Ajay Rastogi, J. - (1.) INSTANT Company Appeal under Section 10F of the Companies Act, 1956 ('Co.Act') is directed against order dt. 5 -3 -2010 passed by Company Law Board ('CLB') in Co.Appl. -232/2008 & 313/2009 filed by M/s Valentino Laboratories Ltd., (appellant herein) in Co.Petition -11/2008.
(2.) HOWEVER , despite notices being served upon the appellant, reply to Company Petition was not filed for almost two years before the CLB, but Company application was filed raising preliminary objections that the composite company petition is not maintainable and what has been alleged by the petitioner in his Company petition are disputed questions of fact, which cannot be examined by CLB while holding summary proceedings under section 111 of the Companies Act, and appropriate recourse available for Company petitioner is to question it by filing civil suit and being not a Member as per the Register of Members of the Company and title of shareholding being disputed, Company petitioner has no locus standi to maintain company petition. However, objection was further raised that he has to first establish that he is holding 10 per cent or more shares of subscribed capital to maintain company petition. While case of Company petitioner was that he is in possession of more than 10 per cent of original share certificates of subscribed capital which itself is a prima facie evidence of title of such shares and in absence of the reply being filed, no presumption can be drawn of disputed questions of fact & law, and cannot be adjudicated in summary proceedings under section 111 of the Companies Act and the remedy regarding rectification of the Register is exclusively available with the CLB under section 111 and the Company petition is maintainable for examining the grievance being raised under sections 397 and 398 of the Companies Act. However, learned CLB after taking note of objections raised by present appellant in para 22 of its order impugned, observed that application filed before CLB declares facts seeking recognition of the Register and indisputably the respondents hold 10 per cent of original share certificates of subscribed capital of the Company and what has been contended by present appellant raising preliminary objection before CLB could be examined only after the reply to the Company petition being filed and the matter is examined; and taking note whereof, application raising preliminary objections regarding maintainability of Company Petition of respondent herein under section 111 read with sections 397 and 398 of the Companies Act was rejected and the liberty was granted to the present appellant to file reply to the Company petition, vide order dated 5 -2 -2010. However, as informed in course of arguments that after rejection of their preliminary objection, reply to the Company petition has been filed by present appellant and pleadings of Company petition are complete and the matter has ripen for final hearing, which has been fixed before CLB on 11 -5 -2011.
(3.) COUNSEL for appellant basically reiterated what has been contended before the CLB and has tried to convince that composite petition under sections 111 and 397 and 398 of the Companies Act is not maintainable since serious disputed questions of fact have been raised which could not be examined by CLB in summary proceedings and placed reliance upon judgment of Apex Court in Ammonia Supplies Corpn. (P.) Ltd v. Modem Plastic Containers (P.) Ltd : [1998] 7 SCC 105/17 SCL 463 and Standard Chartered Bank v. Andhra Bank Financial Services Ltd : [2006] 6 SCC 94/68 SCL 109 (SC), Counsel submits that claim based on disputed civil rights is beyond the scope of rectification of the Register of members, as prayed for; and what is to be examined in Company Petition filed under section 111 of the Companies Act, in the facts of instant case could be adjudicated only by civil court where alongwith inter se dispute of civil rights could be resolved.;