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2018 DIGILAW 391 (HP)

Ashish Dass Gupta v. State of H. P.

2018-03-19

SURESHWAR THAKUR

body2018
JUDGMENT : Sureshwar Thakur, J. 1. The petitioner is aggrieved by the orders recorded by the learned Judicial Magistrate 1st Class, Kasauli, whereby, he accepted the proposal of the Investigating Officer concerned, for closure of FIR No. 41 of 1999, lodged on 19.04.1999, with Police Station, Parwanoo, wherein, offences constituted under section 420, 467, 468 and 120B of IPC, stood embodied. The substratum of the allegations encapsulated in the apposite FIR are (a) of the respondents herein with inter se collusions besides with theirs inter se holding criminal conspiracy, hence producing forged documents before the Sub Registrar of Companies, Jallandhar, (b) whereupon, there occurs reductions of the share holdings, in M/s Parwanoo Enterprises Private Limited, of the petitioner, from majority to minority, (c) with the handwriting expert concerned, rather attributing, the relevant tampering's and forgeries vis-a-vis accused Satvinder Singh and, other co-accused, namely, Sarvshri M. Kamal Mahajan and Vijay Kumar Bansal, besides also with the latter swearing affidavits before the Investigating Officer, wherein, they admitted their signatures and handwritings, borne, on the purportedly forged and fabricated documents, hence the aforesaid prima facie, establishing the contents of the FIR, and, it being untenable for the learned Magistrate, to accept the proposals, made, by the Investigating Officer concerned. 2. The entire dispute, especially, vis-a-vis the allegations constituted in the FIR aforesaid, came to be adjudicated upon, under a verdict recorded by the Company Law Board, Principal Bench, New Delhi, (hereinafter referred to as the Company Law Board). The verdict pronounced, by the Company Law Board, stood rendered, on 31.01.2000. Obviously, hence its emanation occurred prior to the recording of the impugned order. The verdict recorded by the Company Law Board, appertains to a subject matter holding absolute analogity, with, the allegations constituted in the FIR. The verdict recorded by the Company Law Board, is borne in Annexure OC/2, annexure whereof is appended, with, the record of the trial Court, and, was affirmed by the Division Bench of this Court, in a verdict rendered on 19.10.2009, upon, Co. Appeal No. 2 of 2000. 3. Consequently, it has to be determined, whether, in view of finality besides conclusivity, hence, acquired by the verdict pronounced by the Company Law Board and, its appertaining to a subject matter, which also stands encapsulated in FIR No. 41/99, qua whether the continuation, of criminal proceedings against the respondents herein, is hence construable to legally befitting. 3. Consequently, it has to be determined, whether, in view of finality besides conclusivity, hence, acquired by the verdict pronounced by the Company Law Board and, its appertaining to a subject matter, which also stands encapsulated in FIR No. 41/99, qua whether the continuation, of criminal proceedings against the respondents herein, is hence construable to legally befitting. In making the aforesaid fathoming's extractions of paragraphs No. 33 to 40, of the verdict rendered by the Company Law Board, is imperative. Paragraphs No. 33 to 40 whereof, read as under:- “33. Then in the Annual return made upto 30.09.97, it is indicated that on 31.3.97, he has acquired by transfer 100 shares each from Ashish Das Gupta and from Ashish Das Gupt jointly with Sh. Satvinder Singh, details given earlier. In that even in his own showing he should be holding entire 4000 shares (2000 acquired on 7.10.1995 and 2000 acquired on 31.3.97 by transfer), whereas, the shareholding pattern in the Annual Return upto 30.9.97-Annexure-2, the share holding pattern is shown as:- S. No. Shareholder Shares 1. Sh. Ashish Das Gupta 1000 2. Sh. Ashish Das Gupta jointly with Satvinder Singh 1000 3. Sh. Satvinder Singh 2000 4000 34. The two positions claimed by him as on 30.9.96 and 30.9.97 are, therefore, contradictory. The respondent has not produced any transfer deeds duly executed by Sh. Ashish Das Gupta and Sh. Ashish Das Gupta jointly with Sh. Satvinder Singh in support of the alleged transfers on 31.3.97 in his favour. Under the circumstances reliance placed by him on Annual Return made upto 30.9.97 cannot be accepted. Further in regard to Respondent's contentions that he is the owner of 2000 shares earlier held by Sh. Praveen Kant and Sh. R.K. Gard, he has admitted that the shares from these persons were first acquired by him jointly with petitioner on 6.10.95 and thereafter on 7.10.95, he has purchased the interest of Sh. Ashish Das Gupta. The shares stands transferred on 6.10.95 in their joint names in the records of the company, the transfer