SHAKTI INSULATED WIRES PVT LTD Vs. GREAT VIEW PROPERTIES PVT LTD
HIGH COURT OF BOMBAY
Shakti Insulated Wires Pvt Ltd
Great View Properties Pvt Ltd
Click here to view full judgement.
(1.) The company appeal impugns an order of the Company Law Board, Mumbai Bench ("CLB") allowing the petition of the first Respondent, under Section 111 of the Companies Act, 1956 ("Act"), declaring it to be the owner of 1980 shares of the Petitioner company and directing the latter to rectify the register of members accordingly.
(2.) The facts of the case may be briefly stated, as follows :
One Jayalaxmi Holdings Pvt.Ltd. ("JHPL") held 1980 shares of the Appellant company ("subject shares"). In pursuance of a scheme of amalgamation sanctioned by this Court, all assets and liabilities of JHPL were transferred to the first Respondent. The assets included the subject shares. The first Respondent, thereafter, applied for registration of such transfer and inclusion of its name in the register of members. The Appellant rejected the application on the ground that the transfer of shares was in breach of the relevant Articles of Association providing for a right of pre-emption. This rejection was challenged by the first Respondent before the CLB under Section 111 of the Act. The CLB allowed the petition and directed rectification of the register.
(3.) Learned Counsel for the Appellants submits that the CLB has erred in law by treating the transfer of shares under the scheme of amalgamation as a case of transmission by operation of law, whereas transfer of assets by a scheme of amalgamation is considered as a voluntary transfer between the transferor and transferee companies. He relies on the Articles of Association of the Appellant company and contends that all voluntary transfers come within the pre-emption clause of the Articles. Learned Counsel submits that the subject transfer was in breach of these Articles and was, thus, rightly rejected by the Appellant company.;
Copyright © Regent Computronics Pvt.Ltd.