1 91.coappl.41.09 IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION COMPANY APPEAL NO.41 OF 2009 (CLB /CP/48/2006) Mrs.Mahalaxmi Joginder Singh Kahaan ... Appellant Vs Garuda Keepers India Pvt. Ltd. ... Respondent ..... Mr.Praveen L. Singh for the Appellant. Mr.Chetan Mehta for the Respondents. .... CORAM : S.J. VAZIFDAR, J. DATE : 20 th DECEMBER, 2010. P.C. :- 1 This is Appeal under Section 10F of the Companies Act, 1956 (for short ‘the said Act’). 2 The Appellant had filed the petition under Section 397, 398 and 399 of the said Act before the Company Law Board. According to the Appellant, she is one of the two shareholders of the Respondent-company, Respondent No.2 being the other shareholder. Further, according to the Appellant, Respondent No.2 and she hold fifty percent shares each in the company. The Appellant also claims to be a Director of the company who was illegally and malafidely removed by Respondent No.2. 2 91.coappl.41.09 3 The subscribers to the Memorandum and Articles of Association were Respondent No.2 and one Ms.Vidya Krishna Shastri. Said Ms.Vidya Krishna Shastri is the Petitioner’s sister. According to the Appellant, the said Ms.Vidya Krishna Shastri transferred her shares in her favour. The original share certificates are, however, not available with the Appellant. The Appellant’s contended that the same have been stolen/mis- appropriated by the Respondent. Various allegations have been made by the Respondent including that the documents relied upon by the Appellant were fraudulent and incorrect. The Respondent alleged that the Appellant had got the entire capital of the company transferred in her name by relying upon the forged documents. The learned Member of the Company Law Board observed that the Appellant was not an un-disputed shareholder of the Respondent-company. 4 The Appellant has relied on various documents in support of her contention that she is a member of the company holding fifty percent of the equity shares. The Respondent-company by a letter dated 13th August 2003, addressed to the Registrar of Companies states as follows : “I am hereby enclosing the copy of the said certified True Copy of the Annual Return 2001-2002 in which both the Directors have signed and submitted to the Registrar of Companies, Mumbai for the Company No.11-116217 dated 27/9/2002 vide document No.14. There are details of share held at date of AGM shows, I have been allotted 5000 equity shares of Rs.10/- each and I am an equal share holder of M/s.Guruda Keepers India Pvt. Ltd. 3 91.coappl.41.09 And that Ms.Maharaxmi J. Kahaan has accepted and signed the same, i.e. between pages No. 6 & 7.” There is, therefore, an admission that the Appellant is a shareholder of the Respondent-company. 5 The annual returns of the company under Section 139 of the said Act for the years 2000 to 2003 indicates the Appellant’s name as a shareholder of the company holding five thousand shares. Thus, this is yet another admission of the Appellant being the shareholder of the company. 6 The Appellant also relied upon the share transfer deed executed by her said sister Ms.Vidya Krishna Shastri to the effect that she has transferred shares in her name. 7 On the other hand, the Respondent produced the original share certificates issued to said Ms.Vidya Krishna Shastri during the course of arguments and stated that the same had been transferred in favour of Respondent No.3 on 10th July 2000. It was further alleged that the share certificates had been signed by the Appellant. 8 There is a disputed fact that as to whether, the share certificates were issued in favour of the Appellant or not. If they were, she was entitled to maintain the petition under section 397 & 398 of the said Act. If not, the petition would not have been maintainable. Considering the 4 91.coappl.41.09 nature of the evidence produced by the Appellant, the Company Law Board ought to have permitted the parties an opportunity of leading evidence before deciding the issue. Instead, the learned Member merely relied upon the presumption under section 84 of the said Act and dismissed the petition on the ground that it is not maintainable. The learned Member held that the Appellant did not established her status as a shareholder of the company. 9 With respect the approach of the Company Law Board is incorrect. The Appellant had relied upon important admissions. Whether the documents are genuine or not is a matter of evidence. The learned counsel appearing on behalf of the Appellant stated that the annual returns relied upon by the Appellant as constituting admissions were filed by the Respondent before the Company Law Board. In any event, the veracity of these admissions was a vital important and could not have been rejected merely on the basis of the presumption under section 84 of the said Act. Section 84 of the said Act only raises a prima facie evidence as to title based on a certificate under the common seal of the company. When the certificate itself is doubted, with contrary evidence, it is for the Court or Tribunal to weigh the evidence before coming to a conclusion as to whether a person is a member or not. 10 In the circumstances, order of the Company Law Board dated 30th January 2009 is set aside. The petition is remanded to the Company Law Board. All contentions including as to whether the Appellant is a 5 91.coappl.41.09 Member or not are kept open. There shall be no order as to costs. 11 The impugned order dated 7th January 2010 shall continue upto and including 31st March 2011. The Appellant is at liberty to apply to the Company Law Board for continuing the said order and for further interim reliefs. -