deeds dated 7.10.95 executed by these two persons cannot be acted upon by the company without the mandatory compliance of the provisions of section 108 of the Act. 35. Another point of dispute is regarding the appointment of Sh. Ashish Das Gupta. The shares stands transferred on 6.10.95 in their joint names in the records of the company, the transfer deeds dated 7.10.95 executed by these two persons cannot be acted upon by the company without the mandatory compliance of the provisions of section 108 of the Act. 35. Another point of dispute is regarding the appointment of Sh. Bhushan Ahuja as Additional Director of the company on 31.3.97 the petitioner has emphatically denied of having attended any Board meeting in which Sh. Bhushan Ahuja was appointed as Additional Director as he has travelling and in his absence the appointment could not have been made in any Board meetings for want of quorum, there being only two directors of the company at that point of time. No minutes of the Board of Directors meeting wherein he was allegedly appointed as Additional Director have also been filed. We also note that his appointed as Additional Director has been notified in Form. 32 to Registrar of Companies on 22.2.99 almost after two years from the date of his appointment on 31.3.97 gives support to petitioners assertion that no Board Meeting was held and he was never appointed as Additional Director. Further Sh. Bhushan Ahuja whose appointment is under challenge and who has been made on of the parties in the proceeding u/s. 397/398 of the Act has not taken part in these proceedings by filing the submission or appearing before this Board. Under the circumstances we hold that Sh. Bhushan Ahuja was never appointed as an Additional Director of the company. 37. Another point of dispute relates to holding of Annual General Meeting on 30.9.97. As there are only two share holder and Sh. Ashish Das Gupta's categorical denial of his having attended any alleged Annual General Meeting of the shareholders held on 30.9.97, wherein the accounts for the year 1996-97 were laid and adopted and Sh. Bhushan Ahuja was allegedly appointed as regular director of the company could not have been held for want of quorums. No minutes of the said alleged Annual Meeting were filed. Under the circumstances, we hold that no Annual Meeting of the Company was held on 30.9.97. Consequently, appointment of Sh. Bhushan Ahuja as regular Director of the company and as also adoption of the account or the year 1996-97 has not taken place. 38. No minutes of the said alleged Annual Meeting were filed. Under the circumstances, we hold that no Annual Meeting of the Company was held on 30.9.97. Consequently, appointment of Sh. Bhushan Ahuja as regular Director of the company and as also adoption of the account or the year 1996-97 has not taken place. 38. In the 397/398 petitions, respondent has also claimed that the petitioner has ceased to be the Director of the company w.e.f. 28.8.98 pursuant to the pursuance of section 283(1)(g) of the Act for having not attended three consecutive Board meetings, the required Form No. 32 for his cessation has also been filed almost after 6 months. However, in the reply to the section 186 petition, he has stated that petitioner was removed for siphoning funds of the company. Further since there are only two directors, the question of any Board Meeting being held does not arise unless both the directors attend the meeting as no proper Board meeting could have been held for want of proper quorum, the question of petitioner ceasing to be Director of the company pursuant to section 283(1)(g) of the Act does not arise. We therefore, hold that Sh. Ashish Das Gupta continues to be a Director of the company and the present Board of Director consists of Sh. Ashish Das Gupta and Sh. Satvinder Singh. 39. The petitioner has also alleged that the accounts prepared for the year 1996-97 do not reflect the correct position of assets and bank balance of the company. We have gone through these account and note that there is only one transaction in the Profit and Loss A/c i.e. Audit fee of Rs. 2500/- on expenses side and the loss for the year has been shown equivalent to that amount. Further in the Balance Sheet, this fee has been shown as payable and correspondingly Accumulated losses have been increased. There is no other change n the figures in the Balance Sheet. The petitioner in support of his contention has filed Bank certificates of State Bank of India showing balance tot he credit of the company as on 31.3.97 at Rs. 1008/- and Punjab National Bank of Rs. There is no other change n the figures in the Balance Sheet. The petitioner in support of his contention has filed Bank certificates of State Bank of India showing balance tot he credit of the company as on 31.3.97 at Rs. 1008/- and Punjab National Bank of Rs. 1659/- (Annexure A-26 and 27), page 39 and 40 attached to the petitioner's reply to Sur Rejoinder which do not tally with the figures of Bank Balance shown for these two Banks in the Balance Sheet as at 31.3.97 filed by the Respondent with Registrar of Companies. Further the number of shares held by the company in M/s Sirmour Sudberg Auto Ltd. Are also not correctly reflected. Therefore, the contention that the Balance Sheet as at 31.3.97 does not reflect true and correct position appears to be correct. 