2012 Supreme(Del) 2116
IN THE HIGH COURT OF DELHI AT NEW DELHI
INDERMEET KAUR, J.
RAJKUMAR DEVRAJ & ANR - Appellant
versus
JAI MAHAL HOTELS PVT LTD & ORS - Respondent
SMT. URVASHI DEVI & ORS - Appellant
versus
M/S JAI MAHAL HOTELS PVT. LTD. - Respondent
RAJKUMAR DEVRAJ & ANR - Appellants
Versus
S.M.S INVESTMENT CORPORATION PVT LTD - Respondent
RAJKUMAR DEVRAJ & ANR - Appellants
versus
SAWARI MADHOPUR LODGE PVT LTD & ORS - Respondents
SMT. URVASHI DEVI & ORS. - Appellants
versus
SMS INVESTMENTS COPR. PVT. LTD. - Respondent
SMT. URVASHI DEVI & ORS. - Appellants
versus
SAWAI MADHOPUR LODGE PVT. LTD. - Respondent
CO.A(SB) 25/2011, CO.A(SB) 27/2011, CO.A(SB) 49/2011, CO.A(SB) 50/2011, CO.A(SB) 75/2011, CO.A(SB) 76/2011
Decided On : DECEMBER 12, 2012
Mr. Vibhu Bhakru Sr. Adv. with Mr.Abhishek K. Rao, Ms. Anjali Varma and Ms. Meera Mathur, Adv.
Mr. U.K. Chaudhary, Sr. Adv. with Mr. Sanjay Sen and Ms. Srishti Jain Singh, Adv. Mr. Neeraj Kishan Kaul, Sr. Adv and Mr. Vikas Singh, Sr. Adv. with Mr. D. D. Singh, Ms. Nand Devi Deka and Mr. Sanket, Adv. for R-2. Mr.Shyam Munjrani, Advocate for R-4.
Headnote:
Companies Act, 1956 - Section 111 - Application seeking rectification of register of members of company on the basis of succession certificate issued by civil court - No allegation of fraud or forgery qua the title of shares - Private respondents opposing the registration but not claiming any title to the share holding - Finding of CLB set aside with direction for rectification of members register.
INDERMEET KAUR, J.
1. These appeals are directed against the impugned order dated 16.03.2011 passed by the Company Law Board (CLB) whereby the petition filed by the petitioners Devraj and Lalitya Kumari group under Section 111 of the Companies Act seeking a rectification in the share register of Jai Mahal Hotels Pvt. Ltd., Rambagh Place Hotels Pvt. Ltd., SMS Investment Corporation Pvt. Ltd. and Sawai Madhopur Lodge Pvt. Ltd. (hereinafter referred to as the „companies?) was dismissed.
2 Vehement submissions have been addressed by both the parties.
3 On behalf of the petitioner, it is pointed out that the succession certificate issued by a competent Court of jurisdiction on 19.02.2009 was a conclusive piece of evidence on the basis of which the petitioner group had sought a rectification in the share register of the company; after the death of Jagat Singh, Maharani Gayatri Devi had on 19.02.2009 withdrawn her probate petition; it had been agreed that the shareholding of Jagat Singh would be divided equally between the three legal heirs namely Maharani Gayatri Devi, Dev Raj and Lalitya Kumari; succession certificates to the said effect had been issued; there were joint succession certificates in favour of Dev Raj, Lalitya Kumari and Maharani Gayatri Devi. The succession certificates dated 08.05.2009 are documents which are a prima-facie proof of title of the petitioners to the shareholding of Jagat Singh. The company refusing to enter the names of the petitioner group inspite of notice had compelled to the petitioner to file a petition under Section 111 of the Companies Act before the CLB. The CLB has not appreciated the controversy in the correct perspective; the said order is liable to the set aside. Further submission being that after the death of Maharani Gayatri Devi by virtue of her Will (dated 10.05.2009) her legal estate including her 1/3rd shareholding in the respondent company has also been bequeathed equally to Dev Raj and Lalitya Kumari. The respondent group has no locus to challenge the Will of Maharani Gayatri Devi and the CLB having returned a finding that because of the pendency of the aforenoted objections to Maharani Gayatri Devi?s Will, the shareholding could not be transferred by the company in favour of the petitioner group suffers from another infallibility and on this second count also the order of the CLB is liable to be set aside.
4. On behalf of the respondent company, arguments have been addressed by learned senior counsel Mr. U.K. Chaudhary. Attention has been drawn to the prayers made in Co. A.(SB) No. 25/2011 as also in Co. A. (SB) No. 27/2011; submission being that these prayers cannot even otherwise be allowed; there is dispute about the title of the shareholding and admittedly there being inter-se litigations pending between the parties, the CLB in its impugned order has rightly concluded that complicated question of fact cannot be gone into in a petition under Section 111 of the Companies Act; in this background, the impugned order calls for no interference. Reliance has been placed upon (1998) 7 SCC 105 Ammonia Supplies Corporation (P) Ltd. Vs. Modern Plastic Containers Pvt. Ltd.; submission being that the connotation of the word „rectification? has been adjudicated upon by the Supreme Court wherein it has been noted that a rectification is the failure on the part of the company to comply with the directions under the Act; it is reference to an error which has been committed and something which ought not to have been done was done which requires a correction; submission being that in this case because of the raging controversy pending in the various inter-se litigations between the parties, the CLB had rightly concluded that the rectification application of neither party can be allowed; the companies in these circumstances could not have rectified the share register. Further submission of the learned senior counsel being that the letter which had been sent by the petitioner group seeking a