S.Balasubramanian, - (1.) SINCE the cause of action and the facts in respect of all the above three petitions, filed under Section 111A of the Companies Act, 1956 ("the Act"), are similar, the above petitions are disposed of by this single common order. The petitioners, in the first, second and the third petition, lodged 20, 20 and 25 equity shares respectively with D N Choudhury Cotton Mills Ltd. ("the Company") for registration of transfer in their respective names by letters dated 24-03-2003. Initially by a letter dated 26-05-2003, the company returned the said shares on the ground that the signatures of the transferor viz., Shri T.R. Jalau did not tally with the specimen signature available with the company. Thereafter, getting the signatures of the transferor certified by the bank, the transfer instruments were lodged afresh with the company. The company sent a letter dated 04-08-2003 to the petitioners in the following terms: We are sorry to inform you that at present it is hardly possible for us to transfer any share in any name. As such, we are returning herewith your share certificate. In view of this, the petitioners have filed these petitions seeking for a direction to the company to register the transfer of the impugned shares in their names.
(2.) In the replies to the petitions, ihe company has taken a stand that the petitions have been filed with an oblique motive at the behest of the transferor, Shri T R Jalan who has been trying to interfere in the management of the company for a very long time. Earlier in the yenr 1980, when Shri Jalan had attempted to transfer 100 shares in favour of his nephew, the company had rejected the said request. A petition was filed before the CLB against the said rejection and by an order dated 29-04-1980, the CLB upheld the decision of the Board of Directors of the company on the ground that the registration of transfer and induction of the nephew of Shri Jalan would be against the interest of the company. Similarly, now Shri Jalan has transferred the impugned shares to three petitioners only with a view to cause mischief in the affairs of the company. Therefore, in a Board meeting held on 23-06-2003, the Board of Directors, after obtaining legal opinion, decided to reject the applications for transfer on the ground that the motive of transfer of the shares in favour of the petitioners was to clothe them with share qualification to become a director and in order to create mischief in the affairs of the company. In the hearing held on 28-04-2005, I directed the company to file an affidavit giving the details of number of shares in the company: the details of the board members etc. Accordingly, the company filed an affidavit giving the said details. In the same affidavit the company has raised various other grounds to justify the rejection that two of the petitioners are employees of Jalan, that transfer application letters by both of them are dated 30-05-2005 and are identical having been typed in the same type writer etc. Further, Shri Jalan had proposed to appoint two of the petitioners as directors in the AGM convened on 23-06-2003. But his efforts failed. Having failed in his attempt in the AGM, by a letter dated 24-06-2003, he raised various issues relating to the AGM held on 23-06-2003. Thus, Jalan has always been interfering the affairs of the company and by transferring his shares to the three petitioners, he is attempting to have a larger say in the affairs of the company.
(3.) SHRI Chakraborty, Advocate, appearing for the petitioners, submitted that the shares impugned in these petitions being 65 in number, constitute a very negligible percentage of the total equity shares of 1,24 lakhs. The petitioners are bona fide purchasers for valuable consideration. The alleged Board Resolution annexed with the latest affidavit of the company cannot be taken into consideration at all as at the time of rejection of the transfer, the company did not communicate the contents of the said resolution. The reliance on the earlier judgement of the CLB has no relevance, as the facts are completely different. All other grounds taken in the additional affidavit have no merit. Therefore, the petitions should be allowed.;