Kanthi Narahari, Member (J)

1. The present application is filed praying this Bench to implead the applicant as respondent No. 24 in the above company petition and sought direction to rectify the register of the company in order to reflect the applicants shares as mentioned in the will. Counsel appearing for the applicant-trust submitted that the applicant-trust is a beneficiary under the will of the late Mr. Atmaram Pai Panandiker under his Public Testament (Will) dated September 30, 1993 and is entitled to the shares of this company belonging to the late director. The applicant trust was unaware of its being the beneficiary under the will which makes it a substantial shareholder in the respondent-company. It is submitted that despite entitlement of the trust to the shares of the respondent-company, the shares were not transmitted to it. The respondent-company transmitted the shares to the 5 sons of the late Mr. Atmaram Pai Panandiker in 2004. This was patently illegal and the transmission was done in direct contravention of the trusts rightful ownership of shares under the will. However, the applicant trust had no knowledge of either the transmission or the will at that time. Based on an inquiry initiated by one of its directors, the board of respondent-company realised its inadvertent mistake and resolved to reverse the illegal transmission on September 13, 2010, in the course of its board meeting on the said date. The respondent-company subsequently sent a letter dated September 14, 2010, informing the applicant trust of the mistake made in the transmission of shares as well as entitlement of the applicant trust to the shares. The board of the respondent-company appears to have been deceived into illegal transmission of shares. These shares should have been transmitted to the applicant trust. It is pertinent to mention that the trust came to know of the will for the first time and its entitlement to the shares under the aforementioned will only on September 14, 2010, vide the letter of the respondent-company dated September 14, 2010. The respondent-company has recognised the suppression and fraud involved in the instant case and that two directors have already agreed to part with the illegally transmitted shares on learning of the nature and character of the transmission to them. It is imperative that the respondent-company is directed to rectify its register and cancel the illegal transmission of shares which rightfully belong to the applicant trust. The directors that are holding the illegally transmitted shares must be directed to return the same at the earliest. It is submitted that the case of the petitioner must be looked at critically to realise how the instant suppression was material. The recent stand of the petitioner is indicative of two factions within the company where one faction is that of respondents Nos. 3 and 5, which is in majority with 50.05 per cent. shares and the other faction consists of the remaining brothers and their families with the latter attempting to gain majority through the instant case. Thus, if the will was not suppressed the faction of respondents Nos. 3 and 5 would have a clear majority as they control the Trust and the premise of the instant petition, i.e., of illegal control would not be tenable. The instant petition deserve to be dismissed on the ground of fraud and suppression as the will would materially alter the ground realities and the petitioner would be unable to contend that the faction of respondents Nos. 3 and 5 were guilty of illegal dilution to take over control of the company. The applicant is a substantial shareholder in the respondent-company and holds the balancing shares which would determine the control of the company. The applicant is a necessary party before the instant tribunal, as its shareholding would have a substantial impact on the outcome of the instant case. Furthermore, the entire controversy for control of the respondent-company cannot be resolved without the applicant being a party. It is submitted that the applicant is a necessary and a proper party and its presence would enable this Bench to effectively and completely adjudicate upon and settle all questions involved in the instant case. Therefore, it is prayed that the honble Bench be pleased to implead the applicant as respondent No. 24 in the present proceedings.

