1. Instant Company Appeal has been filed by the appellants under Section 10F of the Companies Act, 1956 (hereinafter referred as the ‘Act of 1956’) against the order dated 31/01/2008 passed by the Company Law Board, Delhi dismissing the Company Application No.307/2007 in Company Petition No.20/2006 filed by the appellants for referring the dispute between the parties for arbitration under Section 8 of the Arbitration and Conciliation Act, 1996 (hereinafter referred as the ‘Act of 1996’).

2. Instant appeal was admitted by this Court vide order dated 07/10/2010 and interim order passed on 02/05/2008 directing interregnum proceedings before the Company Law Board to remain suspended was made absolute.

3. The matter came up for final arguments.

4. The arguments were heard and order was reserved by this Court on 11/01/2018.

5. Brief facts which need to be noted for disposal of the instant Company Appeal are that the appellant no.1-M/s. Rajasthan Development Trust Pvt. Ltd. (hereinafter referred as the ‘Company’) is a Private Limited Company which was incorporated on 28/02/1974 and has its registered office at Jaipur. It is a closely held company of late Mr. S.D. Pandey Chartered Accountant and his family members. On 07/09/2000, Ms. S.D. Pandey expired and it appears that a dispute has arisen between his legal heirs i.e. two sons namely; Rajiv Pandey and Sanjiv Pandey, his wife namely; Smt. Sushila Pandey and his daughter namely; Rani Surolia. The younger son Sanjiv Pandey along with his mother Smt. Sushila Pandey and his sister Rani Surolia, who are respondents herein, preferred a Company Petition before the Company Law Board, Delhi under Section 397 and 398 of the Act of 1956 wherein they have made several allegations against the appellant no.2-Rajiv Pandey.

6. It was alleged by them that Mr. S.D. Pandey, who is father of Sanjiv Pandey & Rajiv Pandey and husband of Smt. Sushila Pandey was suffering from Parkinson disease since 1996 and on account of his disability Mr. Rajiv Pandey, who is also a Chartered Accountant, was taking care relating to the Company. From 1997 onward, the decision making power of Mr. S.D. Pandey impaired altogether. It is alleged that as per the annual return of AGM dated 30/09/1998, the major share holders were Mr. S.D. Pandey, his wife Smt. Sushila Pandey, his daughter Smt. Rani Surolia, his other family members through his HUF in the name and style of M/s. S.D. Pandey (HUF). Besides this, 100 share each were held by Mr. V. Shukla, Mr. R.P. Sharma and Mr. D.D. Sharma. The total prescribed share capital of the Company were 3500 shares of nominal value of Rs.100 constituting the total share capital of Rs.3,50,000/-. It is stated by the respondents herein in their Company Petition before the Company Law Board that as per Annual Returns of the Company as per annual general meeting dated 30.9.98, 30.9.99 & 30.9.00 details of shares held are as under :-

Subscribed Share Capital by various share holders as per annual return of M/s Rajasthan Development Trust Pvt. Ltd. filed. Total Subscribed Share capital breakup detail : 3500 Equity Shares of nominal value of Rs. 100

7. It was further stated by t