Prabhakar Processors Pvt Ltd & Ors vs Kusumdevi Tibrewal & Ors

27.04.2017- The appellants have challenged the order dated 2 Jarmuary, 2017 passed by National Company Law Tribunal, Ahmedabad Bench, Ahmedabad thereinafter referred ta as the "fSribunal® for short} in TP. No. 27 /307-398/NCLT/AHM/ 2016 iNew), CP No.$9/397-808 /CLB/MB/ 201 210ld). Vide the impugned arder the Tribunal derided the primary issue as te whether the respondents/petitioners are members of the Respondent company.

The main grievance of the appellants are that the Learned Tribunal while deciding the issue observed at paragraph 14 that the definition given in any enactment can be apphed to the provisions im the Act or by analogy to other Acts but mot to agreements between the parties in violation of provisions of the India Contract Act. It is contended that the Tribunal under Section 397 and 398 of the Companies Act, 1956 has no jurisdiction to give such declarstion.

We have heard the Learned counsel far the appellant and perused the recerd. Appearance have also heen Aled on behalf of

the coritesting respondents,

F rom the impugned order it is clear that the appellanis who were contesting respondents before the Tribunal raised the question of maintainability of petition under Section 397 and 398 of the Companies Act, 1956 on the pround that the respondents / petitioners are not the shareholders and, thereby, do nat have the locus standi to Ale the petition. The said stand was taken by the appellanta on the ground that one MOU was reached between the appellants and respondents (petitioners) on 16% April, 2011 pursuant to which they have already accepted money and,

therefore, shares stands transferred.

From the bpuened order we find that the Tribunal while discussing the stand taken by the parties on the question of transfer

of shares made following observations:

"I3.The MOU dated 164.2011 is signed by Mr. Rakesh Agarwoul Mr Mukesh Agarwul and Mr. Ashok Kuror fibrewal on behulf of the Nbrewal group. Admitted, the signatures of pelifioners cre not there on MOU dated i6,4.2012, Although it is stated in MOU that the cansent letters of all the shareholders have been attached, no such consent letters are there. No doubt there was resignation of Directors and revocation of Bank guarantees pursuant to MOLL AM's Bhaskar Suk Mills Pet Lid aru Prabhakar Processors Pet Lid are twe different corporate entities. Undess and unul in pursuance of the MOU, shareholders in. beth the companies transfer their shares following the procedure laid down under the Act and Articles of Assaciition, if cannot be said thet Petitioners or for that matter any other shareholder who is not a signatory to MOU ceused to be a shareholder of the company. Had the petitioners been signatories fo the MOU then the binding nature or ofheruise of the MOU can be challenged in a Cm Court, When petitioners continue ta be shareholders of the first respondent company ard they are having required shareholding in the company i cannot be said thet they are not entitled to file this petition for oppressian and mismanagement etc."

i4.i ws contended by Learned Advocate for Respondents that the close relatives of Petitioners signed an MOU dated 1&42011 and definition of "relative" in Section 2/91} read with Section 6 of Companies Act, 1956 can be agpNed to hind the Petitioners although they have not signed on the

MOU. This argument of learned counsel for respandents dees not merit acceptance for the simple reasen that definition given in any Enuctment can be qonted to the provisions in the Act or by analogy ta other Acts but nat to agreements between parties in violation of the Indian Cantract Act,

itis abvious that the definition of "relative" in Section: 2¢4 1}

of Companies Act 1956 is applicable ta Section 29° of

Comparties Act, 1956."

From the aforesaid findings it will be clear that to decide the question whether the respomdents/petitiensrs have ceased to be shareholders or not, the Tribunal has not refused ta rely on the MOU on the ground that any agreement against the provisions of Indian Contract Act cannot be noticed.

Having heard the learned counsel for the appellants and on perusal of the record, we are of the view that the observation made by the Tribunal at paragraph 14 of the impugned judgement cannat be treated to he a finding with regard to the validity of the MOU reached between the parties on 16.4.2G11. Ibis merely a premise view tp decide the question whether shares stood transferred.

Further, as admittedly the shares have not been transferred in favour of the appellants In accordance with law, Le. noe entry having made in the register of the company, we hold that the respondents / petitioners continue to be shareholders nll their shares are regiatered in the name of ather persons. For the reasons aforesaid we are not inclined to interfere with the impugned Judgement dated 21.2017.

However, we make it clear that the order passed by the Tribunal or by Appellate Tribunal will not come in the way of the appellants in

registering thelr mame, if transfer is gemuine and in accordance with lave, The appeal stands disposed of with the aforesaid observations. No oast.

(lastice S.J, Mukhopadhays) Chalrpersant

iMr. Balvinder Singh) Member (Technical)