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Chetan Rajgarhia v/s Vishnu Properties & Industries

    C.P. No. 45 of 2013
    Decided On, 18 November 2015
    At, Company Law Board Eastern Region Bench Calcutta
    By, THE HONOURABLE MR. DHAN RAJ
    By, MEMBER
    For the Petitioners: Sanjay Kumar Gupta, Deepak Kumar Khaitan, Practicing Company Secretary, Patita Paban Bishwal, Advocates. For the Respondents: Ratnanko Banerji, Senior Advocate, Manju Bhutoria, Saubhik Chowdhury, Debayan Ghosh, Meenakshi Manot, Advocates.


Judgment Text
1. In this case, the petitioner filed the company petition bearing C. P. No. 45 of 2013 under Section 111 of the Companies Act, 1956 (hereinafter called as "the Act") seeking direction upon the respondent-company to rectify its register of members to reflect the names of respondent No. 2 for 820 shares and respondent No. 3 for 475 shares and also to restore the name of the deceased persons, viz., Biswanath Rajgarhia (expired on September 14, 2008), Bharat Rajgarhia (expired on December 3,1982) and Sashilekha Rajgarhia (expired on March 2, 1989) as well as to expunge the transfers and transmissions fraudulently recorded by respondents Nos. 2 and 3 along with other consequential reliefs. Precisely speaking, the authorised representative of the petitioner submitted that as per the records and returns of the respondent-company, Mrs. Shivargi Rajgarhia (respondent No. 2) and her husband, Mr. Gautam Rajgarhia (respondent No. 3) are holding 820 equity shares and 475 equity shares respectively. Further, during the last more than three decades, no one has come forward as an executor and/or administrator in respect of any of the deceased members and no succession certificate has been provided to the board of directors of the respondent-company.

1.1 It has also been averred that respondent No. 2 had filed a company petition being C. P. No. 593 of 2012 before this Hon'ble Board claiming to hold 2,000 equity shares of and in the respondent-company but she had not furnished any documentary evidence in proof of her eligibility. In the said C. P. No. 593 of 2012, respondents Nos. 2 to 5 in their reply-affidavit denied and disputed the claim of the petitioner therein (respondent No. 2 herein), because the petitioner in the said C. P. No. 593 of 2012 (respondent No. 2 herein) in the rejoinder-affidavit, attached the photocopies of purported share certificates. Also, during the proceedings in C. P. No. 593 of 2012, the petitioner who is respondent No. 2 herein, had offered to sell her shares to respondents Nos. 2 to 5 therein and this Hon'ble Board was requested to determine the number of shares and title thereof purportedly held by respondent No. 2 herein, to which respondent No. 2 herein (petitioner in C. P. No. 593 of 2012) did not agree to the determination of title of shares by this Hon'ble Board on the premise that she had offered to sell her entire shareholding of 2,000 equity shares to the respondents and as such, the respective submissions of the parties relating to the shareholding of the petitioner in C. P. No. 593 of 2012 remained inconclusive. It has been categorically mentioned that C. P. No. 593 of 2012 was filed under Sections 235, 397, 398, 399, 402, 403 and 406 of the Act, whereas the Hon'ble Board can decide upon the title of the shares only under Section 111 of the Act and hence, the instant company petition has been filed.

1.2 In addition, it has been submitted that the shares of Bharat Rajgarhia, Sashilekha Rajgarhia and Biswanath Rajgarhia were never transmitted even after their death, but respondent No. 3 has purportedly shown to have transmitted the shares of the deceased family members on September 10, 2011. It has been further stated that the share transmission and/or share transfer requests have to be dealt with as per the articles of association of the company and the provisions relating to transmission of shares are given in articles 37 and 38 of the articles of association of the company. It has also been submitted that all the three deceased members of the company held their respective shares in their sole names only and the articles of the company do not recognise the concept of legal heir and since the deceased members held their respective shares in their sole names only, in accordance with article 37 of the articles of association, an executor and/or administrator could be the only person recognised by the company as having any title to the shares, but nobody has come forward before the board of directors of the company as an executor(s) or administrator(s) in respect of the shares held by the aforesaid three deceased in their individual names. In fact, the board of directors of the company never received any transmission requests for the subject shares and hence, no transmission was ever approved/registered by the board of directors of the company during the last more than three decades. Further, the shares could have been transmitted to their respective executors or administrators on production of such further evidence of title as the directors might have demanded and also, with the consent of the directors.

