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Dhruv Agarwal v/s Bunny Investments & Finance (P.) Ltd.

    C.P. NOS. 1, 3, 5, & 6/111/SRB of 2003, 2 & 8/111A/SRB of 2003

    Decided On, 20 April 2007

    At, Company Law Board Southern Region Bench Chennai

    By, K.K. BALU
    By, VICE CHAIRMAN

    R. Shankaranarayanan for the Petitioner. Arvind P. Datar, K. Ramasamy, Sunil B. Ganu and V. Ramakrishnan for the Respondent.



Judgment Text

1. The petitioner herein, held (a) 11,500 equity shares of Rs. 10 each in M/s. Bunny Investments & Finance Private Limited (C.P. No. 1 of 2003); (b) 60,000 equity shares of Rs. 10 each in M/s. Gati Limited (C.P. No. 2 of 2003); (c) 50,000 equity shares of Rs. 10 each in M/s. TCI Hi-Ways Private Limited (C.P. No. 3 of 2003); (d) 327 equity shares of Rs. 10 each in M/s. TCI Industries Limited (C.P. No. 4 of 2003); (e) 36,000 equity shares of Rs. 10 each in M/s. Gati Intellects Private Limited (C.P. No. 5 of 2003); (f) 16,000 equity shares of Rs. 10 each in M/s. Giri Road Lines Private Limited (C.P. No. 6 of 2003); (g) 3,50,000 equity shares of Rs. 10 each in M/s. TCI Finance Limited (C.P. No. 7 of 2003); and (h) 35,000 equity shares of Rs. 10 each in M/s. K.P.M. Investments & Finance Limited (C.P. No. 8 of 2003). Mahendra Kumar Agarwal, father of the petitioner, transferred these shares while the petitioner was a minor, to Dhruv Agarwal Benefit Trust, a trust created by the Mahendra Kumar Agarwal, for the benefit of his son viz., the petitioner. However, the petitioner is challenging the legality of the trust as well as the transfer of shares to the trust, as violative of the provisions of the Indian Trusts Act, 1882; the Guardians and Wards Act, 1890 and the Hindu Minority and Guardianship Act, 1956. Consequently, it is claimed that the name of the trust has been, without sufficient cause, entered in the register of members of the Company. The Companies involved are both private limited and public limited companies. Therefore, the petitioner is seeking directions in the present company petitions under section 111 (4) and (5) and section 111 A(3) as the case may be of the Companies Act, 1956 (?the Act?) against the Companies for rectification of the register by substituting his name in the place of the trust.


