1. The present Company Application is filed under sections 399, 402 and 403 of the Companies Act, 1956 ("the Act") by the Managing Director of M/s Plastonna Company Private Limited ("the Company"), challenging the maintainability of the Company Petition mainly on the ground that the respondent-petitioner who has filed the Company Petition, invoking the jurisdiction of the CLB under sections 397/398 for remedying his grievances in the affairs of the Company does not hold 10% of the issued/paid up share capital of the Company as on the date of filing the Company Petition, thereby not satisfying the mandatory requirements of section 399 of the Act, in support of which Shri R. Rajesh, learned Counsel submitted:

mThe issued and paid up capital of the Company is Rs. 6,85,000/- divided into 6,850 shares of Rs.100/- each, out of which the respondent-petitioner holds only 675 shares, constituting less than 10% of the issued/paid up capital of the Company. This is brought out by the last annual return filed by the Company for the year 1997.

mThe respondent-petitioner sold 200 shares to the applicant for a total consideration of Rs. 20,000/- paid on four different occasions, as acknowledged by him in writing on 26.03.2007, 08.06.2007, 04.07.2007 and 15.11.2007. With the aforesaid sale of 200 shares, the respondent-petitioner holds only 475 shares in the Company out of the total 6850 shares in the Company. The respondent-applicant has however suppressed the aforesaid vital and material factor by causing production of the annual return for the year 1996, despite the availability of the annual return for the year 1997, filed on early as on 24.12.1997.

mThis would show that the respondent-applicant has not approached the CLB with clean hands. There are 14 shareholders in the Company and the respondent-petitioner being the sole petitioner does not constitute one-tenth of the total number of members of the Company, thereby not meeting the mandatory requirements of section 399 of the Act. The respondent-petitioner did not possess as on the date of the Company Petition, the locus standi to maintain the Company Petition, for not satisfying the mandatory requirements of section 599(1) of the Act, in support of which Shri Rajesh, learned Counsel, placed reliance on Syed Musharraf Mehdi v Frontline Soft Ltd [2007] 135 CC 280.

2. Shri K. Ramasamy, learned Counsel, appearing for the respondent-petitioner, opposed the Company Application on the following among other grounds:

nThe first respondent-petitioner is holding 705 shares out of the total paid up capital of Rs. 6,85,000/- divided into 6850 shares, which constitutes more than ten percent of the total paid up share capital of the Company. This is established by the annual return dated 25.09.1996. The petitioner has thereafter not transferred any shares to any one, including the applicant or received any consideration at any point of time for any alleged transfer of shares. The details stated in the annual return for the year 1997 are incorrect.

nThe applicant has taken the signature of the petitioner in more than 32 blank sheets, as recorded by the Advocate Commissioner in his report filed before the Bench. The applicant has taken from the petitioner signature in the blank transfer deeds to produce the same before the bank as security for the bank loan. The petitioner has not signed any other transfer deeds with the intention to transfer his shares in the Company. The applicant has misused the blank sheets signed by the petitioner and falsely produced before the Bench, as if the petitioner had received the amounts from the applicant.

nThe report of the Advocate Commissioner would reveal that no minutes of the meeting or register of members are available at the registered office of the Company. The transfer cannot be valid, in the absence of any board resolution approving the transfer and transfer deeds executed by the petitioner. The signature of the petitioner contained in the annual return for the