1.3 It has further been averred that Mr. Biswanath Rajgarhia and Mr. Purushottam Rajgarhia were two directors besides Mr. Kashinath Rajgarhia from 1993 till February, 2003, but despite having majority in the board, they did not deem fit to effect the transmission of shares of Bharat Rajgarhia (expired on December 3, 1982) in favour of either respondent No. 3 or respondent No. 2 or in the name of any of the aforesaid two directors and also, the shares of Sashilekha Rajgarhia (expired on March 2. 1989) in favour of either the petitioner or her husband or in the name of any of the aforesaid two directors. Further, on March 10, 2003, respondent No. 3 was appointed as a director in the respondent-company. Also, the father of the petitioner, viz., Mr. Kashinath Rajgarhia, has been residing at Jaipur since 1971. Therefore, it is clearly evident that from March, 2003 till the death of Mr. Biswanath Rajgarhia on September 14, 2008, out of four directors Mr. Kashinath Rajgarhia was not living in Kolkata and the remaining three directors were close relatives of respondents Nos. 2 and 3. However despite having such further majority in the board for more than five years till 2008, the board of directors did not deem fit to effect the transmission of shares of late Bharat Rajgarhia and late Sashilekha Rajgarhia in favour of either respondent No. 2 or respondent No. 3. Further, the shares held by late Sashilekha Rajgarhia were not even transmitted in favour of her husband, Mr. Biswanath Rajgarhia till his death on September 14, 2008, despite he himself being the director of the company along with his father and respondent No. 3.

1.4 Further, it has been emphatically stated that respondent No. 2 herein in her rejoinder to C. P. No. 593 of 2012 has claimed that the shares of respondent No. 3 were duly transmitted with the approval of the Board on September 10, 2011 and the aforesaid transmitted shares along with those originally held by respondent No. 3 were also duly transferred with the approval of the Board on September 12, 2011 and hence, there ought to have been two board meetings, one on September 10, 2011 and the second on September 12, 2011, whereas, respondent No. 2 herself has repeatedly admitted in her pleadings in C. P. No. 593 of 2012 that no board meeting has been held since December 22, 2010 and/or December 23, 2010. It is, therefore crystal clear from the own admission of respondent No. 2 in the pleadings in C. P. No. 593 of 2012 that no board meeting was held either on September 10, 2011, approving the share transmission and/or September 12, 2011, for approving share transfers from respondent No. 3 to respondent No. 2 and hence there was no transmission of shares in favour of respondent No. 3 and similarly, no transfer of shares in favour of respondent No. 2. Since the shares of the deceased persons, namely, Bharat Rajgarhia, Sashilekha Rajgarhia and Biswanath Rajgarhia were never transmitted to respondent No. 3 and the endorsement on the back of the share certificates showing transmission on September 10, 2011 and thereafter, the transfer of the same shares from respondent No. 3 to respondent No. 2 on September 12, 2011, are bad in law. It is unambiguously clear that respondent No. 2 is holding only 820 equity shares and respondent No. 3 is holding only 475 equity shares of and in respondent-company and the claim of respondent No. 2 to be the owner of 2,000 equity shares is totally false and baseless. However, respondent No. 2 has made all sorts of contradictory statements in various documents/pleadings connected with C. P. No. 593 of 2012 to prove her false and baseless claim and also, falsified the books and records of the respondent-company inasmuch as she had fraudulently made entry-of transmission and transfer of shares in the register of members of the respondent-company. Besides, respondents Nos. 2 and 3 have also made false statements in the annual returns of the company filed with the Registrar of Companies, West Bengal. to establish the transmission/transfer of the shares of the deceased members in favour of respondent No. 3 and subsequently, transfer of the same from respondent No. 3 to respondent No. 2, all the while knowing that these events had never taken place.

