NCLT dismisses case for lack of evidence in support of forfeiture of shares being invalid and illegal. Fine no evidence to support oppression by Respondents.
In the matter of Greenline Transit System Pvt. Ltd (Petitioner) vs. Airone Aviation Pvt. Ltd & Ors. (Respondents), Petitioner has filed a petition under sections 397, 402, 403 and 111 of the Companies Act, 1956 (the Act) alleging oppression by the Respondents. Petitioner alleges that Respondents have illegally and fraudulently forfeited the Petitioner’s partly paid share capital amounting to 49% of the shareholding and that the Petitioner has not been reflected as the owner of the 2% fully paid up shareholding. The Petitioner claims that the alleged forfeiture is fraudulent, illegal, null, void and invalid.
NCLT peruses the documents on record and observes that Petitioner has been unable to provide with any document issued by the ROC recognising it as a member of Respondents as defined under section 41 read with section 2(27) of the Act. NCLT reiterates the requirements of the provisions and notes that a condition precedent of membership is that the name of the person in question is to be entered in the register; secondly such a person may be regarded as a member if he has acquired the right of membership although his name is not in the register. NCLT further states that in case of transfer of shares the provisions of section 108 of the Act have to be complied with and that there are numerous conditions that need to be fulfilled before a company can lawfully register a transfer.
NCLT observes that according to the petition, Petitioner was supposed to infuse a sum of Rs. 43,22,10784/- into the account of one of its directors Mr. Ajay Singh towards share application and share application money. A sum of Rs. 96,07,840/- was to be appropriated for the immediate issuance of 9,67,784 equity shares of a face value of Rs 10 at par, partly paid up for sum of Rs. 0.10 per share.
NCLT disagrees with the claim of Respondents that the share certificate were issued and a blank transfer application form was also issued keeping in view the fact that the NOC for operating the Scheduled Passenger Airline was issued on the ground that the time limit for issuance of the NOC for operating Schedule Passenger Airline in the SSA dated 06.12.2010 was six months which expired on 06.06.2011 but the NOC was granted on 28.06.2011 and this resulted in the forfeiture of token money paid for 9,67,784 shares of a face of Rs. 10 at par partly paid up for sum of Rs. 0.10 per share. NCLT notes that the existence of the SSA and the escrow agreement were referenced in the emails between the parties. NCLT noted that the Escrow Agent Ms. Renu Data was in correspondence with Petitioner and hence discarded Petitioner’s submission that it did not know any Escrow Agent. NCLT further noted that the Escrow Agent was paid a fixed sum as a fee.
NCLT observed that the SSA and the escrow agreement should have been admitted on record and that Ms. Renu Data was also a necessary party to the proceeding.
NCLT held that, “ We have failed to understand why the agreement between the parties have not been produced on record and why Ms. Renu Data has been a necessary party as per presence before the Court was most important. However, we are of the considered view that the version adopted by the petitioner is far from satisfactory and does not inspire confidence by keeping in view the rudimentary principles and pleadings and law of evidence. Therefore, the petition is devoid of merit and is dismissed.”
Hence, NCLT dismisses the case for lack of merit.