Ch. Mohd. Sharief Tariq, Member - (1.) Under consideration is the company petition filed by the petitioner, Mr. S Suresh. There are two respondents in the petition, the first respondent is Avon Institute of Modern Sciences and the 2nd respondent is Mrs. Gita Prabhu. Counsel for the petitioner initiated his arguments. However, counsel representing the respondents drawn our attention to the fact that the petitioner is no longer a shareholder in the 1st respondent-company. The counsel for the respondents stated that vide resolution dated 26th December, 2013 passed in the meeting of the Board of directors of 1st respondent-company, it has been resolved to cancel the share certificates of Mr. Subramaniam Suresh bearing Share Certificate No. 09. The decision was taken by the 1st respondent-company in exercise of its first and paramount lien on all shares of the petitioner, pursuant to regulation clause 7(2)(b) of the articles of association which provides that the company shall have first and paramount lien on all the shares. For the sake of the convenience, clause 7 of the articles of association is reproduced below: "7. Regulation 9 of Table A shall not apply. - (2) The company shall have a first and paramount lien, (a) on every share, whether fully paid or not, for all moneys whether presently payable or not, called for payable at a fixed time in respect of that share, and (b) on all shares fully paid or not, standing registered in the name of single person, for all moneys payable by him or his estate to the company: Provided the Board may at any time declare any share to be wholly or in part exempted from the provisions of this clause. (3) The company's lien, if any, on a share shall extend to all dividends payable thereon."
(2.) The counsel for the respondents submitted that the petitioner had to pay a sum of Rs. 62,90,623 which was illegally and in an unauthorised manner withdrawn from time-to-time by the petitioner from the company's bank accounts. It has further been submitted by the counsel for the respondents that lien notices dated 6th November, 2013 and 22nd November, 2013 have been sent to the petitioner's registered address, as was contained in the record of the 1st respondent-company. The lien notices have been returned undelivered with endorsement "door locked". The counsel for the respondents has produced the original covers returned and the same are taken on record.
(3.) It is pertinent to mention that the company petition (CP No. 42/2013) came to be filed on 18th June, 2013 before the Company Law Board ('CLB') which stood transferred to National Company Law Tribunal ('NCLT') and renumbered as TCP No. 119 of 2016. Counter to the petition has been filed by the respondents on 24th March, 2014, the copy of which is stated to have been provided to the counsel for the petitioner wherein the respondents very clearly mentioned under para 41 of the said counter that the shares of the petitioner have been cancelled in exercise of the powers conferred on the Board of directors under regulation 7(2)(b) of the articles of association of the company, because the amount which was due and payable by the petitioner to the company have not been paid, due to which the company has exercised its lien on the petitioner's shares. However, right from the day, i.e., 24th March, 2014, when the counter was filed, the petitioner chose to file a limited rejoinder stating that the company has no powers to exercise the lien and taken the plea that he did not receive any notice from the company.;