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2012 Supreme(Del) 2126
IN THE HIGH COURT OF DELHI AT NEW DELHI
INDERMEET KAUR, J.
IN THE MATTER OF TONY ELECTRONICS LTD. - Petitioner
CO.PET. 167/1999 and Co. Appl. 730/2002, 167/2003, 1861/2012
Decided On : 17.12.2012
Mr. Neeraj Yadav, Mr.Rishabh Maheshwari and Mr.Saurabh Seth, Adv. for the applicant with the applicant-Mr.Gopal Krishan. Mr. Kamal Sawhney, Adv. for the Respondent.
The judgment establishes the mandatory nature of certain provisions under the Companies Act, emphasizing the importance of compliance with transfer procedures and the need for due diligence in exercising shareholder rights.
Headnote:
Fraud - Company Law - Section 391, Section 394, Section 41, Section 108, Section 150, Section 164 - The judgment discusses the allegations of fraud in the context of a scheme sanctioned by the court and the rights of a shareholder under the Companies Act. It highlights the mandatory nature of certain provisions and the requirement for due diligence in exercising rights as a shareholder. The court emphasizes the importance of the register of members and the need for compliance with transfer procedures. The judgment also addresses the admissibility of documents and the role of the court in supervising and implementing schemes under the Companies Act.
Fact of the Case:
The applicant sought to recall the order setting aside a sanctioned scheme, alleging fraud in the merger of two companies. The applicant claimed to be a majority shareholder but was not notified of the merger meeting. The respondents argued that the application was not maintainable and that the applicant's name was not in the register of members.
Finding of the Court:
The court found that the applicant's name was not in the register of members and that the share transfer forms were unstamped and incomplete. The court dismissed the objections, emphasizing the mandatory nature of certain provisions and the lack of merit in the applicant's claims.
Issues: The issues revolved around the maintainability of the application, the applicant's status as a shareholder, and the allegations of fraud in the merger process.
Ratio Decidendi: The court emphasized the mandatory nature of provisions related to shareholder rights and the need for due diligence in exercising those rights. It also highlighted the importance of the register of members and the admissibility of documents in legal proceedings.
Final Decision: The court dismissed the objections and found the application to be without merit, emphasizing the lack of compliance with statutory provisions and the absence of evidence to support the allegations of fraud.
INDERMEET KAUR, J. (Oral)
1. By way of this application the applicant Gopal Kishan seeks a recall of the order dated 20.09.1999; i.e. setting aside of the scheme which had been sanctioned by this Court on 20.09.1999. This application has been filed on 22.07.2002.
2. Submission in the application being to the effect that this merger had been effected malafide behind the back of the applicant; he was a shareholder of M/s Tony Electronics Ltd. (hereinafter referred to as the company) which pursuant to the order dated 20.09.1999 has merged with Super Cassettes Industries Ltd.; no information about the merger of the aforenoted companies had ever been intimated to the applicant who is a shareholder of the transferor company (M/s Tony Electronics Ltd.) and was holding 52470 equity shares; being a majority stake holder of 52.47%; scheme sanctioned without notice to him and amounting to a fraud played upon the Court is thus liable to be set aside.
3. Facts as emanating from the record show that the parties are closely related; the applicant is the brother of Krishan Kumar (respondent No. 6) and uncle of Bushan Kumar (respondent No. 4). Case as per the petitioner is that an agreement dated 19.02.1998 had been entered into between the parties pursuant to which it was decided that the petitioner would be gifted eight properties along with a payment of Rs.2.5 crores in cash; as a counter guarantee respondent No. 6 had given the original share transfer deed dated 01.03.1998 of 52,470 equity shares (52.47% of the equity) of the company and this was confirmed vide letter dated 02.03.1998 (page 395 of the paper book); it was agreed that if this payment of Rs.2.5 crores is delayed beyond a reasonable time, it would be paid with 2% interest per month or in the alternate the said shares would be transferred in favour of Gopal Kishan.
4. This letter has been heavily relied upon by the petitioner/applicant. His submission is that he was admittedly a shareholder of the company and this has been confirmed by the Managing Director of the company Devender Kumar Dua in this letter dated 02.03.1998. Attention has been drawn to the Annual Return of the company (Annexure-5) in the record of the Registrar of Companies (ROC); this document shows several transactions conducted on 27.02.1999. Transactions No. 4 & 5 are relevant to decide this controversy. Transaction No. 4 shows that Gopal Kishan (the applicant) had transferred 100 equity shares to the transferee Bushan Dua on 27.02.1999; transaction No. 5 shows that 52,470 equity shares had been transferred by Krishan Kumar Dua (respondent No. 6) in favour of Gopal Kishan (the petitioner) on the same date i.e. on 27.02.1999. This document had surfaced before this Court during the course of the proceedings when it was filed by the petitioner. The authenticity of this document was disputed and doubted. On 13.01.2003, Local Commissioner Advocate Arjun Bhandari was appointed by the Court to visit the office of the ROC to inspect the record and to initial the certified copies of the documents issued by the ROC. This report is dated 27.01.2003. It is pointed that this report supports the case of the petitioner as it clearly states that the annual return filed by the company before the ROC also shows that the petitioner was the holder of 52,470 shares on 27.02.1999. Attention has also been drawn to the subsequent report of the second Local Commissioner Advocate Arjun Bhandari dated 21.03.2003; submission being that this report reiterates that the document i.e. the annual return produced by the petitioner is an authentic document; this is fortified and substantiated by the fact that this document also bears the stamp of ROC dated 28.12.1999 substantiating his submission that this document is a true certified copy of the original document and was a part of the original record of the ROC. Further submission of the petitioner being bordered on the argument that a scheme had been propounded by the non-applicants/