2. Respondents Nos. 6, 7 and 23 filed their reply and submitted that the present application is filed by the applicant seeking to implead as respondent No. 24 in the present company petition, for rectification of register of the respondent-company and for various other reliefs. We say that a copy of the application was served upon our advocates on or about September 15, 2010. Our advocates by their letter dated September 18, 2010, addressed to the advocates for the applicant sought inspection of the documents referred to and/or relied upon by the applicant in the application. As no response was forthcoming, vide letters dated September 27, 2010 and October 7, 2010, our advocates once again requested for inspection as sought for in the earlier letter. It is submitted that in response to the above the advocates for the applicant belatedly by their letter dated October 16, 2010 (received by our advocates on October 18, 2010) purported to fix appointment for inspection between October 18-20, 2010, time to be fixed by our advocates as the matter/the application was scheduled to come up for hearing on October 21, 2010. The said letter was replied by our advocates vide letter dated October 19, 2010, thereby stating that inspection fixed was at a short notice and was only to create a false record and nothing else. Thereafter, vide letters dated November 10, 2010 and November 20, 2010, our advocates once again sought inspection of the documents. The same has not been responded to till date. Surprisingly on December 2, 2010, the advocates for the applicant by their letter of even date gave notice that the above application will be moved on December 8, 2010, for hearing. Also by the said letter, notice was also given that the applicant was ready to give inspection of documents "as per convenience of our advocates" and in respect thereto were requested to contact Mr. A.A. Khan, advocate at the numbers mentioned therein. Repeated attempts were made to contact Mr. A.A. Khan who when finally contacted informed our advocates that the documents of which inspection is to be given were not available and the same are expected only on Monday, December 6, 2010. All the above facts were recorded by our advocates vide their letter dated December 3, 2010. The applicant is only creating a false record purporting to offer inspection and nothing else. Despite repeated requests and reminders the applicant/their advocates have not given inspection of documents referred to and/or relied upon in the present application and therefore the application be dismissed with costs and/or they are now estopped from relying upon the same. We crave leave to file a further affidavit as and when inspection of documents is given by the applicant. At the outset the application as taken out by the applicant is an abuse of process of law and is contrary to the basic principles of law and not maintainable. The reliefs as sought, the applicant has to file appropriate/different proceedings before the court of competent jurisdiction and not file an application in the present petition and hence the reliefs as prayed for, the applicant cannot and ought not be granted and the application be dismissed in limine. Admittedly on their own showing the shares stood transmitted to the five sons of late Mr. Atmaram Poi Palondicar in the year 2004. The cause of action to apply for reversal of transmission arose in 2004 and therefore the applicant ought to have filed appropriate proceedings within 3 years from the transmission of shares, i.e., by 2007 and therefore the present application is barred by the law of limitation. The contention in the present application feigning ignorance about the transmission is patently false and to say the least, far fetched. The deponent by making such false statement has rendered himself liable for perjury and an attempt to mislead this honble Tribunal. The applicant is a trust of which respondents Nos. 3 to 5 are trustees. The same persons, viz., respondents Nos. 3 to 5 are also legal heirs of late Mr. Atmarama X. Poi Palondicar. The same three persons, viz., respondents Nos. 3 to 5 are the transferees of the shares of the said late Mr. Atmarama X. Poi Palondicar, have paid amounts to the trust being value of shares transmitted in their names. The trust after having received the entire consideration of the shares (which is suppressed by the applicant) from the five sons of late Mr. Atmarama X. Poi Palondicar, cannot claim the shares again without any justification or cogent reasons. The present application is therefore liable to be dismissed with costs. It is submitted, that the preliminary condition for rectification of register of the company is that an instrument of transfer or intimation of transfer should be received by the company, which instrument/intimation has till date to our knowledge not been received and therefore, on this count alone the present application deserves to be dismissed with cost. Without prejudice to the above, it is submitted that the application is made on the basis of a will, which is admittedly not probated and no probate has been granted by a court of competent jurisdiction in regard of the will in question. The will which is not probated is not admissible in evidence as per the provisions of the Indian Succession Act, 1925 and hence cannot be relied/looked upon. On this count alone also the present application deserves to be dismissed with costs as it has no legs to stand. It is submitted that respondent No. 3 with whom the deponent is colluding and conniving, had informed all that the applicant-trust cannot hold shares in any private limited company and therefore the said shares have to be sold only to the HUFs of five sons of late Mr. Atmarama Poi Palondicar. Respondent No. 3 had in fact calculated the share of each and value thereof, which was paid and accepted by the applicant-trust. Even otherwise the present application is in the nature of rectification of register of the members of the company. The applicant therefore, should adopt the procedure prescribed under the Companies Act for the same and cannot bypass the prescribed procedure.

3. Respondents Nos. 8, 13, 15, 16 and 19 have filed their reply and have taken the similar stand as taken by respondents Nos. 6, 7 and 23. Therefore, the same is not brought in to avoid repetition of pleadings except few paragraphs. It is submitted that the applicant has not given the inspection of the documents as relied upon in the application. The application is an abuse of process of law and the applicant has to file appropriate/different proceedings before the court of competent jurisdiction and not to file an application in the present petition. Admittedly the shares have been transferred to the five sons of late Mr. Atmarama Poi Palondicar in the year 2004 and the cause of action arose in 2004 and the applicant ought to have filed appropriate proceedings within 3 years from the transmission of shares. Therefore, the application is barred by the law of limitation.