2. According to Shri R. Shankarnarayanan, learned Counsel, Mahendra Kumar Agarwal and his wife, being the petitioner?s parents are not maintaining any cordial relationship, thereby the petitioner?s mother left the matrimonial home. The petitioner?s mother apprehending that Mahendra Kumar Agarwal would transfer the impugned shares filed during October, 2001 a civil suit in O.S. No. 1892/2001 before the City Civil Court, Hyderabad and obtained an order of injunction restraining him from transferring the impugned shares, upon which it came to light that Mahendra Kumar Agarwal had already transferred the shares impugned in the company petitions in favour of the trust, purportedly created for the benefit of the petitioner, by which the petitioner lost the benefit of the shares including dividend thereon. Section 7 of the Indian Trusts Act, 1882 provides that a trust may be created by a person who is competent to contract and with the permission of a competent court of law, by or on behalf of a minor. Furthermore, the trust created by Mahendra Kumar Agarwal without the permission of the court in violation of section 7(b) is void, in support of which reliance has been, placed on the decision of the Apex Court in T.A.V. Trust v. CIT [1999] 236 ITR 7881, wherein it was held that the trust created without the permission of a principal civil court of original jurisdiction by on behalf of a minor is not valid. A trust under section 4 of the Indian Trusts Act may be created for any lawful purpose and if the purpose is fraudulent, the trust is void. The trust created by Mahendra Kumar Agarwal not being in the best interest of the petitioner, is nothing but subterfuge to take away the rights of the petitioner in respect of the impugned shares by transferring the shares to the trust. The trustees may not act for the benefit of the petitioner and may not subscribe to the rights share as and when issued by the Company. The petitioner?s parents are at loggerheads and the petitioner was then a minor under the custody of his mother. When the father is not in actual charge of affairs of the minor either because of agreement between him and the mother of the minor for any other reason is unable to take care of the minor because of his physical and/or mental incapacity, the mother, can act as natural guardian of the minor and all her actions would be valid, as laid down in Ms. Githa Hariharan v. Reserve Bank of India 1999 (1) CTC 4812 (SC). Mahendra Kumar Agarwal was not in charge of the affairs of the minor in October 2000 and therefore, could not have acted as the natural guardian of the petitioner. Therefore, the petitioner?s father cannot be the natural guardian and can neither transfer the shares held in the name of the petitioner. The motive of Mahendra Kumar Agarwal is that the petitioner?s mother should never get any benefit out of the impugned shares in the event of any unforeseen eventuality, which might happen to the petitioner and with this oblique purpose the impugned shares have been transferred to the trust. Mahendra Kumar Agarwal has in the instant cases altered the course of succession by naming the brother of the petitioner as the successor. It is obligatory under section 8(1) of the Hindu Minority and Guardianship Act on the part of a natural guardian to do all acts, which are necessary or reasonable and proper for the benefit of the minor or for the realization, protection or benefit of the minor?s estate. Accordingly, a guardian has the right to transfer the properties belonging to the minor, provided such transfer is either for the benefit of the minor or out of any legal necessity, which is lacking in the present transfer made in favour of the third respondent. While the transfer deed in respect of 50,000 shares of M/s. TCI Highways Private Limited is dated 10-10-2001, it bears the seal of the Registrar of Companies as 14-12-2000. However, the trust deed came to be executed only on 18-10-2001. Similarly, the transfer deed in respect of 36,000 shares of M/s. Gati Intellect Systems Limited is dated 15-10-2001. The transfer deed in respect of 16,000 shares of Giri Road Lines Private Limited is executed on 28th March. But the year of execution is not mentioned. Thus, the shares have been transferred to the trust before the trust was created and therefore, cannot be valid. The sale consideration is shown in these transfer deeds but has not been credited to the petitioner?s account. The entire transactions are mala fide and do not pass the test of section 8(1) of the Hindu Minority and Guardianship Act. Section 27 of the Guardians and Wards Act, 1890 envisages that a guardian of the property of a ward must act as a man of ordinary prudence and that all his acts must be reasonable and proper for the realization, protection or benefit of the property. The trust deed provides that the petitioner is entitled to exercise control over the trust fund and the investments, which shall include the impugned shares, upon the petitioner attaining the age of 35 years, thereby the petitioner has derived no benefit from the impugned transfers. This is violative of the provisions of the Guardians and Wards Act. The transfer impugned in the company petition having been made by fraud and without sufficient cause and in contravention of section 8(1) of the Hindu Minority and Guardianship Act, section 27 of the Guardians and Wards Act and the relevant applicable provisions of the Indian Trusts Act, the CLB in exercise of the powers vested in sections 111(4) and 111A(3), may direct rectification of the register of members by deleting the name of the third respondent and restoring the name of the petitioner. The petitioner attained the age of majority on 19-11-2002, upon which, filed the present company petition within the period of limitation and therefore, the company petitions are not barred by time. Shri Shankaranarayanan, learned Counsel therefore, sought for the reliefs claimed in these company petitions.


