CA No. 518/2007 in CP No. 154/2007. Case: Balraj Malhotra and Others Vs Srijee Estates & Investment (P.) Ltd.. Company Law Board

Case NumberCA No. 518/2007 in CP No. 154/2007
JudgesVimla Yadav, Member
IssueCompany Law
Citation2012 (106) CLA 250
Judgement DateAugust 30, 2011
CourtCompany Law Board


Vimla Yadav, Member, (New Delhi Bench)

  1. In this order I am considering Company Application No. 518/2007 filed by Shri Chetan Gupta, practising company secretary, challenging the maintainability of CP No. 154/2007 on the ground that the petitioners do not have the requisite qualification under section 399 of the Act to maintain the company petition under sections 397, 398, 402, 403 of the Companies Act, 1956 ('the Act').

  2. CP No. 154/2007 was filed by Shri Balraj Malhotra and others against Srijee Estates & Investment (P.) Ltd. and others alleging oppression and mismanagement and seeking declaration that the Board meeting held after 28th October, 2006 as null and void and all the resolutions passed at any meeting be declared void and invalid. The applicant's case is that the present petition is not maintainable inasmuch as the petitioners are not shareholders of the company and are not qualified to maintain the present petition, the company has an authorised capital of Rs. 2 crore divided into 1,99,000 equity shares of Rs. 100 each and 10,000 equity shares of Rs. 10 each, the petitioners have claimed to be shareholders of 1000 equity shares, this statement is wholly misconceived. It was pointed out that the petitioners have not made any payment towards the alleged allotment as the records maintained by the company would show nor have they been issued any share certificate in respect of the said 1000 shares. Apart from making a bald statement that they are holding 1000 shares no details of the payments, copies of any resolution, share certificates or any document whatsoever has been produced.

  3. Further, it was argued that the petitioners' contentions that the P1 and P2 were appointed as additional directors with effect from 20th October, 2006, is also false, as the Board of the company had never approved or appointed the P1 and 2 as directors. The contention has been strongly refuted in the representation made by the company to the Registrar of Companies ('RoC'), Delhi and Haryana, New Delhi. It has been pointed out that Mr. Balraj Malhotra, the P-1 had fraudulently used his own digital signature and had filed Form 32 which is void ab initio and cannot be referred to or relied upon. In any case P1 and P2 would cease to be additional directors on 26th March, 2007 on which date the annual general meeting ('AGM') was held.

  4. Further, it was contended that the allotment of shares on 4th January, 2007 and 16th January, 2007 to P1 and P2 is wholly incorrect, there has been no allotment by the Board of the company, no payment has been made with regard to the said allotment. Form 2 alleged to have been filed in this connection, with effect from April 2006, is itself a fraud inasmuch as apart from being "back dated" the Form had been filed using the digital signature of Mr. Pawan Sharma, who had not been authorised by the Board of directors to file the said form. This fact has also been admitted by Mr. Pawan Sharma, who has filed a complaint with the authorities that the petitioners had without authority of Mr. Pawan Sharma as well as the Board fraudulently sought to file a Form 2 claiming to have been allotted shares. It was pointed out that there are nearly 36 shareholders of the company and the petitioners hold no shares at all. All the shareholders have been duly issued the share certificate and the allotments have been made in terms of the Board resolution passed form time-to-time in accordance with law.

  5. The applicant has pointed out that the company has filed a written complaint to the RoC, which is annexed to the petition at pp. 251, 252 and...

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