4. The petitioners have filed an application being C.A. No. 189 of 2010 under regulation 44 of the Company Law Board Regulations, 1991, seeking dismissal of Company Application No. 143 of 2010. Shri Rahul Chitnis, learned counsel for the petitioners submitted that on or about July 21, 2008, the applicants filed the above petition under sections 397, 398, 402 and 403 of the Companies Act, 1956, against the respondents complaining the acts of oppression and mismanagement of the affairs of the company.

5. It is submitted that in or about September 2010, one Atmaram Panandiker Charitable Trust (hereinafter referred to as, "the said trust") took out the present application for impleadment of the said trust as respondent No. 24 and for rectification of the register of the company under section 111. The applicants state that the said trust in Company Application No. 143 of 2010 claims to be the beneficiary under the will dated September 30, 1993, of the late Mr. Atmaram Pai Panandikar and thus claims to be entitled to the shares of the company belonging to the late Mr. Atmaram Pai Panandikar. However, till date the said trust has failed to produce the original will and/or documents in support of the alleged claim. The said trust has filed the said application, under section 111, presumably of the Companies Act, 1956, the same is not maintainable for the reasons set out hereinafter. The applicants submit that sub-section (10) of section 111 of the said Act reads as follows:

111. Power to refuse registration and appeal against refusal.--...(10) Every appeal or application to the Tribunal under sub-section (2) or sub-section (4) shall be made by a petition in writing and shall be accompanied by such fee as may be prescribed.

6. In the circumstances, the applicants submits that since the Act makes specific provision under sub-section (10) for filing a petition in writing which shall be accompanied by the prescribed fees. Thus, the said Act contemplates the filing of an independent petition. The said trust has neither filed any independent petition nor paid the prescribed fees. The said trust ought to follow the due process of law and ought to be directed to file appropriate proceedings. The said trust is attempting a shortcut, which it ought not to be allowed to take. This honble Board, therefore has no jurisdiction to hear the said application and on this ground alone, the said application is required to be dismissed with costs. It is submitted that the said trust cannot apply for impleadment as respondent No. 24 in Company Petition No. 72 of 2008. As on date, the said trust is not even a member of the company. In any event, the said trust is neither a necessary nor proper party to Company Petition No. 72 of 2008 and hence, cannot seek impleadment. Company Petition No. 72 of 2008 is a petition complaining against the acts of oppression and mismanagement and no allegation has been levelled against the said trust in Company Petition No. 72 of 2008. Further, the said trust has no locus whatsoever. This honble Board, therefore, has no jurisdiction to hear the said application and on this ground alone, the said application is required to be dismissed with costs. Further the application is barred by limitation. Admittedly, the company transmitted the shares to the five sons of the late Mr. Atmaram Pai Panandikar in 2004. The company purportedly addressed a letter dated September 14, 2010, informing the said trust of the purported mistake made in the transmission of shares. The said trust is silent about the circumstances in which the company purportedly realised its mistake and purportedly resolved to reverse the purported illegal transmission and the reason for realising the mistake. The company having transmitted the shares in 2004, the cause of action to apply for reversal of transmission arose in 2004 and the said trust ought to have filed a company petition within three years from the transmission of the shares, i.e., on or before 2007. This honble Board, therefore has no jurisdiction to hear the said application and on this ground alone, the said application is required to be dismissed with costs. Hence, the said application, filed by the said trust does not comply with the provisions of section 111 of the said Act, and is ex facie not maintainable on the face of the said application and ought to be dismissed on this ground alone. Further, the said application is an abuse of process of law. The applicants submit that the issue whether the said application is maintainable or not ought to be decided at the outset, as a preliminary issue. In the circumstances, this honble Board be pleased to dismiss the said application as it is not maintainable. Therefore, it is prayed that this honble Bench may be pleased to dismiss the company application being C.A. No. 143 of 2010 as not maintainable. Heard learned counsel appearing for the parties, and perused the pleadings and documents filed by them. The pleadings contains the application being C.A. No. 143 of 2010 consisting of 39 pages and the reply filed by respondents Nos. 6, 7 and 23 consisting of 25 pages and the reply filed by respondents Nos. 8, 13, 15, 16 and 19 consisting of 25 pages and the application being C.A. No. 189 of 2010 filed by the petitioners contains 22 pages. Except these no other documents are on record as on the date of hearing of these applications, i.e., April 12, 2012. It was made clear in the open court that no other documents will be entertained to decide these applications to avoid controversies. After analysing the pleadings the issues that are