3. Shri Arvind P. Datar, learned Senior Counsel, while opposing the company petitions submitted: There are no pleadings to the effect that the shares have been transferred to the trust before its creation, in the absence of which, the petitioner cannot put forth any discrepancies in creation of the trust at the time of making oral submissions. Nevertheless, it is clear from the recitals of the trust deed dated 18-10-2001 that the settlor has prior to the execution of the deed of trust handed over to the trustee an amount of Rs. 10,000 for the benefit of the petitioner. Furthermore, under the general law of trusts, a trust may be declared in writing or, if it concerned movable property, orally by words of mouth. There are two varieties of trusts - (i) written trusts and (ii) oral trusts. The oral trust has been recognized by the Income-tax Act. Section 5 of the Trust Act defines the oral trust. The petitioner along with his mother and brother has filed a civil suit in O.S. No. 1892/2001 on the file of the City Civil Court, Hyderabad seeking an order of permanent injunction restraining Mahendra Kumar Agarwal from alienating their properties inclusive of the impugned shares. The petitioner and his brother have filed yet another civil suit in January, 2002 before the City Civil Court, Hyderabad for partition of the Hindu Undivided Family properties. There are several other litigations between the family members of the petitioner. In these proceedings, the transfer of shares has been impugned by the petitioner and thereby, the petitioner has knowledge of the transfer of shares. In view of this, the present company petition filed in January, 2003 is clearly barred by limitation. The company petition filed out of personal vendetta is an abuse of process of law. Though the petitioner attained majority on the date of filing of the company petition, yet, the petitioner?s mother, being power of attorney holder has initiated the present proceedings. Mahendra Kumar Agarwal, with a view to prevent disposal of the impugned shares by the petitioner?s mother, created the trust and thereafter transferred the impugned shares in favour of the trust for the exclusive benefit of the petitioner. Shri Datar, learned Senior Counsel, in order to substantiate his client?s apprehension made a reference to the civil appeal Nos. 6499-6500/2005 filed before the Supreme Court seeking directions against the petitioner?s mother for not renouncing or alienating in favour of third party, bonus or right of shares of six lakh shares of M/s. Gati Limited. Mahendra Kumar Agarwal, while transferring the shares has taken care of the interests of the petitioner. The petitioner was holding 6,00,000 shares in M/s. Gati Limited (CP. No. 2/2003) and when the Company came out with the rights issue, the trustees subscribed in the interest of the petitioner for 3,00,000 shares upon which the petitioner?s holding stands increased to 9,00,000 shares in the Company. All dividends in respect of the impugned shares would go to the trust and for the benefit of the petitioner. Mahendra Kumar Agarwal honestly felt that the trust would be safe in protecting the interest of the petitioner. The trustees do not derive any benefit. The petitioner does not suffer any prejudice on account of the transfer of impugned shares to the trust for his exclusive benefit. Even otherwise, the petitioner invoking the provisions of section 56 of the Indian Trusts Act is free to obtain back the shares for himself, thereby exercising full control over them. The petitioner is at present studying in USA and all his expenses are being funded by Mahendra Kumar Agarwal, thereby taking care of the interests of his son. The petitioner is the sole beneficiary under the trust excepting that the voting rights are controlled by the trustees. The plea of the petitioner that the trust has been created for fraudulent purpose lacks details and cannot be sustained. Under section 7 of the Indian Trusts Act, it is only when a person creating the trust is a minor, permission of a principal civil court of original jurisdiction is required, whereas in the instant matter, the trust was not created by or on behalf of a minor and, therefore, the trust created by the petitioner for the benefit of the petitioner is valid. There are a large number of private trusts validly created without the permission of the court. The Supreme Court in T.A.V. Trust?s case (supra), found that the trust was created by the minors not complying with the requirement of section 7 of the Indian Trusts Act and, therefore, it was declared as invalid. Thus, this decision has no application to the facts of the present case. There is no bar under section 8 of the Hindu Minority and Guardianship Act, for the natural guardian of a Hindu minor either for creating a trust or transferring any shares to such trust. Section 8(3) of the said Act stipulates that any disposal of the immovable property by natural guardian in contravention of sub-section (1) or sub-section (2), is voidable at the instance of the minor or any person claiming under him. In view of this, the sale deed, at the most on this ground can be treated only a voidable document and as far as voidable document, it is only a civil court has jurisdiction to grant the relief of cancellation of the sale deed as held in Vishram Singh v. District Judge, Etawah AIR 1996 All. 90. Furthermore, any contentious issue in relation to the legality or validity of a trust and whether such trust is beneficial to the minor cannot be raised before the CLB, but will have to be determined only by a competent court of law. In the present proceedings, the CLB is concerned whether the transfer of shares is for the petitioner?s benefit and not in violation of any law. The petitioner has not so far challenged before any civil court the validity of the trust created by Mahendra Kumar Agarwal for the benefit of either the petitioner or his brother. The scope of section 111 is restricted to a summary enquiry. If the very title to the holding of shares is challenged, such dispute will not be adjudicated in a summary proceeding. It is only the rights and liabilities which arise out of the provisions of the Companies Act, which can be enquired into in a company petition, but not the creation or validity of the trust as held by the Delhi High Court, while considering the scope of section 155 (now section 111) of the Act in Public Trustee v. Rajeshwar Tyagi AIR 1972 Delhi 302. The High Court of Punjab in S. Bhagat Singh v. Piar Bus Service Ltd. AIR 1959 Punjab 352, while considering the scope of section 38 of the Companies Act, 1913, which is analogous to section 155 of the Companies Act, 1956 (now section 111) concluded that the object was to provide a summary remedy in non-controversial matters or in matters where a quick decision was necessary in order to obviate an irreparable injury to a party. This provision was not intended for settling controversies necessitating a regular investigation. When serious disputes are involved, the proper forum for their adjudication is a civil court. The High Court of Punjab, while dealing with scope of section 155 (now section 111) in Smt. Soma Vati Devi Chand v. Krishna Sugar Mills Ltd. AIR 1966 Punjab 44 held that the remedy provided by that section is summary, which can be invoked in non-controversial matters requiring quick decision. This section is not meant to be used for deciding disputes requiring investigation. In the case of a dispute of complicated nature, necessitating a regular investigation, section 111 ought not to be allowed to be used and the party concerned should be directed to proceed by way of a regular suit. Thus, the controversial question whether the transfer of shares to the trust is beneficial to the petitioner or not cannot be settled by the CLB. All the 16,000 shares in relation to M/s. Giri Road Lines Private Limited (C.P. No. 6 of 2003), being the subject-matter of the transfer deed dated 28th March are still in the name of M/s. Grow Well Commercials and Trading Private Limited. Hence, the prayer of the petitioner cannot be granted. In these circumstances, the company petitions are liable to be dismissed, by which no prejudice would be caused to the petitioner.


