C.P. No. 767 of 2010. Case: Surendra Kumar Dalmia Vs Suryaa Sponge Iron Ltd. and Ors.. Company Law Board

Case NumberC.P. No. 767 of 2010
JudgesB.S.V. Prakash Kumar, Judicial Member
IssueCompany Law
Citation2011 (162) CompCas 161 (CLB), 2011 (2) CompLJ 65 (CLB)
Judgement DateOctober 06, 2010
CourtCompany Law Board

Order:

B.S.V. Prakash Kumar, Judicial Member, (Kolkata Bench)

  1. The Petitioner herein filed this petition against the first Respondent-company and other Respondents under Sections 111, 111A, 397, 398, 402 and 634A of the Companies Act, 1956, seeking an order for framing a scheme for management of the company, to supersede the board of directors of the company by a committee of management to be constituted by the Company Law Board, to record the name of the Petitioner as shareholder of 11,75,000 equity shares of the company bearing distinctive numbers as laid out in annexure P6, to restrain the Respondents from issuing any share capital of the company, to restrain the Respondents from creating any third party rights over in respect of any shares of the company, to restrain the Respondents from dealing with any other shares and properties of the company, for appointment of receiver for carrying the affairs and business of the company, for appointment of a special officer to take possession, custody and control of cash book, journals, ledger and all other books and records of the company, along with other interim reliefs.

  2. The Petitioner now mentioned this matter seeking interim reliefs restraining the Respondents from issuing any further share capital of the company, dealing with the shares and assets of the company in any manner whatsoever along with other interim reliefs.

  3. The brief facts of the petition are that the first Respondent-company is a closely held public limited company incorporated on May 13,1996, with its registered office at Plot No. 003, Neelkanth Apartment, Ice Factory Road, College Square, Cuttack-753 003 with an issued, subscribed and paid-up capital of Rs. 10 crores divided into 1,00,00,000 equity shares of Rs. 10 each. This company was incorporated to run steel plants and related businesses thereto. The company has a sponge iron manufacturing plant located on a 55 acres of land situated at Budhakendu, Kalkala, Jujpur District with one mega watt captive power plant. The Petitioner and the second Respondent are initial promoters of the first Respondent-company having 50 per cent. shares each in the company. The Petitioner was the chairman and the managing director of the board of directors since inception till May 10, 2008. As differences cropped up between the Petitioner group and the second Respondent group, a Company Petition No. 186 of 2007 was moved under Sections 397, 398 and 402 of the Companies Act, 1956, before the Principal Bench, Company Law Board, which was ultimately disposed of by an order dated February 15, 2008, in terms of settlement filed by and between the Petitioner and the Respondents. In view of the compromise arrived between the parties, the Petitioner and the Respondent group entered into a memorandum of understanding dated November 28, 2007 (annexure P4) for certain terms and conditions as because the Petitioner herein agreed to exit from the company by selling his 50 per cent. shares to the second Respondent group. As the memorandum of understanding dated November 28, 2007, was not complied with in terms of clauses 9 and 10 of the memorandum of understanding, the Petitioner and the second Respondent group entered into a second memorandum of understanding dated February 14, 2008 (annexure P5). In the second memorandum of understanding, the second Respondent group made over 11,75,000 equity shares standing in the name of the second Respondent and Respondents Nos. 7 to 10 along with share certificates and duly executed transfer deeds to the Petitioners as a counter security for release of their personal guarantees to the bank and financial institutions authorising the Petitioner to sell away the same, if the second Respondent group fails to release their personal guarantees on or before May 15, 2008. Since the Respondents group failed to release their personal guarantees from the bank and financial institutions before May 15, 2008, the Petitioner lodged the said shares on August 13, 2010 (annexure P8) with the company for recording him as the shareholder of the above said shares, whereas the first Respondent-company gave an advertisement in the Indian Express on June 16, 2009, stating that the first Respondent-company lost all documents of the company in shifting its registered office, hence appealed to return those lost documents to the company in case anybody found the said documents (annexure P18). On the lodgment application, the first Respondent-company acknowledged the receipt of the original share certificates along with share transfer deeds stating that necessary compliance will be done after proper verification in compliance with the provisions of the Companies Act, 1956. When the company failed to respond to the application of lodgment made by the Petitioner, he wrote another reminder letter on August 18, 2010 (annexure P10) about lodgment of the aforesaid shares for transfer in his favour. To which, the first Respondent-company replied on August 20, 2010 (annexure P11) stating that the company already issued duplicate share certificates to the respective shareholders against their shareholding on July 27, 2010, in view of the lodgment application of the Petitioner, the first Respondent-company stated that the transferors were asked to clarify the actual position in that regard and the Petitioner is also asked to confirm as to how he got the original share certificates if they were lost by the original shareholders as indicated by the respective shareholders to the company. The Petitioner being surprised of issuing such...

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