40. Having held that 2000 shares are held in the name of Sh. Ashish Das Gupta in his individual name and that another 2000 shares are jointly held in the name of Sh. Ashish Das Gupta and Sh. Satvinder Singh and that they are the only validly appointed directors, the question is the nature of relief to be granted. There are two petitions before us. One is under Section 186 of the Act and another under Section 397/398 of the Act. As far as the 1st petition is concerned, the relief sought is for directions to convene a General Body Meeting with the stipulation that even the presence of a single shareholder would constitute a valid quorum for the meeting. As far as the 2nd petition is concerned, we having already given our findings on the prayer relating to the shareholding in the company as well as the appointment of 3rd respondent as and additional director. There is another prayer in the 2nd petition that we should order removal of the 2nd respondent from the directorship of the company The company consists of only 2 shareholder and the proceedings before us already brought that the difference between the parties such that they cannot carry on together. The petitioner is admittedly the majority shareholder having 50% shares in the company in the individual capacity and another 50% shares jointly with 2nd respondent. The petitioner is admittedly the majority shareholder having 50% shares in the company in the individual capacity and another 50% shares jointly with 2nd respondent. Therefore, we given an option to the 2nd respondent either to continue as joint shareholder in the company or to transfer his interest in the joint holding to the petitioner or his nominee for a fair consideration to be determined by an independent valuer. He should indicate to the petitioner and to this Bench within 15 days from the date of his order choosing either of the option that we have given to him. In case the respondent likes to continue as joint shareholder in the company then, the petitioner is at liberty to convene a General Board Meeting within 45 days thereafter in which meeting the presence of a single shareholder would constitute a valid quorum.........” 4. An incisive reading of the aforesaid paragraphs, makes apparent upsurging's of apart from compliance with section 108 of the Companies Act, being not meted, there rather occurring evidence on record, of, under validly executed transfer deeds, of hence the respondent concerned, acquiring shareholdings, of the petitioner, in the company concerned. The apt sequel therefrom, is, all the purported accretions in the shareholdings, of one Satvinder Singh, in the company concerned, besides diminutions, of the petitioner's shareholdings in the company concerned, being not, as contended by the counsel for the petitioner, (i) being an aftermath of any purported tamperings or alterations, occurring in the apposite records of the company, (ii) rather occurrence in the orders impugned before this Court, of, receipts in respect thereto being issued by the petitioner vis-a-vis the respondent concerned, does erode, the substratum of some of the allegations constituted in the FIR concerned. However, for the reasons to be ascribed hereinafter, a substantial part, of the allegations constituted in the FIR, do not hence suffer any effacement. 5. Now at, the effects of the requisite transfer deeds, standing echoed in the aforesaid extracted paragraph, of the verdict rendered by the company law board, to yet not beget any satiation with the mandatory provisions of Section 108, of the Companies Act, is, to be delved into besides adjudicated upon by this Court. 