4. Shri R. Shankaranarayanan, learned Counsel, in his rejoinder submitted that the petitioner cannot invoke the provisions of section 56 of Indian Trusts Act up to the age of 35 years in terms of clause 2(b) of the Trust Deed dated 18-10-2001. The only object of creation of the trust is to keep away the shares from the petitioner and deprive him of the benefits thereof. In the light of the decision of the Apex Court in Ammonia Supplies Corpn. (P.) Ltd. v. Modern Plastic Containers (P.) Ltd. [1998] 17 SCL 463, though section 111 conferred a summary jurisdiction, yet, the CLB would examine for itself whether the issues raised are complicated questions or not, without relegating the parties to a civil suit.


5. Dhruv Agarwal (son), Mahendra Kumr Agarwal (father) and Dhruv Agarwal Benefit Trust are common in all the company petitions. M/s. Karvy Consultants Limited is Mahendra Kumar Agarwal in C.P. Nos. 2, 4, 7 & 8 of 2003. The Companies involved in the company petitions belong to M/s. Gati Group of Companies. The contentious issues involved in all these company petitions are one and the same and therefore, they were heard together and are being disposed of by this common order.


6. After considering the pleadings and arguments of learned Counsel, the issue that arises before me is whether the Companies be directed to rectify the register of members by incorporating the name of the petitioner in respect of the impugned shares in the facts and in the circumstances of the present case? Before considering the contentious issue of rectification of the register of members of the Companies, on merits, I shall first proceed to go into the preliminary objections regarding (a) whether the claim for rectification of the register under section 111(4) is barred by limitation?; and (b) whether the controversial matters involved in the company petitions be adjudicated in a summary remedy by the CLB?


This Board on earlier occasions, while examining the question of period of limitation applicable to an application made under section 111(4) considered the decisions of the Supreme Court and various High Courts, particularly the decisions in Kerala State Electricity Board v. T.P. Kunhaliumma AIR 1977 SC 282 and Jagjit Rai Mani v. Punjab Machinery Works (P.) Ltd. 1995 (4) Comp. LJ 1101 (Punj. & Har.) and categorically held that there is no time-limit provided for making an application for rectification of the register of members under sub-section (4) of section 111 and, therefore, article 137 of the Limitation Act, 1963 would apply to any application preferred for rectification of the register, which prescribes a period of three years of the transfer of shares. In the present case, while the impugned shares were reportedly transferred in October, 2001, the company petitions have been filed on 20-1-2003, within the time prescribed under article 137 of the Limitation Act. Furthermore, it is not under dispute that the petitioner attained the age of majority on 19-11-2002. By virtue of section 6 of the Limitation Act, where a person entitled to institute a suit or make an application for the execution of a decree, is at the time from which the period of limitation is to be reckoned, a minor, he may institute the suit or make the application within the same period after the disability has ceased. In view of this, the petitioner having attained majority on 19-11-2002, is entitled to maintain the present applications filed within three years thereof, viz., 20-1-2003, which shall apply to all the companies herein.