felt for consideration and need to be addressed is (i) whether the application filed by the trust seeking directions to implead itself as respondent No. 24 and rectify the register of the company to reflect the applicants shares as mentioned in the will and (ii) whether the application filed by the petitioners being C.A. No. 189 of 2010 seeking dismissal of C.A. No. 143 of 2010 has made out any ground to allow the application by dismissing C.A. No. 143 of 2010. Since the two applications are inter related, hence decided to dispose off by passing common order. The trust filed the application before this Bench on September 16, 2010, duly verified on September 15, 2010, by one of the trustees. However, there is no mention about the regulation under which the application is filed. From the perusal of the application at paragraph 1 of page 10, in the details of the applicant, thus it is stated and the relevant paragraph is extracted hereunder: "that the present application is being filed for impleadment and rectification under section 111 of the register of the respondent-company. The applicant is Atmaram Pai Panandikar Charitable Trust, which is a trust, formed on November 17, 1990 and registered at Margao, Goa". From the above details and also from paragraph (a) and (b) of the main relief at paragraph 5, it is clear that the applicant sought reliefs mainly to seek impleadment of the applicant as respondent No. 24 in the main company petition and sought direction to rectify the register of the company. The applicant has not complied with the basic requirement and the application is not in order on the ground that there is no mention about the clauses of the Company Law Board Regulations to file the application by seeking certain interim reliefs. The fee prescribed for interlocutory application made to the Company Law Board for an interim order or direction shall be accompanied by a fee of Rs. 50 as per sub-section (2) of section 3 of the Company Law Board (Fees on Applications and Petitions) Rules, 1991. The applicant remitted fee of Rs. 50 by way of demand draft dated September 5, 2010. Mere remitting a fee of Rs. 50 is not sufficient to deal with the application without mentioning any specific regulation. As per regulation 17 of the Company Law Board Regulations, 1991, any application filed subsequent to filing of the petition applying for any interim order or direction shall as far as possible, be in Form 2 in Annexure II and shall be accompanied by an affidavit verifying the application in the manner laid down in regulation 14. According to the above regulations any applications filed subsequent to filing of the petition shall be under regulation 17 and the Company Law Board may in exercise its inherent powers under regulation 44 make such orders as maybe necessary for the ends of justice or to prevent abuse of the process of the Bench as per regulation 44. Therefore, I am of the view that without mentioning any rules and regulations of the Company Law Board, the application is vague and liable to be dismissed at the threshold. Even without going into technicalities with regard to the non-mentioning of relevant provisions of law, the application cannot be entertained on the ground that the applicant sought plural remedies. When the applicant seeks plural remedy, which is inconsequential to one another, the application cannot be entertained as per regulation 20 of the Company Law Board Regulations. The said regulation is reproduced hereunder for better appreciation: "20. Plural remedies.--A petition shall be based upon a single cause of action and may seek one or more reliefs provided that they are consequential to one another". In the present application, the applicant sought two reliefs which are completely inconsequential to one another, it is to say that seeking impleadment in the main petition as one of the respondents is in relation to the main petition and seeking direction to rectify the register of members is a separate cause of action, both cannot be prayed in one application which are not consequential. Therefore, the application is liable to be dismissed even on that ground. Irrespective of the above I would like to deal in detail with regard to the reliefs of the applicant. In the application the applicant has mentioned section 111 of the Act seeking direction to the company to rectify the register of members whether such relief can be prayed without following due procedure as contemplated in the Act, Rules and Regulations. To file a petition under section 111 of the Companies Act, 1956, seeking directions as per the said provisions, one has to file a independent petition as contemplated under sub-section (10) of section 111. The relevant provision of law is reproduced hereunder: "(10) Every appeal or application to the Tribunal under subsection (2) or sub-section (4) shall be made by a petition in writing and shall be accompanied by such fees as may be prescribed". In this regard, the Companies (Fees on Application) Rules, 1999, prescribes Rs. 500 as fee at Sr. No. 9 of its Schedule. In the present case, the petitioner has not paid the requisite fee of Rs. 500 to maintain a petition under section 111 of the Act and it is not an independent petition. To file a petition under section 111 of the Act the following documents are to be annexed as per regulation 18 of the Company Law Board Regulations as mentioned in annexure III thereto. As per the said regulations, in case the petition is made by any other persons the following documents are to be annexed: "(1) Documentary evidence in support of the