2. In the reply affidavit, the respondents' advocate submitted that respondent No. 2 holds 2,000 equity shares out of 4,000 equity shares comprised of 50 per cent, of the issued, subscribed and paid-up share capital of the respondent-company which she came to hold by reason of her own shareholding of 820 equity shares and also, by reason of transfer of 1,180 equity shares held by her husband, viz., Mr. Gautam Rajgarhia (respondent No. 3) and no one else is entitled to or has any right in respect of 2,000 equity shares. Further, it has been submitted that from the records of the respondent-company, as have been relied upon by the petitioner himself, it is evident that the transfer of shares to respondent No. 2 has been accepted and acquiesced by the petitioner himself. Also, the company being the family company, the right of respondent No. 2 to the entitlement of the said 2,000 equity shares as well as Gautam Rajgarhia's entitlement to the shares of his deceased father, mother and brother was accepted and acquiesced by the petitioner. Further, it is evident from the facts on records that 405 equity shares held by late Biswanath Rajgarhia (father of Gautam Rajgarhia) have been transferred to Mr. Gautam Rajgarhia. Similarly, Sashilekha Rajgarhia (mother of Gautam Rajgarhia), since deceased and Mr. Bharat Rajgarhia (brother of Gautam Rajgarhia), both of whom held 200 equity shares and 100 equity shares respectively, were stood transmitted to Mr. Gautam Rajgarhia who is the only heir and successor of Biswanath Rajgarhia, Sashilekha Rajgarhia and Bharat Rajgarhia. However, the issues raised in the present company petition by the petitioner herein are the same issues raised by him earlier in the reply to the amendment application being C. A. No. 119 of 2013 and also, in an affidavit dated October 1, 2012, in connection with C. P. No. 593 of 2012. Moreover, in Form 20B filed at the instance of Mr. Kashinath Rajgarhia (respondent No. 2 in C. P. No. 593 of 2012) and the auditor of the company, the shareholding of respondent No. 2 in the instant company petition has been correctly stated as 2,000 shares. In addition, in Form 20B and the annual returns filed at the instance of the said Kashinath Rajgarhia (respondent No. 2 in C. P. No. 593 of 2012) including the petitioner herein have themselves admitted that respondent No. 2 holds 2,000 shares, it has been averred that it is an admitted position that respondent No. 2 holds 2,000 equity shares and it is an admitted fact that Form 20B has been filed at the instance of Mr. Kashinath Rajgarhia. Therefore, the allegations now being raised are false, untrue and incorrect and the instant company petition has been filed with ulterior motive and mala fide intention to delay the hearing of C. P. No. 593 of 2012 and also, the same is nothing but multiplicity of proceedings.

3. In the rejoinder affidavit, the authorised representative of the petitioner, while reiterating the averments made in the company petition, has averred that the respondents have deliberately filed the reply affidavit with inordinate delay and also, they are not sure about their contentions as they have not been able to provide any evidence in support of whatever statements they have made. Also, respondent No. 2 has deliberately misrepresented and twisted the facts and circumstances of the instant case to suit her convenience, in connivance with respondent No. 3. Further, C. P. No. 593 of 2012 was filed under Section 397/398, etc., and C. P. No. 45 of 2013 has been filed under Section 111 of the Act and both the company petitions are filed for two different subject matters. It has also been averred that while the petitioner herein has continuously raised disputes in C. P. No. 593 of 2012 regarding the shareholding of respondent No. 2 herein and also, filed the instant company petition challenging the shareholding and entitlement of respondents Nos. 2 and 3, the respondents are making averments that the petitioner has accepted and acquiesced the shareholding and entitlement of respondents Nos. 2 and 3. As such, it is a clear case of misstatement and attempt to mislead this Hon'ble Board by the respondents. In addition, the authorised representative of the petitioner has denied and disputed claim of the respondents that the transfer of shares to respondents Nos. 2 and 3 has been accepted and acquiesced by the petitioner and asserted that all available documents were brought before this Hon'ble Board for its examination so that the matter of transfer and transmission could be investigated and the veracity of those documents could be determined and thereafter, the correct shareholding of respondents Nos. 2 and 3 can be determined. The authorised representative of the petitioner has also denied and disputed the filing of any Form 20B at the instance of Mr. Kashinath Rajgarhia wherein the shareholding of respondents Nos. 2 and 3 has been stated as 2,000 shares. It has been contended that since the said Form 20B has been digitally signed by respondent No. 2 herself, now she cannot pass on the blame upon others.