It is far from doubt that the object of section 111 (old section 155) is to provide a summary remedy in non-controversial matters and that in the case of disputes of complicated nature, the parties must be relegated to a civil suit, as held in Rajeshwar Tyagi?s case (supra); S. Bhagat Singh?s case (supra) and Vishram Singh?s case (supra). The Supreme Court, while affirming the judgment of full Bench of the Delhi High Court in Ammonia Supplies Corpn. (P.) Ltd.?s case (supra), which held that the jurisdiction exercised by the company court under section 155 (now under section 111/111A) is discretionary and summary in nature, thereby any petition for rectification of the register of members involving controversial matters must be relegated to a civil suit and further observed that it would be appropriate, if the court would see for itself and examine whether what is pleaded is prima facie complicated question or not, without relegating the parties to a civil court. In Tracstar Investments Ltd. v. Gordon Woodroffe Ltd. [1996] 87 Comp. Cas. 942 (CLB-Mad.) while examining the issue whether in an application under section 111, involving serious disputed questions of facts or law and allegations of fraud, mala fides etc., whether the parties must be relegated to a civil suit, this Board came to hold that no restrictions could be put on the discretion of the CLB in dealing with matters under section 111(4) of the Act. Thus, the decision to relegate the parties in such cases is not mandatory, but depends upon the facts of each case. Accordingly, I shall proceed to consider these company petitions for rectification of the register on various accounts pleaded therein and see whether the controversial matters could be considered by myself or the parties must be relegated to a civil suit.


Sub-section (4) of section 111 provides, inter alia, that if the name of any person is, without sufficient cause, entered in the register of members of a company, the person aggrieved, or any member of the company, or the company, may apply to the CLB for rectification of the register. In this context, the grievances of the petitioner that the name of the trust has been, without sufficient cause and fraudulently, entered in the register of members of the Companies and that the impugned transfers are in violation of the provisions of the Indian Trusts Act, the Guardians and Wards Act, 1890 and the Hindu Minority and Guardianship Act must be examined. This Board in its decision in Tracstar Investments Ltd.?s case (supra), while examining the import of the words ?sufficient cause? as used in section 111(4)(a)(i) concluded that statutory violations or fraudulent or mala fide acts would constitute sufficient cause, rendering the transfer of shares invalid. The Delhi High Court in Rajeshwar Tyagi?s case (supra), while examining the scope of section 155 (now section 111) held that it is only the rights and the liabilities which arise out of the provisions of the Companies Act, which can be inquired into in a company petition. The legality or validity of a trust created by a company, if challenged, will have to be determined only by a suit in the civil court. Therefore, the CLB is not the competent forum for either questioning the validity of the trust in the light of section 4 of the Indian Trusts Act, which speaks of the purpose of creation of trusts or rigidity of its clauses elaborated by learned Counsel for the petitioner. In the light of section 7 of the Indian Trusts Act, a trust created by or on behalf of a minor without obtaining the prior sanction of a competent civil court is not a trust in the eye of law. It has to be borne in mind that the trust in question has been created by Mahendra Kumar Agarwal for the benefit of the petitioner, more particularly with the view of preserving and protecting the properties and assets belonging to the petitioner and his family. The decision of the Apex Court in T.A.V. Trust?s case (supra) holding that the trust created by the minors without complying with the requirement of section 7, viz., without the permission of a principal civil court of original jurisdiction is invalid, has no application to the facts of the present case. It is on record that the deed of trust has been created on 18-10-2001 for the benefit of the petitioner, the recitals of which unequivocally show that the settlor namely, Mahendra Kumar Agarwal has prior to the execution of the deed of trust handed over to the trustees an amount of Rs. 10,000 in cash, being corpus of the trust. Under the general law of trusts, a trust may be written or oral. The oral trust is recognized, as rightly pointed out by Shri Datar, learned Senior Counsel, by the Income-tax Act. Section 5 of the Indian Trusts Act defines trust of movable property thus : ?No trust in relation to movable property is valid unless declared as specified therein, or unless the ownership of the property is transferred to the trustee?. Therefore, the transfer of shares in M/s. TCI High Ways Private Limited; M/s. Gati Intellect Systems Limited and M/s. Giri Road Lines Private Limited, prior to creation of the trust by virtue of the deed of trust on 18-10-2001, cannot be challenged by the petitioner.