statements made in the petition including the copy of the letter written by the petitioner to the company for the purpose of registering the transfer of, or the transmission of the right to, any shares or interest in, or debentures as also a copy of the letter of refusal of the company; (2) Copies of the documents returned by the company; (3) Any other relevant documents; (4) Affidavit verifying the petition; (5) Bank draft evidencing payment of application fee; (6) Memorandum of appearance with a copy of the boards resolution or the executed vakalatnama, as the case may be; and (7) Two extra copies of the petition". In the present application, the applicant filed a copy of the board resolution dated September 13, 2010 and copy of the public testament and also vakalatnama and verified the application. Except these, no other documents were filed along with the application. I am in complete agreement with the stand taken by the petitioners in C.A. No. 189 of 2010 with regard to the maintainability of the petition on the ground that the Companies Act contemplates the filing of an independent petition in accordance with subsection (10) of section 111. Therefore, the application is liable to be dismissed on this ground alone. In so far as the rectification of the register of members of the company is concerned, even on the merits of the case it is evident that the applicant has not made any application to the company seeking rectification of register of members on the basis of the document which they relied upon. Even as per the Company Law Board Regulations there should be averments in the petition in support of the reliefs which the petitioner is claiming. It is also required that there should be documentary evidence in support of the averments made in the petition. The applicant has not averred that they made an application to the company and the company refused to rectify the register or that the company has not given any reply in spite of the written request or representation made thereto. There is no documentary evidence to establish that the applicant approached the company seeking rectification. The stand of the respondents and the petitioners is that the shares of the late Mr. Atmaram Pai Panandikar have been transmitted to the five sons in 2004 itself and the applicant cannot approach this Bench even for seeking rectification in the year 2010. It is stated that the limitation to file a petition for seeking rectification of shares is within 3 years from the date of transmission of shares, i.e., on or before the year 2007. The claim of the applicant is that the trust is a beneficiary under the will dated September 30, 1993, of the late Atmaram Pai Panandikar and they came to know in the month of September, 2010. The photocopy of the will which is titled as public testament is hand written and some of the pages are not able to be read and not able to understand its contents. The respondents have strongly objected relying upon the will by the applicant trust on the ground that the applicant has not produced the original will for their inspection in spite of repeated requests and also contended that the will has not been probated and is not admissible in evidence as per the provisions of the Indian Succession Act, 1925. I do not want to go into the validity and veracity of the will at this stage in view of the reason that I am not deciding the aspect of the entitlement of the will or deciding any issues on the basis of the will. Without making any observations with regard to the will, it is apparent from the statement of the applicant itself that the will is dated September 30, 1993 and the applicant seeking remedy out of the will in the year 2010 is belated. So far as the merits of the impleadment of the applicant in C.P. No. 72 of 2008 is concerned, it is an admitted fact that the applicant is not a member of the company and the application is filed in the year 2010 on the basis of will dated September 30, 1993, claiming that the trust is entitled to the shares of the company belonging to the late Mr. Atmaram Pai Panandikar. The applicant has not given any cogent reasons for seeking impleadment to the main petition. From the averment of the applicant I do not see any ground or reason to allow the applicant to be impleaded in the main petition. Mere surmises one cannot be added to the petition. If any party is impleaded on the basis of assumptions and presumptions as stated by the applicant-trust in its application at paragraphs (i) and (j), it would definitely prejudice the interest of the other parties who are opposing the impleadment. The petitioners in their C.A. No. 189 of 2010 have taken the stand that the trust is not a member of the company and neither is a necessary party nor proper party to C.P. No. 72 of 2008 and also stated that the petition which they filed complained the acts of oppression and mismanagement and no allegation has been levelled against the said trust. I completely agree with the stand of the petitioners in their application and I am of the view that the applicant trust is neither necessary nor proper party to the proceedings. On the overall I am of the view that the intention of the applicant (trust) seeking impleadment is completely an afterthought and a clear abuse of the process of law. In view of the reasons as stated above, the application being C.A. No. 143 of 2010 filed by the trust is frivolous and vexatious and liable to be dismissed. Hence, C.A. No. 143 of 2010 is dismissed as not maintainable. However, C.A. No. 189 of 2010 is allowed. Accordingly the issues are answered.