3.1 Further, it has been averred that the respondents are trying to grab the shares standing in the names of the deceased family members, who are the ancestors of the petitioner. It has been denied that Mr. Gautam Rajgarhia is the only heir and can be the only successor of Biswanath Rajgarhia, Sashilekha Rajgarhia and Bharat Rajgarhia as these three deceased persons were also the family members/relatives of the petitioner and as such, respondents Nos. 2 and 3 are stopped from claiming successor of the assets standing in the names of the deceased members of Rajgarhia family, without obtaining succession certificates from the court of appropriate jurisdiction. In addition, it has been highlighted that respondents Nos. 2 and 3 are well aware of this status in the Rajgarhia family and that is the reason behind their sinister game plan under the garb of C. P. No. 593 of 2012 to grab the shares of and in the respondent-company which are still standing in the name of the deceased persons. It has also been stated that the succession certificate is also the basic requirement as per the articles of association of the respondent-company. Further, it has been reiterated that the aforesaid three deceased family members never transferred their shares to respondent No. 3 during their respective life time and there was no transmission of their shares to respondent No. 3 even after their death. In any case, there cannot be any scope of transfer of shares by a dead person to an alive person.

4. The respondents' advocate has argued that the instant company petition filed by Mr. Chetan Rajgarhia is not maintainable as he has no locus standi to file an application under Section 111 of the Act and also, he is not a director of the respondent-company. Further, the petitioner cannot be interested as far as the shares of Biswanath Rajgarhia group is concerned as Mr. Gautam Rajgarhia, respondent No. 3 herein, is the only legal heir of late Biswanath Rajgarhia, late Sashilekha Rajgarhia and late Bharat Rajgarhia and accordingly, Mr. Gautam Rajgarhia, respondent No. 3 herein, has transferred 1,180 shares in favour of his wife Mrs. Shivangi Rajgarhia, respondent No. 2 herein. Further, in a supplementary affidavit-in-reply filed by the respondents including Mr. Chetan Rajgarhia in C. P. No. 593 of 2012, verified and affirmed by Mr. Chetan Rajgarhia for himself as well as on behalf of Mr. Kashinath Rajgarhia, enclosed therewith a copy of the annual return for the year ended March 31, 2011 and in the said annual return, the shareholding of Mrs. Shivangi Rajgarhia has been mentioned as 2,000 equity shares of and in the respondent-company. Also, from the records of the company, as relied upon by the petitioner herein, it is evident that the transfer of shares to Mrs. Shivangi Rajgarhia (respondent No. 2) has been accepted and acquiesced by the petitioner himself. In addition, in Form 20B filed at the instance of Mr. Kashinath Rajgarhia for the year September 30, 2011, the shareholding of Mrs. Shivangi Rajgarhia (respondent No. 2) has been correctly stated as 2,000 shares. Also, the said Form 20B was filed at the instance of Mr. Kashinath Rajgarhia as well as the auditor of the company for which the auditor has raised bill for filing of Form 20B and Form 23AC and the said bill has been paid by the respondent-company by cheque under the signature of Mr. Kashinath Rajgarhia. As such, it is apparent that the allegations raised by the petitioner are all false, untrue and incorrect.

