. It has been pleaded that the petitioner could move the Civil Court for getting the relief. It is claimed that the rectification petition can only be made to correct an error or defect or mistake and in the present petition the averments made are of invalidity of allotment and transfer of shares ; the said question essentially relates to the civil rights of the parties and, therefore, the petition was not maintainable. As regards merits, the averments made in the petition have been denied. On the pleadings of the parties, the following issues were framed:

(2.) THE petitioner in support of the petition, examined P. W. 1, Naginder Singh, Head Master, Khalsa High School, Baddon, District Hoshiarpur, and P. W. 2, Shrimati Shanti Devi, Head Mistress, to prove the ages of Gurnam Singh, Sucha Singh, Kanwaljit Singh and Inderjit Singh, respondents.

(3.) THE respondents examined Mota Singh (R. W. 1), who purchased 600 shares of the company on May 27, 1971. The only other witness produced by the respondents is Nirwail Singh, who stated that notices regarding the transfer of shares were signed by him and sent to all the shareholders under postal certificates. This witness wanted to produce the postal certificates, but the learned judge recording the evidence refused the said documents to be brought on record as, according to him, the said documents could be manufactured at any time. Issue Nos. 1 and 2