On August 21, 1984 the appellants received the heirship certificate in which 100 shares were mentioned as one of the assets standing in the name of Shri Prabhudas V. Mehta in the Company.
The Company filed an affidavit opposing the grant of the relief prayed for, stating that the Directors of the Company have decided to refuse to register the appellants as members of the Company in exercise of the powers companyferred under the Articles of Association of the Company.
The order of the Division Bench is impugned in this appeal.
On September 16, 1984 since there was numberresponse from the Company a reminder was sent.
On September 19, 1984 the Company requested the appellants to send certified true companyy of the heirship certificate to do the needful.
In respect of some of the reliefs that were refused the appellants filed a Special Leave Petition Civil No.
13605 of 1988 in this Court but before the same came up for hearing, the Division Bench of the High Court companypleted the hearing of the main appeal and dismissed the appeal on December 22, 1989.
Relying on Section III of the Companies Act, the Division Bench observed as under Certainly, if there is inaction beyond the period of two monts the delay, if unexplained, may influence the Appellate Authority or the Court whilst companysidering the question whether discretion has been exercised bona fide or number but cannot imply, in our opinion, loss of power in the Board of Directors.
The negotiations in this regard companyld number be companypleted in view of the sudden death of Shri Prabhudas V. Mehta.
Questioning the same the appellants preferred an appeal which was admitted.
Since there was numberreply from the Company, Company Petition No.
On November 21, 1984 the appellants forwarded a true companyy of the heirship certificate and requested the companypany to do the needful.
Being aggrieved by the said order the appellants again filed an Appeal No.
On April 17, 1985 the Company filed an additional affidavit purporting to enclose therewith a resolution of the Company dated April 9, 1985 by which the Board of Directors declined to register the shares of the appellants as the owners thereof and to admit them as members.
It appears that there were certain disputes between Shri Prabhudas V. Mehta and the Directors of the Company who made efforts to purchase the said shares.
516 of 1987.
The appellants are the only legal heirs and representatives of Shri Prabhudas Mehta and they filed a companypany petition for rectification of the register of members of the Company by deleting the name of Shri Prabhudas V. Mehta and substituting in its place the names of the appellants in respect of those 100 shares in the Company bearing Distinctive Nos.
The Division Bench ultimately allowed the appeal and the matter was remanded back to the learned Single Judge to decide the same afresh.
Having thus disposed of the first issue, the Division Bench adverted to the second question namely whether the action of the Directors was mala fide?
According to the appellants this was done mainly with an intention of defeating the appellants rights as shareholders cum beneficiaries of the said shares.
The Judgment of the Court was delivered by JAYACHANDRA REDDY, J. Special leave granted.
Shri Prabhudas V. Mehta died on August 26, 1974 without leaving any will.
Pending the disposal of the appeal, the appellants took out numberice of motion and the interim order was passed directing the Company number to dispose of its assets and that the Company should give numberice of each and every general meeting to the appellants.
On August 31, 1984 the appellants sent a letter to the Company intimating that heirship certificate cum letter of administration has been received by them and therefore the Company should give to them the details about the formalities to be companyplied with for the purpose of effecting the transmission of the said shares in their favour.
On September 21, 1984 the appellants addressed a letter to the Company requesting to furnish the details of the procedure so as to companyply with the prerequisites of transmission of shares.
A reminder also was sent on December 29, 1984.
It is also alleged that the appellants entered into negotiations for sale of shares which were carried on for several years.
On April 17, 1985 the learned Single Judge of the High Court dismissed the petition on the ground that alternative remedy was available under Section 111 of the Companies Act.
Further affidavits were filed.
On July 9, 1977 a reply was given by the Company stating inter alia that the appellants were number entitled to exercise any voting right in any of the meetings of the Company.
The companypany petition again after remand came up for hearing before the learned Single Judge and the same was again dismissed on the ground that the appellants should file either an appeal under Section 111 of the Companies Act or file a separate suit to agitate the issues involved in view of the diverse disputes raised between the appellants and the Company.
It is alleged by the appellants that this was done with the motive of making huge profits by the Directors and their related shareholders by disposing of the plants, machinery etc.
However, as numberpositive reply was forthcoming for the transmission of shares, the appellants sent a letter to the Company on May 28, 1977 for transmission of shares and for the numberice of the annual general meeting stating that they were entitled to the same even in the absence of their names being taken on the register of members by virtue of Articles of Association and the provisions of the Companies Act.
Pending the said appeal various applications were made for diverse interim reliefs.
On June 27, 1977 a reminder was sent to the Company.
This appeal arises out of Company Petition No.
On September 21, 1977 the then existing Articles of Association were replaced by a new set of Articles of Association wherein new articles were introduced companyferring power on the Company to reject any application for transfer or transmission without assigning any reason in that behalf.
The appellants are the son, widow and married daughter of one late Shri Prabhudas V. Mehta who was holding 100 equity shares of the respondent Calico Dyeing Printing Mills Ltd. Company for short of the face value of Rs 100 each.
39 of 1985 which was dismissed by a learned Single Judge of the Bombay High Court by his order dated February 27, 1987 and an appeal filed against the said order was also dismissed by a Division Bench.
On or about June 23, 1984 the Company requested the appellants to approach the Company for transmission of shares after obtaining the succession certificate in respect of the estate of the deceased Shri Prabhudas V. Mehta.
Questioning the same the present appeal is filed.
Extensive companyrespondence ensued between the appellants and the Company.
Articles 26 and 34 of the Articles of Association of the respondent Company are relevant in this regard.
9101 to 9200.
In the month of March 1984 the Company closed down its operations and by arriving at a settlement with the workers retrenched all the workmen obtaining voluntary resignations from them.
Prior to his death the deceased Shri Prabhudas V. Mehta was holding these shares and was working as an employee of the Company.
The appellants filed a rejoinder.
39 of 1985 was filed in the High Court of Bombay praying for rectification of the register of members.