4.1 Further, it has been averred that Mr. Biswanath Rajgarhia and Mrs. Shashilekha Rajgarhia (wife of Biswanath Rajgarhia) had two children, namely, Bharat Rajgarhia and Gautam Rajgarhia (respondent No. 3 herein). Mrs. Shashilekha Rajgarhia expired on March 2, 1989, Bharat Rajgarhia, who was unmarried, expired on December 3, 1982 and Biswanath Rajgarhia expired on September 14, 2008. Therefore, the only legal heir of late Biswanath Rajgarhia, late Shashilekha Rajgarhia and late Bharat Rajgarhia is Mr. Gautam Rajgarhia and accordingly, the shares held by the said three deceased members were transmitted to Mr. Gautam Rajgarhia (respondent No. 3 herein) as Mr. Gautam Rajgarhia is the only heir and successor of the aforesaid three deceased members. It has been categorically asserted that apart from Mr. Gautam Rajgarhia (respondent No. 3) and Mrs. Shivangi Rajgarhia (respondent No. 2), no one else is entitled to or has any right in respect of 2,000 equity shares, as there are no other claimants to the said shares of the Biswanath Rajgarhia family except Mrs. Shivangi Rajgarhia who is the petitioner in C. P. No. 593 of 2012.

4.2 In addition, it has been stated that Mrs. Shivangi Rajgarhia issued a letter dated December 27, 2012, indicating her offer to the respondent-company as well as Mr. Kashinath Rajgarhia to sell her 2,000 shares of and in the respondent-company, without prejudice to her rights in the pending proceeding being C. P. No. 593 of 2012. But, the respondents in the said company petition including Mr. Chetan Rajgarhia (the petitioner herein) with an ulterior motive and mala fide intention disputed about the shareholding of Mrs. Shivangi Rajgarhia alleging that she holds 820 equity shares and Mr. Gautam Rajgarhia holds 475 shares and the remaining shares are lying in the name of late Biswanath Rajgarhia, late Shashilekha Rajgarhia and late Bharat Rajgarhia. Further, by the reason of dispute and controversy raised by Mr. Kashinath Rajgarhia and other respondents in C. P. No. 593 of 2012, Mrs. Shivangi Rajgarhia filed an application to add Mr. Gautam Rajgarhia (respondent No. 3 herein) as a party to the said C. P. No. 593 of 2012 to avoid any controversy in future in the matter. But, Mr. Chetan Rajgarhia and other respondents did not file any maintainability application and instead, the instant company petition has been filed under Section 111 of the Act, subsequent to the offer for sale of shares given by petitioner in C. P. No. 593 of 2012. Furthermore, since Mrs. Shivangi Rajgarhia and Mr. Kashinath Rajgarhia hold 50 per cent, shares each of and in the respondent-company and also, there are only two directors in the company, viz., Mrs. Shivangi Rajgarhia and Mr. Kashinath Rajgarhia, there is a deadlock situation in the respondent-company.

4.3 It has also been highlighted that even if the shares were not transmitted in favour of Mr. Gautam Rajgarhia, the application under Section 397/398 of the Act would be maintainable at the instance of the legal heirs of the deceased members and in support, the respondents advocate relied on the judgment in the case of World Wide Agencies P. Ltd. v. Mrs. Margaret T. Desor reported in (1990) 67 Comp Cas 607 (SC) ; (1990) 1 SCC 536, to state that after the death of a member whose name is still in the register of members, his legal representatives are entitled to maintain a petition under Sections 397 and 398 of the Companies Act, 1956, even though they are not registered as members. The respondents advocate also argued that the petition being C. P. No. 593 of 2012 filed by Mrs. Shivangi Rajgarhia under Sections 397 and 398 of the Companies Act, 1956, is in any way maintainable as she holds more than 10 per cent, shares and should have been heard first prior to the application under Section 111 of the Act as the application under Section 111 has been filed subsequent to the filing of C. P. No. 593 of 2012 and that too at a stage when Mrs. Shivangi Rajgarhia offered to sell her entire shareholding. Not only that, the petition under Section 111 of the Act has been filed by Mr. Chetan Rajgarhia with ulterior motive and mala fide intention to stall the hearing of the petition filed by Mrs. Shivangi Rajgarhia under Sections 397, 398 and 402 of the Companies Act, 1956.

