Margaret T. Desor And Ors. vs Worldwide Agencies Pvt. Ltd. And ...
1988 Latest Caselaw 269 Del

JUDGMENT

Mahinder Narain, J.

(1) This order will dispose of a preliminary objection taken by respondent No. 2, Mrs. Amrit K. Singh, regarding the maintainability of the petition under Sections 397, 398 and 433 of the Companies Act, which has been filed by the petitioner Margaret T Desor and two others.

(2) The petition relates to the affairs of M/s Worldwide Agencies Pvt. Ltd., which is carrying on business as travel agents at G-40 Connaught Circus, New Delhi. According to the information that is available from a certified copy of the annual returns of M/s. Worldwide Agencies Pvt. Ltd., as on 16th February, 1976, M/s. Worldwide Agencies Pvt. Ltd. had the following shareholders :- 1. S. Amrit Singh Saluja - 5 shares 2. S. Balwant Singh - 405 Shares 3. Mrs. Surinder Kaur Sdluja - 450 shares 4. Mr. Tarlochan Singh Saluja - - 5. Mr. Yash Pal Malhotra - 250 Shares 6. Mr. Surinder Kumar Desor - 550 shares 7. Mrs. Amri K. Singh - 350 Shares __________________ 2010 shares __________________

The said annual returns also record that 350 shares of Tarlochar. Singh were transfered to S.K. Desor Or 12-8-1975. and 350 shares of Mrs. S. K. Saluja were transferred on 7-8-1975 to Mrs. Amrit K. Singh.

(3) Surinder Kumar Desor was a British national as was Amrik Singh. Balwant Singh and Yash Pal Molhotra were Indians.

(4) As per the certified copy of the annual return. M/s, Worldwide Agencies made up to 15-2-1984. the shars holders were S. K. Desor, Mrs. Amrit K Singh, Yash Pal Malhotra. Mrs. Anirit Gupta, Mrs, Savitri Devi Kohli, Mr. A. S. Saluja and Mr. Balwant Singh. They held the following shares :-- 1. S. k. Desor - 600 shares 2. Mrs. Amrit Kaur Singh. - 545 shares 3. Mr. Yash Pal Malhotra - 250 shares 4. Mrs. Amrit Gupta - 200 shares 5. Mrs. Savitri Devi Kohli - 5 shares 6. Mr. A.S. Saluja - 5 shares 7. Mr., Balwant S - 405 shares ___________ 2010 ___________

(5) It is obvious that S. K. Desor was the largest shareholder of M/s. Worldwide Agencies.

(6) The allegations in the petition arc that Mrs. Margaret Desor was married to S. K. Desor in England, where they stayed for a number of years, and the second petitioner was horn to S. K. and Margaret Desor in England, and the third petitioner had been born to S.K. and Margaret Desor in India.

(7) It is slated in the petition that after the marriage, S. K. Desor and Margaret Desor returned to India with the second pelitioner. By way of abundant caution the marriage between S. K. Desor and Margaret Desor was registered under the Special Marriage Act in the year 1972.

(8) It is stated in the petition that the third petitioner was born in India, that the first petitioner is a British subject, and the second Petitioner is a British citizen

(9) S. K. Desor died on 5th March, 1985.

(10) It is also asserted in the petition that the second petitioner has relinquished her rights, if any, to the shares which were held by her father S. K. Desor, and as far as the third petitioner-minor, is concerued, it is stated that such shares as can be held by petitioner No. 2, shall be held by petitioner No. 1 as guardian of petitioner No. 3.

(11) It is asserted in the petition that while in England, S. K. Desor was carrying on business of Travel Agency in which Margaret Desor. assisted her husband and. and it is .when she returned to India, that she became house-wife, and did not participate in The travel agent business of M/s. Worldwide Agencies.

(12) It is also asserted or the petition that 545 shares which arc shown as being held by Mr. Amrit K. Singh, are held by her benami for S. K. Desor. and that appropriate steps in respect thereto will be taken at the appropriate time.

(13) In the petition. it Is also asserted that or the death of S. K. Desor the office of M/s. Worldwide Agencies was closed for 5th, 6th and 7th March, 1985.

(14) It is also asserted that meeting of the Board of Directors took place on 12th March, 1985, at which meeting Margaret Desor. petitioner No. 1, was co-opted on the Board of Directors by resolution of that date, but has not been allowed to function as such.

(15) It is also asserted that petitioner No. 1 was present at the said meeting of the Board of Directors, and petitioner No. 1 applied to the Directors present, for the transfer of the shares held by her late husband, S. K. Desor, to her name as his wife and legal heir. She has also furnished an affidavit of Mrs. it- Paul petitioner No. 2, relinquishing her claim to the share held by her late father. It is staled that in view of the application and the affidavit furnished by her and daughter of S. K.Desor. the Board of Directors have resolved that they have no objection to transmit the shares held by S. K. Desor and Mrs. Margaret Desor on executing an indemnity beod. It was resolved that actual transfer of shares, however. will take effect after permission of the Reserve Bank of India has been obtained by petitioner No. 1, and succession certificate has been obtained with regard to properties of S, K. Desor.