5. Now at, the effects of the requisite transfer deeds, standing echoed in the aforesaid extracted paragraph, of the verdict rendered by the company law board, to yet not beget any satiation with the mandatory provisions of Section 108, of the Companies Act, is, to be delved into besides adjudicated upon by this Court. In a verdict rendered by the Hon'ble Apex Court, in case titled as Life Insurance Corporation of India vs. Escorts Ltd. and Others, (1986) 1 SCC 264 , the Hon'ble Apex Court, in, paragraph No. 79, has held as under:- “In Mathalone and Others vs. Bombay Life Assurance Company Ltd. AIR 1953 SC 385 , (supra), the question of relationship between the transferor and transferee of shares before registration of the transfer in the books of the company came to be considered in connection with the right of the transferee to the right-shares issued by the company. On the transfer of shares transferee became the owner of the beneficial interest though the legal title was with the transferor the relationship of trustee and cestui que trust was established and the transferor was bound to comply with all the reasonable directions that the transferee might give and that he became a trustee of dividends as also a trustee of the right to vote. The relationship of trustee and cestui que trust arose by reason of the circumstance that till the name of the transferee was brought on the register of shareholders in order to bring about a fair dealing between the transferor and the transferee equity clothed the transferor with the status of a constructive trustee and this obliged him to transfer all the benefits of property rights annexed to the sold shares of the cestui que trust. The principle of equity could not be extended to cases where the transferee had not taken active steps to get his name registered as a member on the register of the company with due diligence and in the meantime, certain other privileges or opportunities arose for purchase of new shares in consequences of the ownership of the shares already acquired. The principle of equity could not be extended to cases where the transferee had not taken active steps to get his name registered as a member on the register of the company with due diligence and in the meantime, certain other privileges or opportunities arose for purchase of new shares in consequences of the ownership of the shares already acquired. The benefit obtained by a transferor as a constructive trustee in respect of the share sold by him cannot be retained by him and must go to the beneficiary, but that cannot compel him to make himself liable for the obligations attaching to the new issues of shares and to make an application for the new issue by making the necessary payments, unless specially instructed to do so by the beneficiary.” Also therein the Hon'ble Apex Court, after, considering the effects, of non compliances vis-a-vis the mandatory statutory provisions, borne in the Companies Act and, their consequential effects upon the rights of the transferees', has drawn conclusions, (i) that the transferee of shares, even before without registration, of the apposite transfers, in the books of company, (ii) yet becoming owners of all beneficial interests thereof, despite the legal title thereof, continuing to vest in the transferor, especially when hence the relationship of trustee, and, cestui que trust, stands established and, the transferor hence is obliged, to comply with all the directions, meted by the transferee. However, the aforesaid submission, holds good, only with respect to 2000 shares jointly held by Ashish Das Gupta alongwith one Satvinder Singh, and, it does not, in view of reflections occurring in paragraph No. 35, of the verdict recorded by the Company Law Board, (iii) the least effect the share holdings, of one Ashish Das Gupta vis-a-vis 2000 shares exclusively held therein by him, (iv) the reason being the propagation, of, one Satvinder Singh, of his, in his individual capacity holding 2000 shares in the company concerned, standing negatived, under a conclusive verdict recorded by Company Law Board. Further, the effects thereof, are, (v) that any purported accretions or diminutions, manifested in the apposite annual return, furnished by the accused before the Registrar concerned, vis-a-vis shares, held respectively by one Satvinder Singh, and, the petitioner in the company concerned, rather being a sequel of purported tampering's or forgeries being made, in the relevant documents by the accused concerned. Further, the effects thereof, are, (v) that any purported accretions or diminutions, manifested in the apposite annual return, furnished by the accused before the Registrar concerned, vis-a-vis shares, held respectively by one Satvinder Singh, and, the petitioner in the company concerned, rather being a sequel of purported tampering's or forgeries being made, in the relevant documents by the accused concerned. (vi) Predominantly, for re-emphasis rather with the aforesaid assertion, of one Satvinder Singh, of, his individually holding 2000 shares, in the company concerned, being repelled besides negatived, under, a conclusive verdict recorded by the Company Law Board. Since, the aforesaid Satvinder Singh, was, aggrieved by the findings recorded by the Company Law Board, hence, came to institute company appeal bearing No. 2 of 2000, before the Division Bench of this Court, appeal whereof, was admitted, on the hereinafter extracted substantial question of law:- “(a) Whether