DEWAN SINGH HIRA SINGH Vs. MINERVA FILMS LTD

JUDGEMENT

(1.) THIS is a petition by Sim Dewan Singh, Director, Minerva Films Limited, made under Section 155 of the Companies Act, 1956 (No. I of 1956) for the- rectification of the register of members by omitting the names of all persons mentioned in anuexures A and B to this petition. The Minerva Films Limited is a public Company and was registered on 8th of February, 1952.

(2.) THE allegations of the petitioner briefly are that he is a holder of 2501-B class shares of the value of Rs. 5/- each, that at a meeting of the Company held on 15th of June, 1932, a resolution was passed requiring the Board of Directors to allot 5000 A class shares which are of Rs. 10/-each. On 16th of August, 1952, at die meeting of the Directors of the Company, 1205 A class shares were allotted. At the meeting of the Directors held on 30th of June, 1953, 1145-A class shares were allotted. On 10th of August, 1953, 90s A class shares were allotted, and on 28th of June, 1955, the Directors again allotted 750 A class shares. On 26th of February, 1956, 2085 A class shares were allotted. Thus up to the coming into force of the New companies Act, 6090 A class shares had been allotted. After 1956 Act became law, 4075 A class shares were allotted on 22-10-1956, 2485 on 24-5-1957 and 600 on 4-7-1957. Thus the total number of A class shares allotted after 15-6-1952 came to 13250 as against 5000 A class shares which the Directors were authorised to allot,

(3.) THE contention of the petitioner is, that the allotments of A class shares at the board Meetings prior to the coming into force of the Companies Act, 1956, were in contravention of Section 105-C of the Indian Companies Act (No. 7 of 1913) and the shares allotted after the coming into force ot the new Act were against the provisions of Section 81 of the Companies Act, 1956. It was urged that under the resolution passed at the share-holders' meeting held on 15th of June, 1952, the directors were authorised to allot 5000 shares of A class of Rs. 10/-each, but the directors actually allotted 13250 such shares and thus acted beyond the scope of their authority. In annexure A to the petition, there is a list of the holders of A class shares who, according to the petitioner, should not have been on the register of members and to whom unauthorised allotments had been made at the meetings of the Board of directors dated 26th of February, 1956, 22nd of October, 1956, 24th of May, 1957, and 4th of July, 1957. It was also maintained that the procedure prescribed in Section 105-C of the old Act and in Section 81 of the new Act had not been followed, and the shares were not offered to the members in proportion to the existing shares held by each member, and notice specifying the number of shares to which each member was entitled, was not given.