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S.N. Harish and Savitha Harish v/s Pods Biotech Private Limited, Ramesh P. Gowda, B. Chandrashekar and Ramya Gowda

    No----
    Decided On, 13 May 2008
    At, Company Law Board Additional Principal Bench Chennai
    By, KANTHI NARAHARI
    By, MEMBER JUDICIAL
   


Judgment Text
Kanthi Narahari, Member Judicial

1. The present application is filed by the applicants/petitioners seeking direction from this Bench to send the share transfer form and resignation letter dated 24.02.2006 to the Forensic Sciences Department for the purpose of verification and comparison of signatures of the second applicant in the said documents.

2. Shri P.H. Arvindh Pandian, learned Counsel for the applicants submit that the second respondent has illegally removed the second applicant as a director and also as a shareholder by filing resignation letter dated 24.02.2006 and share transfer deed with forged signatures. The learned Counsel submits that the second applicant herein neither resigned nor transferred her 5000 shares in the first respondent Company to any other person and the same are forged and fabricated. Further he submits that the second respondent has removed the second applicant both from her directorship and membership by adopting illegal means and methods by way of filing forged and fabricated documents and acted with a malafide intention to oppress the applicants and hijacked the first respondent Company.

3. The learned Counsel prayed that this Hon'ble Bench should come to her rescue, interfere and direct the Bench Officer to send the disputed signatures on the resignation letter dated 24.02.2006 appended to the application as Annexure-A page 5 and Share Transfer Form at page-6 as Annexure B to the Forensic Sciences Department for its expert opinion. The learned Counsel also submits that the Company Law Board has power under Section 10E(5) of the Companies Act, 1956 and according to the said section and also under Regulation 44 of the Company Law Board Regulations, 1991 can exercise its powers to send the documents to the Forensic Sciences Department for its opinion in the interest of justice.

4. Shri R. Senthil Kumar, learned Counsel for the respondents filed detailed counter wherein he traversed the allegations of the applicants and submits that this Bench cannot decide issue of forgery in a summary proceedings under Section 397/398 of the Companies Act, 1956 ("the Act) as it involves complicated question of facts and serious controversies which necessitated detailed investigation which would defeat the object of the summary remedy under Section 397/398 of the Companies Act, 1956.

5. The learned Counsel further submits that in the interest of justice and equity this Hon'ble Bench may summon and examine the witness to share transfer deed to verify the authenticity of the signature at most but this Bench should not send the documents to the Forensic Sciences Department for its opinion. 6. In support of his contention the learned Counsel relied upon the following judgments:

i) CDS Financial Services (Mauritius) Limited v. BPL Communications Limited and Ors. (2004) 121 CC 374 - Where as the Hon'ble High Court observed that "However, in case any claim is based on some seriously disputed civil rights or title, denial of any transaction or any other basic facts which may be the foundation to claim to be a member and if the court feels that such claim does not constitute to be a rectification but instead seeking adjudication on basic facts falling outside the rectification, it has discretion to send a party to seek his relief before the civil court first for the adjudication of such facts.

ii) Ansar Khan and Anr. v. Finecore Cables Private Limited and Ors. Order dated 05.10.2006-CLB - this Bench observed that "The disputes involve substantial rights of the parties and where the allegations are forgery and fabrication of records, which could only be resolved by oral testimony tested by cross examination of witnesses, cannot be resolved on the strength of the averments made in the affidavits filed by the parties, defeating the purpose and object of the summary procedure prescribed by Section 397/398.

iii) Shri Jiwan Mehta v. Emmbros Forging (P) Limited and Ors. order dated 20.11.2007-CLB - The Bench held that "In the absence of any specific allegation, this Company Law Board cannot adjudicate on such allegation, which require trial. Issues of Forgery cannot be decided by the Company Law Board in summary proceedings under Section 397 and 398 of the Companies Act, 1956 as held by the CLB and the Hon'ble Supreme Court in a number of judgments". The Bench replied upon the judgment of Chennai Bench as stated above at S. No. (ii).

In view of the decision of the Courts/Bench the learned Counsel requests that this application to be dismissed since it is devoid of merits.

7. In reply Shri P.H. Arvindh Pandian, learned Counsel submits that it is not the first occasion where the documents are being sent to the Forensic Sciences Department for its expert opinion in case of disputed signatures. He further contended that unless the documents with the disputed signatures are sent to the Forensic Sciences Department for comparison with the admitted signatures the truth will not come out and the applicants will be put to hardship and irreparable loss.

8. Heard the learned Counsel for the parties. On the directions of this Bench, the learned Counsel for the respondents produced the original resignation letter and share transfer deed before the Bench Officer and the same is taken on record. In so far as examination of witnesses is concern this Bench unequivocally has powers to examine them under the Act.

9. CDS Financial Services (Mauritius) Limited v. BPL Communications Limited and Ors. (supra) - the Court held that adjudication of basic facts falling outside the rectification, it has discretion to send a party to seek his relief before civil court first for their adjudication or such facts. In this case, the facts and legal issues are not outside the purview or rectification hence the above decision is not applicable to this case.

10. Ansar Khan and Anr. v. Finecore Cables Private Limited and Ors. and Shri Jiwan Mehta v. Emmbros Forging (P) Limited and Ors. (supra) - However this judgment cannot be made applicable since the facts and circumstance vary from that case and the Bench observed that "it is of course not mandatory that whenever allegation of fabrication of records made, the parties should be relegated to a civil suit".

11. Time and again it is held that the C ,B has adequate jurisdiction and powers to enquire into the allegation of mismanagement including allegations of malafide and grant reliefs as held by the Apex Court in Ammonia Supplies Corporation v. Modern Plastic Containers Private Limited quoted in 1998 AIR (SC) 3153.

12. Sending documents to the Forensic Sciences Department is also a part of enquiry while dealing matters under Section 397/398 of the Act. The definition of forgery has been given under Indian Penal Code. In the present case counsel for the applicants submits that the said documents are forged whereas counsel for the respondents denies the same. In these circumstances, it is to be ascertained by the Bench, whether such forgery has been committed or not. Further, the Forensic Sciences Department after comparing the signatures in the admitted documents with other documents will only give its report whether the signatures is the genuine or not. The said Department will not decide whether that signature is forged or fabricated.

13. In view of the above, I am inclined to send the original documents i.e. Resignation letter and Share Transfer deed to Forensic Sciences Department for compa

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rison with the admitted signatures of the second applicant herein for its opinion. 14. Therefore, I hereby direct the second applicant to produce the admitted signatures before the Bench Officer to enable this Bench to send the same to the Forensic Sciences Department for comparison with the disputed documents on or before 23.05.2008 and further direct to forward copy of the admitted signature to the respondents. After receipt of the admitted signatures, the Bench Officer will forward the original Share Transfer Form and Resignation letter along with the admitted signatures of the second applicant to the Forensic Sciences Department. The expenses of the Forensic Sciences Department shall be borne by the applicants. With the above directions the C.A. No. 60/2008 is disposed of. The matter is posted on 19.06.2008 at 10.30 A.M.
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