(16) The Board recorded that Mrs. Margaret Desor has applied for allotment of 5 shares vide her letter dated 12th March, 1985, and she has undertaken to make payment within one week. The Directors recorded that they have no objection to it, and it is resolved to allot her 5 shares out of the unsubscribed capital of the company. and that the shares will be issued soon. The Board further resolved that in view of the allotment of these shares, and her interest in the shares of her late husband, S. K. Desor, Margaret Desor is appointed a Director of the company subject to the permission of the Reserve Bank of India.

(17) In the petition, in support of the pleas of oppression, it is alleged that the conditions that were imposed by the Board of Directors retarding the succession certificate and indemnity were onerous and oppressive.

(18) It is asserted in the petition that taking advantage of the fact that the keys of the premises of M/s. Worldwide Agencies Pvt. Ltd. were with her, Mrs. Amrit K. Singn, has removed valuable belonging to Mrs. Margaret Desor, which had been. kept by S. K. Desor in the safe of the Company.

(19) It is also asserted the Mrs. Amrit K. Singh has also operated the bank account of the company without informing the bankers of the company of the death of S. K. Desor, and withdrawn about Rs. 40,000 from the bank on the pretext that this amount was needed to pay the salary of the staff of M/s. Worldwide Agencies Pvt. Ltd, whereas only a sum of Rs. 8,000 was payable.

(20) It is also alleged that Mr.. Amrit K. Singh refused to give account of R.s. 40,OO0 which had been withdrawn by her after the death of S. K. Desor.

(21) It is. also stated in the petitioner that on 12-3-1985 Mrs. Amrit K. Singh filed a suit bearing No. 430 of 1985, seeking a declaration that she was director in charge of the company, and was entitled to function as such without let or hindrance by the defendants in the said suit. The dependants in the said suit were stated to be Mrs. Margaret Desor. petitioner (defendant No. 1), and Sameer Desor., petitioner (defendant No. 2) In the suit, father of S. K. Desor and his two brothers were. made defendants No. 3,4 and 5 respectively, and the company was made defendant No. 6.

(22) In the suit, Mrs.. Amrit K. Singh also sought a direction that defendants No. 1 to 5 in the suit were not shareholders of the company, nor are they concerned with it in any capacity whatsoever, that defendants No 1 to 5 be directed not to interfere in the affair-;of the company and that it be. declared that Mrs. Amrit K. Singh was the director in charge, and that she be permitted to function without let of hindrance. A copy of' the said plaint was annexed to the instant petition.

(23) The petitioner in this petition asserts that the said suit bearing No. 430 of 1985, was filed duly with a view to harass petitioners as well as to wrongly and illegally capture the control of the affairs of the company.

(24) It is also asserted in the petition that the documents of the company were removed by Mrs. Amrit K. Singh.

(25) It is also asserted in the petition that notice was addressed to Mrs. Amrit K. Singh regarding a meeting of Board of Directors to be held on 12th March, 1985 at 10.00 A.M" but she did not attend the same.

(26) In these circumstances, it is said that the affairs of M/s. Worldwide Agencies Pvt. Ltd. arc being managed in the manner prejudicial to the interest of the company and oppressive to the petitioners.

(27) Various other pleas are raised in the petition, and the reliefs sought in the petition are : (i) removal of Mrs. Amrit K. Singh from the office of the director, (ii) appointing the first petitioner, Mrs. Margaret Desor as Chairman-cum-Managing Director of the company; (iii) directing the Board of Directors fo register the transmission of shares of S. K. Desor in the name of the first petitioner; (iv) and directing Mrs. Amrit K. Singh to transfer 545 shares, In the alternative, prayer was made to wind up the company.

(28) The main objection to the maintainability of this petition before me, is; (i) that the petitioners are not registered as members of the company; their names are not recorded in the register of members; (ii) they are, therefore, not members within the meaning of the Companies Act, and particularly Section 399 of the Act, and as such they cannot present a petition under Sections 397/398 of the Act; and (iii) that a composite petition as filed, wherein an alternative prayer made for winding up the company, is not maintainable.

(29) Mr. P. B. Menon, who appears for Mrs. Amrit K. Singh respondent No. 2, and for M/s. Worldwide Agencies, respondent No. 2, says that it is only members, who are recorded as a member in the register of members, who are entitled to file a petition under Sections 397 and 398 of the Companies Act.

(30) It must be borne in mind that the petitioners in this case claim to be heirs of S. K. Desor, deceased, and claim that they have become owners of the shares held by him as such, by transmission, by operation of law.

