C.A. No. 143 of 2010 in C.P. No. 72 of 2008. Case: Shambhu A. Pai Panandiker and Others Vs Marpol P. Ltd. and Others. Company Law Board
|C.A. No. 143 of 2010 in C.P. No. 72 of 2008
|For Appellant: Shaunak Kashyap, Rahul Chitnis and Pankaj Khode and For Respondents: Atul Rahadhyaksha, Senior Counsel for Respondent No. 1, Lalit Jain for Respondents Nos. 2 and 4, Abhaya Kashyap for Respondents Nos. 3 and 5 and Iswar Nankani for Respondents Nos. 6 to 8, 11, 13, 15, 16, 19 and 23
|Kanthi Narahari, Member (J)
|Companies Act, 1956 - Sections 111, 397, 398, 402, 403
|April 20, 2012
|Company Law Board
Kanthi Narahari, Member (J), (Mumbai Bench)
1. The present application is filed praying this Bench to implead the applicant as respondent No. 24 in the above company petition and sought direction to rectify the register of the company in order to reflect the applicant's shares as mentioned in the will. Counsel appearing for the applicant-trust submitted that the applicant-trust is a beneficiary under the will of the late Mr. Atmaram Pai Panandiker under his Public Testament (Will) dated September 30, 1993 and is entitled to the shares of this company belonging to the late director. The applicant trust was unaware of its being the beneficiary under the will which makes it a substantial shareholder in the respondent-company. It is submitted that despite entitlement of the trust to the shares of the respondent-company, the shares were not transmitted to it. The respondent-company transmitted the shares to the 5 sons of the late Mr. Atmaram Pai Panandiker in 2004. This was patently illegal and the transmission was done in direct contravention of the trust's rightful ownership of shares under the will. However, the applicant trust had no knowledge of either the transmission or the will at that time. Based on an inquiry initiated by one of its directors, the board of respondent-company realised its inadvertent mistake and resolved to reverse the illegal transmission on September 13, 2010, in the course of its board meeting on the said date. The respondent-company subsequently sent a letter dated September 14, 2010, informing the applicant trust of the mistake made in the transmission of shares as well as entitlement of the applicant trust to the shares. The board of the respondent-company appears to have been deceived into illegal transmission of shares. These shares should have been transmitted to the applicant trust. It is pertinent to mention that the trust came to know of the will for the first time and its entitlement to the shares under the aforementioned will only on September 14, 2010, vide the letter of the respondent-company dated September 14, 2010. The respondent-company has recognised the suppression and fraud involved in the instant case and that two directors have already agreed to part with the illegally transmitted shares on learning of the nature and character of the transmission to them. It is imperative that the respondent-company is directed to rectify its register and cancel the illegal transmission of shares which rightfully belong to the applicant trust. The directors that are holding the illegally transmitted shares must be directed to return the same at the earliest. It is submitted that the case of the petitioner must be looked at critically to realise how the instant suppression was material. The recent stand of the petitioner is indicative of two factions within the company where one faction is that of respondents Nos. 3 and 5, which is in majority with 50.05 per cent. shares and the other faction consists of the remaining brothers and their families with the latter attempting to gain majority through the instant case. Thus, if the will was not suppressed the faction of respondents Nos. 3 and 5 would have a clear majority as they control the Trust and the premise of the instant petition, i.e., of illegal control would not be tenable. The instant petition deserve to be dismissed on the ground of fraud and suppression as the will would materially alter the ground realities and the petitioner would be unable to contend that the faction of respondents Nos. 3 and 5 were guilty of illegal dilution to take over control of the company. The applicant is a substantial shareholder in the respondent-company and holds the balancing shares which would determine the control of the company. The applicant is a necessary party before the instant tribunal, as its shareholding would have a substantial impact on the outcome of the instant case. Furthermore, the entire controversy for control of the respondent-company cannot be resolved without the applicant being a party. It is submitted that the applicant is a necessary and a proper party and its presence would enable this Bench to effectively and completely adjudicate upon and settle all questions involved in the instant case. Therefore, it is prayed that the hon'ble Bench be pleased to implead the applicant as respondent No. 24 in the present proceedings.
2. Respondents Nos. 6, 7 and 23 filed their reply and submitted that the present application is filed by the applicant seeking to implead as respondent No. 24 in the present company petition, for rectification of register of the respondent-company and for various other reliefs. We say that a copy of the application was served upon our advocates on or about September 15, 2010. Our advocates by their letter dated September 18, 2010, addressed to the advocates for the applicant sought inspection of the documents referred to and/or relied upon by the applicant in the application. As no response was forthcoming, vide letters dated September 27, 2010 and October 7, 2010, our advocates once again requested for inspection as sought for in the earlier letter. It is submitted that in response to the above the advocates for the applicant belatedly by their letter dated October 16, 2010 (received by our advocates on October 18, 2010) purported to fix appointment for inspection between October 18-20, 2010, time to be fixed by our advocates as the matter/the application was scheduled to come up for hearing on October 21, 2010. The said letter was replied by our advocates vide letter dated October 19, 2010, thereby stating that inspection fixed was at a short notice and was only to create a false record and...
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