respondent No. 3 has authority to decide the fact regarding title of a person regarding shares in the company? (b) Whether respondent No. 3 has authority to challenge the Balance Sheet submitted and signed by the statutory auditors and registered with the Registrar of Companies? (c) Whether the consistent entries in the records registered with the Registrar of the Companies regarding Share holding can be ignored in comparison to the belated records submitted by one of the Directors under his sole signatures, which position is highly disputed? (d) Whether the Respondent Board can direct particular share holder to transfer his share so as to transfer the entire share holding in favour of one person?” Therein, in respect of the substantial questions of law, occurring at Serial No. (a) to (c), apposite answers stood not meted vis-a-vis them, hence, ipso facto and, impliedly (i) the determinations, of, share holding patterns, of one Ashish Das Gupta and, of, Satvinder Singh, in the company concerned, conspicuously by the Company Law Board, hence, remain intact besides undisturbed, (ii) thereupon, consequential effects thereof, are, of, the purported tampering's and forgeries, allegedly committed in the relevant documents, by the concerned, and theirs sequelly hence begetting all purported accretions, and, diminutions, in the share holdings, of Ashish Das Gupta, and, of, one Satvinder Singh, in the company concerned, are, obvious prima facie, inferences, generated therefrom. The learned Judicial Magistrate concerned has ignored, all the aforesaid facets, and, merely upon anvill of receipts issued by one Ashish Das Gupta vis-a-vis Satvinder Singh, qua transfer of some shares, thereupon, omnibusly concluded that all controversies in respect thereof, hence, coming to be rested, without, his considering, qua the aforesaid transfers, appertaining only vis-a-vis one Satvinder Singh, acquiring only 2000 shares jointly alongwith Ashish Das Gupta, (iii) whereas, the apposite FIR, contains allegations, of Satvinder Singh, while his holding criminal conspiracy with other co-accused, his purportedly committing forgeries and tampering's with the apposite record, for his untenably increasing his shareholdings in the company concerned, besides his untenably reducing the shareholdings therein, of one Ashish Kumar Gupta. Since, for reasons aforestated, inferences, of, accrual of all untenable reductions, and, accretions respectively, of Ashish Das Gupta and of Satvinder Singh, in their respective shareholdings in the company concerned, rather hence, emerge (iv) also when factum thereof, is established, under, by a conclusive verdict recorded by the Company Law Board, verdict whereof stood affirmed by the Division Bench, of this Court, (v) reiteratedly, the verdict pronounced, by the Company Law Board is applicable only vis-a-vis acquisition by one Satvinder Singh, from, one Ashish Das Gupta of ½ shares from amongst 2000 shareholdings, hitherto held by Ashish Das Gupta, and, its not appertaining to any transfer , of 2000 shares individually, held, by Ashish Das Gupta, in the company concerned. 6. Since, the Hon'ble Apex Court, has, in its judgment, pronounced, in a case titled as Chandran Ratnaswami vs. K.C. Palanisamy and Others, (2013) 6 SCC 740 , the relevant paragraph No. 59, whereof extracted hereinafter:- “59. Neither the High Court nor the Magisterial Court have ever applied their mind and considered the conduct of the respondent and continuance of criminal proceedings in respect of the dispute, which are civil in nature and finally adjudicated by the competent authority i.e. the Company Law Board and the High in appeal.” Held that when the apposite FIR, contains, a subject matter in respect whereof, conclusive findings are rendered by the Company Law Board concerned, and, by the High Court, thereupon, the conclusive verdict recorded by the Company Law Board, rather prevailing. Consequently, with the Company Law Board, conclusively establishing the share holding patterns, in the company concerned, respectively of the petitioner, and, of one Satvinder Singh, besides its negativing the assertions aforesaid reared therebefore, by one Satvinder Singh, hence, the ascriptions of guilt vis-a-vis the accused, prima facie hold vigour and veracity, and, the continuation of criminal proceedings, against, the accused vis-a-vis the allegations borne in the FIR , are, also permissible. 7. For the foregoing reasons, the instant petition is allowed and the order impugned before this Court, is quashed and set aside. The learned trial Court is directed to, in accordance with law, proceed in the matter. However, it is made clear that the observations made hereinabove shall have no bearings, on the merits of the case. All pending applications also stand disposed of. Records be sent back forthwith.