5. The authorised representative of the petitioner, while reiterating the averments made in the company petition as well as in the rejoinder affidavit, has argued that respondent No. 2 vide her letter dated August 27, 2012, had given an offer to sell her shares and also, served a transfer notice in terms of the articles of association of respondent No. 1-company, wherein respondent No. 2 deliberately did not mention the number of shares held by her and/or offered for sale. In response to the aforesaid offer, the petitioner expressed his willingness to buy out the shares belonging to respondent No. 2 and also, to buy out the shares belonging to her husband, subject to determination of the number of shares actually held by both of them by this Hon'ble Board. Further, the petitioner has, always denied that respondent No. 2 holds 2,000 shares and also, has substantial investment by way of shareholding of 2,000 equity shares. It has also been averred that by using the photocopies of the share certificates, respondent No. 2 tried to present a false picture as if she has acquired shares by way of transfer on September 12, 2011. Also, the said photocopies reveal that her husband had acquired the shares by way of purported transmission from the deceased shareholders. However, the aforesaid transmission claimed to have been effected on September 10, 2011 and the transfer claimed to have been effected on September 12, 2011, are both bad in law. Moreover, the shares of late Shri Bharat Rajgarhia and late Smt. Sashilekha Rajgarhia were never transmitted and transferred and remained in their names even after two decades of their death. The authorised representative of the petitioner has categorically pointed out that the share transmission and share transfer requests have to be dealt with as per the articles of association of the company and in support of his submission, he relied on the decisions of the Hon'ble Supreme Court, as under :

(i) John Tinson and Co. P. Ltd. v. Mrs. Surjeet Malhan reported in (1997) 88 Comp Cas 750 (SC), to state that "Board's approval is must for any transfer and/or transmission of shares".

(ii) V. B. Rangaraj v. V. B. Gopalakrishnan reported in (1992) 73 Comp Cas 201 (SC), to state that "the provisions of articles of association are the governing laws in respect of transfer and/or transmission of shores. Hence, share transfer/transmission are not effective until approved by the board of directors".

6. Having considered the company petition, reply, rejoinder and the arguments (oral and written), it is amply clear that there are only two directors in the company, viz., Mrs. Shivangi Rajgarhia (respondent No. 2 herein) and Mr. Kashinath Rajgarhia, besides there is a deadlock situation in respondent No. 1-company. In addition, the petitioner herein (Mr. Chetan Rajgarhia) is neither a shareholder nor a director in respondent No. 1-company. Moreover, in the company petition being C. P. No. 593 of 2012 moved by respondent No. 2 herein under Sections 235, 397, 398, 399, 402, 403 and 406 of the Companies Act, 1956, the petitioner in the said company petition (Mrs. Shivangi Rajgarhia and respondent No. 2 herein) has issued a letter dated December 27, 2012, indicating her offer to respondent No. 1-company as well as Shri Kashinath Rajgarhia to sell her 2,000 shares of and in respondent No. 1-company.

6.1 Admittedly, Mrs. Shivangi Rajgarhia (respondent No. 2) and her husband, Mr. Gautam Rajgarhia (respondent No. 3) are holding 820 equity shares and 475 equity shares respectively. Further, Mr. Biswanath Rajgarhia and Mr. Purushottam Rajgarhia were two directors besides Mr. Kashinath Rajgarhia from 1993 till February, 2003. Apart from this, 405 equity shares were held by late Shri Biswanath Rajgarhia (expired on September 14, 2008-father of Gautam Rajgarhia). Similarly, 200 equity shares were held by Mrs. Sashilekha Rajgarhia (expired on March 2, 1989-mother of Gautam Rajgarhia) and 100 equity shares were owned by Mr. Bharat Rajgarhia (expired on December 3, 1982-brother of Gautam Rajgarhia). In this regard, the respondents' advocate has argued that Mr. Biswanath Rajgarhia and Mrs. Sashilekha Rajgarhia (husband and wife) had two children, viz., Bharat Rajgarhia and Gautam Rajgarhia (respondent No. 3 herein). Since Biswanath Rajgarhia, Mrs. Sashilekha Rajgarhia and Bharat Rajgarhia have expired, the only legal heir of all these deceased members is Mr. Gautam Rajgarhia and accordingly, the shares held by the said three deceased members were transmitted to Mr. Gautam Rajgarhia, who is the only heir and successor of the aforesaid three deceased members. The Practising Company Secretary appearing for the petitioner has pleaded that the shares of Bharat Rajgarhia, Sashilekha Rajgarhia and Biswanath Rajgarhia were never transmitted even after their death, but respondent No. 3 has purportedly shown to have transmitted the shares of the deceased family members on September 10, 2011, though there is no compliance of article 37 of the articles of association and there is no evidence to show that the meeting of the board of directors was held on September 10, 2011, whereby the shares of the deceased members have been transmitted. However, on the other hand, the respondents' advocate has controverted that the transfer of shares to respondent No. 2 has been accepted and acquiesced by the petitioner himself. Not only this, the right of respondent No. 2 to the entitlement of the said 2,000 equity shares as well as Gautam Rajgarhia's entitlement to the shares of his deceased father, mother and brother was accepted and acquiesced by the petitioner. This is evident from the fact that in Form 20B and the annual return for the year ending September 30, 2011, filed at the instance of Mr. Kashinath Rajgarhia (respondent No. 2 in C. P. No. 593 of 2012) as well as the auditor of the company, the shareholding of the respondents has been shown at 2,000 shares. To this, the authorised representative of the petitioner has pointed out that it is a clear case of misstatement and attempt to mislead this Hon'ble Board by the respondents and further denied the filing of any Form 20B at the instance of Mr. Kashinath Rajgarhia wherein the shareholding of respondents Nos. 2 and 3 has been stated as 2,000 shares,

