PERENNIAL TRADING (P.) LTD. Vs. PANKAJ EXTRUSIONS LTD.

JUDGEMENT

(1.) THE present petition is filed under section -11(4)(a)(ii) of the Companies Act, 1956 ('the Act') seeking directions to the respondent -company to cancel the transfer entries in the name of R3 for 7,81,500 shares and restore the said shares to the petitioners in their respective ledger folios and make suitable entries in the register of members. Shri M S Bhardwaj, learned counsel, appeared on behalf of the petitioner submitted the brief facts. He submitted that as per the annual return filed by the company after the AGM held on 5th August, 2005 the petitioners are holding 7,81,500 shares of Rs. 10 each of the company. The annual returns filed by the company after the annual general meeting ('AGM') held on 10th May, 2006 and 29th September, 2007 did not contain the list of shareholders. The share capital of the company had gone up from Rs. 454.98 lakh as on 31st March, 2005 to Rs. 800 lakh as on 31st March, 2006. The petitioner was not allotted any additional equity. In view of the above oppressive actions of the respondents, some of the parties filed a petition under sections 397 and 398 of the Act on 7th May, 2008 with this Bench. Despite being shareholders, the petitioner did not receive any copy of the annual report as well as notice for the AGM, etc., during the last three years. Therefore, the petitioner issued a requisition dated 24th December, 2008 to the company asking it to hold an extraordinary general meeting ('EGM') to consider the special resolutions for removal of all the existing directors including R2 and appointment of new directors. This requisition was received by the company on 1st November, 2008. As the Board did not make any steps to proceed to call the EGM within 21 days of receipt of the requisition, the requisitionist issued a notice dated 4th December, 2008 to the company requesting it to furnish within a week the particulars of all the members and their addresses in order to issue a notice for convening the EGM. The respondents filed a petition under sections 169, 397 and 284 of the Act on 16th January, 2009 in CLB, Mumbai praying that the CLB may restrain the requisitionist from holding the proposed EGM as the petitioner is not a shareholder of the company from 28th October, 2007 and they had already communicated the same in their letter dated 11th November, 2008. The petitioner has not received the aforesaid letter dated 11th November, 2008. He further submitted that it is observed from the list of shareholders attached to the return that the petitioner is not a shareholder of the company on 28th July, 2008 the date of AGM. However, it is also noted from the website of MCA that the company has filed a revised Return for the year ended 31st March, 2008 for which the AGM was already held on 28th July, 2008. The share transfers attached to the return show that the petitioner's shares have been transferred in favour of Volition Trading (P.) Ltd. on 21st October, 2007. The petitioner has not transferred their shares in favour of Volition Trading (P.) Ltd. and they have not signed any transfer forms. All the original share certificates are still in the custody of the petitioner. They have also not received any consideration and as such the above transfers are fraudulent and invalid. This manipulation has been resorted to by the respondent No. 2 in order to usurp total control of the company. The respondent -company has transferred the shares held by them unilaterally without their submission of share certificates along with duly signed transfer forms and without evidence of payment of any consideration. Such transfer of shares is in violation of the provisions of section 108 of the Act. Thus, the respondent No. 1 -company has violated the provisions of section 111 read with section 108 of the Act. In the circumstances he prayed this Bench to grant the reliefs.

(2.) SHRI Ashok Mehta, learned PCS, appeared on behalf of the respondents filed reply to the petition. It is submitted that the petitioner is not a shareholder in the R1 -company and, therefore, they have got no right or authority to file this petition before this Bench. The whole claim of the petitioner is based on the shareholding pattern of R1 -company on 5th August, 2005 which is about 3 years and 6 months old. The petitioner has not given any genuine and correct reason as to why they have taken such an old date for their claim in the R1 -company. The petitioner has very conveniently ignored the most vital facts and developments which have taken place during this period of more man three years, i.e., between June 2005 and January 2008. The petitioner has claimed themselves to be part of Pankaj group of companies. A family settlement has taken place amongst all the entities belonging to Pankaj group and arbitration awards have been passed on 2nd July, 2005 and 25th January, 2008. In terms of these awards, petitioner is no more shareholder or any kind of stakeholder in the R1 -company. The ownership of the R1 -company is with the respondents as per the aforesaid settlement and award. The hon'ble High Court of Gujarat vide its order dated 22nd July, 2008 given in the case of Pankaj Aluminum Industries (P.) Ltd. v. Pankaj Extrusion Ltd. have recognised the existence of these arbitration proceedings and arbitration award. This order of the High Court has not been challenged by the petitioner. Had their rights been adversely affected the petitioner would have definitely taken effective steps against the order of the hon'ble High Court of Gujarat. But the fact remains that no such steps have been taken by the petitioner. Therefore, in other words the order is accepted by the petitioner and, hence, the same is binding on the petitioners.