1. In this order, we are dealing with a petition in the form of an application under section 111(4) of the Companies Act, 1956 ('the Act') filed by Tracstar Investment Co. Ltd. (Tracstar') and 4 others seeking rectification of the Register of members of Gordon Woodrof f e Ltd. ('GWL') in respect of 5 lakhs equity shares of GWL held in the name of Shoe Specialities (P.) Ltd. ('SSPL')

2. A summary of the petition is as follows:

Tracstar holds 24.91 per cent of the paid-up equity capital of GWL. The impugned 5 lakh shares constitute 12.73 per cent of the paid-up capital of GWL and were held in the name of SSPL but were in pledge with Tracstar. Tracstar became the beneficial holder of these impugned shares after it foreclosed the pledge for non-payment of dues by SSPL. The 2nd petitioner, namely, Standard Distilleries and Breweries (P.) Ltd. ('Standard') and the 3rd petitioner, namely, Stridewel Leather (P.) Ltd. ('Stridewel'), corporate entities, hold 20 per cent and 40 per cent respectively of the paid up capital of SSPL and as such they are the majority shareholders of SSPL. The 4th and 5th petitioners respectively known as NDC and RDC are shareholders of the 2nd and 3rd petitioners.

3. Even though Standard and Stridewel are the majority shareholders of SSPL, the Board of SSPL controlled by the employees of Shaw Wallace Ltd. ('SWC') transferred the impugned shares to third parties which is not in the interest of the majority shareholders of SSPL. SWC is under the control of the 3rd respondent, MRC who controls Gordon Woodrof fe (UK) Ltd. which holds 24.9 per cent of the paid-up capital of GWL. Originally, the impugned shares were offered to Tracstar but at the request of Tracstar, these shares were allotted to SSPL. However, the funds for purchase of these shares by SSPL were provided by Tracstar. The share certificate in respect of these shares was also sent to Tracstar and Tracstar has all along been in possession of this share certificate as a pledgee. These facts were known to all the parties in view of the proceedings in C.P. Nos. 10 and 29 of 1992 before Company Law Board (CLB) Standard and Stridewel being majority shareholders filed two petitions under section 397 /398 of the Act in C.P. No. 29 of 1992 and 44 of 1993 alleging acts of oppression and mismanagement in the affairs of SSPL.

4. The CLB in its order issued in C.P. No. 29 of 1992 directed the removal of name of Malleswara Finance & Investments Co. (P.) Ltd. ('Malleswara') to which shares had been issued illegally to reduce the majority shareholders from 60 per cent to 20 per cent in the register of members of SSPL. This order was challenged through a writ petition by Malleswara in Madras High Court which was dismissed on 10-5-1994 upholding the decision of the CLB. After this, the CLB also issued an order in C.P. No. 44 of 1993 on 8-6-1994. However, in between these two dates, fearing that loss of control of SSPL which holds 12.73 per cent shares in GWL would also mean loss of control over GWL, MRC, with a view to ensure that the majority shareholders of SSPL do not realise and enjoy the fruits of their majority a control, took action to ensure that SSPL is left without having any control over the impugned shares. To achieve this objective, the then existing Directors of the Board of SSPL were made to resign and new members, who were all employees of SWC were inducted on the Board. This new Board, under the directions of MRC, disposed of the impugned shares which is nothing but a criminal conspiracy. Therefore, the impugned transfer is illegal, invalid and non est. The constitution of the new Board is illegal, especially when there is a proceeding before the CLB in C.P. No. 44 of 1993 seeking supersession of the then existing Board. This Board should not have taken any action especially when the CLB in its order dated 8-6-1994 stipulated that the Board shall not take any decision except relating to the requisition for extraordinary general meeting (EGM).

5. Mov