6.2 The authorised representative of the petitioner has clearly denied that Mr. Gautam Rajgarhia is the only heir and can be the only successor of Biswanath Rajgarhia, Sashilekha Rajgarhia and Bharat Rajgarhia as

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these three deceased members were also the family members/relatives of the petitioner herein and thus, respondents Nos. 2 and 3 are estopped from claiming successors of the assets standing in the names of the deceased family members of Rajgarhia family without obtaining succession certificate from the court of appropriate jurisdiction. However, there is no averment as to what action has been taken by so-called other successors) of the aforesaid three deceased members for obtaining succession certificate from the court. On the other hand, the respondents' advocate has categorically sated that Mr. Gautam Rajgarhia is the only legal heir after the death of his parents and only brother, being the aforesaid three deceased members. 6.3 Under the aforesaid facts and circumstances, it is crystal clear that there are only two directors in the company, viz., Mrs. Shivangi Rajgarhia and Mr. Kashinath Rajgarhia and there is deadlock situation in the company. Consequently, there is pending company petition being C. P. No. 593 of 2012 filed by respondent No. 2 herein as the petitioner and in the said company petition, the process of valuation of shares has already been completed to exercise the option by the petitioner to sell out the shareholding as per the said valuation. In this regard, it is relevant to observe that Biswanath Rajgarhia and Sashilekha Rajgarhia (parents of Gautam Rajgariha) and Bharat Rajgarhia (only brother of Mr. Gautam Rajgarhia) have expired and hence, respondent No. 3 is the only legal heir, whereas no other successor as stated by the authorised representative of the petitioner has initiated any action to prove the succession in his/her favour. Therefore, the balance of convenience goes in favour of the respondents and hence, the disclosure showing the shareholding of respondent No. 2 as 2,000 shares has got more weightage as the aforesaid Form 20B and the annual return for the year ending September 30, 2011, filed by the respondent-company were the public documents and hence, the said shareholding was within the knowledge of the petitioner as well. Moreover, the conduct of the petitioner indicates that attempt has been made to obtain the shares held by the aforesaid deceased members by filing the present company petition before this Hon'ble Board without taking recourse of getting succession certificate from the appropriate court having, jurisdiction and that too, without being shareholder or director of the respondent-company. As such, in the interest of justice, I am of the considered opinion that the transmission of shares has taken place after the demise of the above named three members, though the process of transmission contains some procedural lapse and besides this, the reversal of the said transmission based on such technical flaws/grounds would result in more complexity and litigation's, in view of this position, the prayer seeking direction upon respondent No. 1-company to rectify the register of members and to restore the names of the deceased members is hereby disallowed. 7. C. P. No. 45 of 2013 is disposed of accordingly. 8. No order as to costs.
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