RUPAKLTD Vs. REGISTRAR OF COMPANIES

JUDGEMENT

(1.) This is an application under Section 155 of the Companies Act, 1956, for rectification of the register of shares of the company on the ground that certain names have been entered therein without sufficient cause.

(2.) The company, Rupak Ltd., was registered in 1947, under the provisions of the Indian Companies Act, 1913 (hereinafter referred to as "the Act"), having its registered office at Bakerganj in the town of Patna. The authorised capital of this company was Rs. 50,00,000 and its issued capital was Rs. 10,00,000. Out of the issued capital 25,000 ordinary shares were applied and allotted at the rate of Rs. 10 per share to 18 persons mentioned in paragraph 3 of the present application (for the sake of brevity hereinafter referred to as the "Mishra group"). 63,890 ordinary shares were subscribed by persons other than these. The Mishra group filed a money suit in the court of the Subordinate Judge, Patna (Money Suit No. 35 of 1954), for realisation of the sum of Rs. 2,50,000, contending that the money given to the company was a loan and not share money. The suit was decreed and it was held that allotment was not proper as the amount aforesaid was a loan. An appeal was preferred by the company to the High Court (First Appeal No. 308 of 1958). Meanwhile, a petition for winding up the company was filed by some persons (Company Act Case No. 1 of 1959). A compromise was effected in that case between the parties according to which the company withdrew the appeal and agreed to pay back the money advanced by the aforesaid persons. This compromise arrived at was accepted in the company case by the learned company judge.

(3.) It is said that up to 30th of November, 1964, the amount of Rs. 2,50,000 aforesaid was shown in the balance-sheet under the heading "Subscribed capital". Including the same in the total amount of Rs. 8,88,900 the balance-sheet showed this amount to be fully called up and an amount of Rs. 28,852.90 as calls in arrears. In view, however, of the compromise order aforesaid, the amount of Rs. 2,50,000 was deducted out of the said subscribed capital and it was shown as Rs. 6,10,047.10 after deducting the calls in arrears. When the balance-sheet and annual return for 1965 were filed before the Registrar of Companies, he objected to the reduction of the capital without compliance with legal requirements. Hence, the present application for rectification of the share register.