Section 4(b) of the Hindu Minority and Guardianship Act defines the word ?guardian?, which shall include a natural guardian. Section 6(b) provides that in the case of a boy or an unmarried girl the father and after him, the mother is the natural guardian. In view of this, the arguments of Shri Shankaranarayanan, learned Counsel that Mahendra Kumar Agarwal cannot be the natural guardian for given reasons do not hold good. Any natural guardian of a Hindu minor is bound to act subject to the provisions of section 8 of the Hindu Minority and Guardianship Act and is empowered to do any act, which is necessary or reasonable and proper for the benefit of the minor or for the realization, protection or benefit of the minor?s estate. This section further provides that the natural guardian shall not, without the previous permission of the court, mortgage or charge, or transfer by sale, gift, exchange or otherwise, any part of the immovable property of the minor or lease any part of such property beyond the period specified therein. Any such disposition must be only for the minor?s benefit or necessity, failing which such disposal of the immovable property is voidable at the instance of the minor or any person claiming under him. It is only a civil court has jurisdiction to grant the relief of cancellation of the sale deed as held in Vishram Singh?s case (supra). Section 27 of the Guardians and Wards Act stipulates that a guardian must deal carefully with the property of a ward as a man of ordinary prudence and do all acts which are reasonable and proper for the realization, protection or benefit of the property. By virtue of section 29 of that Act, a guardian contemplated therein shall not, without the previous permission of the court mortgage or change or transfer by sale, gift, exchange or otherwise, any part of the immovable property of his ward or lease any of such property beyond the stipulated term, failure of which any disposal of immovable property is voidable at the instance of any other affected person.


In the light of the above legal position, as borne out by the provisions of the Guardians and Wards Act and the Hindu Minority and Guardianship Act, it shall be seen whether the transfer of impugned shares is for the benefit of the petitioner or his estate before which, in my view, the background against which the impugned transfer of shares was effected in favour of the third respondent, will throw light on this contentious issue. The relationship between the petitioner?s parents has never been cordial and they are living separately. The petitioner, while a minor was in the custody of his mother. T

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here is a series of litigations between the petitioner, his mother and brother on one hand and Mahendra Kumar Agarwal, his father on the other hand in respect of the properties owned by them, of which the civil appeals filed by Mahendra Kumar Agarwal before the Supreme Court assume relevance, wherein, while the petitioner?s mother and one R.K. Bansal have been restrained from renouncing or alienating in favour of third party, bonus or right of shares of six lakh shares of M/s. Gati Limited, the dividend amount has been directed to be deposited in a separate account in the name of trust. The sequence of events shows that there is a complete lack confidence and trust between the petitioner?s parents. It looks that Mahendra Kumar Agarwal is suspicious of his wife, depriving the petitioner of his holding in a number of companies, while Mahendra Kumar Agarwal?s wife equally does not repose faith in him in relation to the assets held by the petitioner. It is in this backdrop, the creation of trust and the transfer of shares to the trust prime facie appear to be for the protection and benefit of the petitioner?s estate. It is seen from the recitals of the trust deed dated 18-10-2001 that the trust has been created for the benefit of the petitioner with the view to preserve and protect the properties and assets belonging to him for his benefit and the benefit of his family. The trustees shall pay to the petitioner until his attaining the age of 35 years, the net annual income of the trust fund and the investments thereof. The petitioner shall be absolutely entitled to the trust fund and the investments in the trust on the date when he attains the age of 35 years. The trust deed provides for devolution of the trust fund in the event of death of the petitioner before attaining the age of 35 years. Thus, it is clear that the petitioner is the sole beneficiary of the trust, of course, saddled with the restrictive covenant elaborated hereinabove. In the facts and circumstances of the present case, the transfer of shares to the trust for the exclusive benefit of the petitioner, though restrictive, to my mind, cannot be said to be violative of the provisions of either the Guardians and Wards Act or Hindu Minority Act or fraudulent or without sufficient cause, as claimed by Shri Shankaranarayanan, learned Counsel. Similarly, I do not find any merit in the plea made on behalf of the petitioner that the transfer of shares to the trust has been made with the object of depriving the petitioner?s mother from deriving any benefit out of those shares, especially when this is not the yardstick to determine the validity of the transfer and more so when the petitioner?s benefit or his estate assumes paramount importance. I, therefore, do not hesitate to hold that the transfer of impugned shares to the trust is not in violation of the provisions of the Guardians and Wards Act or the Hindu Minority and Guardianship Act and that the transfers are for the benefit of the petitioner. Accordingly, the company petitions are dismissed. No order as to costs.
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