NISHANT
Oppression/Mismanagement
NISHANT MEHROTRA 25 Jan 2018

Oppression/Mismanagement

Company Law Board :: in Actimus Biosciences (P.) Ltd. and others v. Smt. C Ananta Satyavati and another :: Companies Act, 1956 – Sections 111A, 397/398, 399 and 402 – Oppression/Mismanagement – Petition for relief against – Composite petition seeking relief both under section 111A and section 397/398 – Application questioning locus standi of respondent-petitioners to maintain company petition on ground that respondent- petitioners have sold shares and accepted consideration therefor and are no longer members eligible to file petition seeking relief against oppression/mismanagement – Whether it is settled proposition of law that transfer of shares would be complete between the transferee and the transferor only when the instruments of transfer are signed and share certificates are handed over, and the company could take cognisance of the same only when the transfer instruments along with the share certificates were lodged in terms of relevant articles of the articles of association of the company – Held, yes – Whether, therefore, the Board of directors of the company could not register the transfer of shares in this case on the strength of mere communications of the petitioners – Held, yes – Whether, furthermore, where there were also disputes with regard to consideration and terms of contract of sale of shares, which could not be gone into at the preliminary stage, it could not be concluded that the petitioners are not shareholders as in this case, in the absence of undisputed material – Held, yes – Whether, therefore, this company petition could not be rejected at the threshold on the ground that the petitioners did not have the locus standi under section 399 to maintain the composite petition – Held, yes [Para 4].

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