(31) Collins English Dictionary, 1979 Edition, given the following meaning to the word "transmission"- (i) The act of process of transmitting: (ii) the act of process of sending a message, a picture, or other information from one location to one or more other locations by means of radio waives, electric signals, light signals etc. Transmission is stated to be derived from the word 'transmission' which is said to mean "sending across". It appears that transmission takes place from one point to another instantaneously without let or hindrance, as in the case of transmission of radio waives and electric signals etc. "Transmission" should, therefore, mean an immediate or instantaneous sending across. In this sense, when one is dealing with transmission of shares, it must mean that upon the death of last holder of shares, in law, there is instantaneous transfer of ownership to the heirs of the last holder, and the property therein must vast in the heirs from the moment of death onwards. This would happen by virtue of operation of Law of Succession. To complete the formalities of law, it may be necessary in certain cases to apply for succession certificate or letters of administration, but the property must be deemed to have been vested not on the date of grant of succession certificate or the letters of administration, but the succession certificate or the letters of administration recognises the pre-existing change of ownership from the deceased holders to the heirs, which occurs at the moment of death. This position, that ownership of property rights vis-a-vis the shares held by the deceased is transferred to the heirs of a deceased holder is recognised by necessary intendment by the proviso to Section 108 of the Companies Act. It says that "nothing in this section shall prejudice any power of the company to register as shareholder or debenture-holder any person to whom the right to any shares in, or debentures of, the company has been transmitted by operation of law". This exception is carved out against the requirement of section 108 of the Companies Act, which requires that shares of a company are not to be transferred to another person without an instrument of transfer postulated by that section. Clearly there is a difference between transfer of a share, which is voluntary act of a shareholder to another person, and the transmission of a share to an heir by operation of law. In the instant case, it must also be borne in mind that the Board of Directors have at no stage refused to register the transmission of shares in the name of the petitioners.

(32) A number of cases have been cited by Mr. Menon in support of the contentions that have been raised by him in connection with the non-maintainability of this petition under Sections 97, 98 and 433 of the Companies Act.

(33) The first case cited by Mr. Menon is (1981) 51 Company Cases 660 (Smt. Bina Barua and others v. Dalowjan Tea Co. (P) Ltd. & anothers)(1). This is a case decided by Guwahati High Court, wherein the Hon'ble Single Judge has been pleased to hold that the Board of Directors of the company were right in refusing to register the shares in the name of the widow and the sons of the deceased. The Hon'ble Judge came to the conclusion that the exercise of power of refusal by the Board was, in the facts and circumstances of the case, bonafide. A perusal of the judgment would show that the Board of Directors of the company who had refused to register the shares, were members of the same family as the deceased member, whose widow and children sought to have the deceased member's shares registered in their names. It was asserted and contended that the widow of the deceased was a person of doubtful character, that she had left the deceased during his life time, and that she was living with some one else, and in these circumstances, it would not be in the interest of the company to have her substituted as a member in place of the deceased, member. This case, therefore was one in which the Board of Directors of the company who were members of the same family as the deceased, had refused to register widow and her sons as share holders. In the instant case before me, there is no refusal by the Board of Directors to register the shares in the name of the widow and the children of the deceased S. K. Desor. What the Board required was that the petitioners should obtain succession certificate, and also obtain permission of the Reserve Bank of India to hold the shares as the petitioners were not Indian national. This resolution of the Board of Directors, in my view, cannot amount to a refusal to register the petitioner and her children as members. The cited case, therefore, has no application to the present case. It is also to be noted that in the reply it is nowhere contended or stated by the. respondent company, that the Board of Directors has refused to register the petitioners as members, and that exercise of such power by the Board of Directors of M/s. Worldwide Agencies is bona fide and in the interest of the company. I have my reservations about the judgment of Guwahati High Court, for what it decided, but I will not consider the matter further inasmuch as the facts of that case are different from the facts of the present case. and the judgment of the Guwahati High Court has no application to the facts of the present case.

(34) Mr. Menon then cited (Ved Prakash & Ors. v. Iron Traders Pvt. Ltd.) (2) in respect of the proposition that petitions of Section 397 can only be maintained by those persons who are registered as members in the register of members. Facts of that case were different from the facts of the- instant case. In that case the application for rectification of the register had been dismissed by the District Judge. The petitioners filed a petition under Sections 397 and 398 of the Companies Act before the High Court. The District Judge had dismissed the petition for rectification on the ground that it could not be properly decided in summary proceedings for rectification. The Hon'ble single Judge of the Punjab High Court states that petitioners had not filed a suit for declaration that their names had been illegally removed from the register of members of the company as advised by the District Judge while dismissing a petition under Section 155 of the Companies Act For rectification of register of members. In these circumstances, the petitioners not being recorded as member;. of the company in the register of members they were not entitled to present a petition under Sections 397 and 398 of the Companies Act. The learned single Judge was of the view that the petitioners had to establish their rights as members, in a suit. No suit to establish their rights as members was filed by the petitioners, "who are now seeking the same relief under the guise of an application under Sections 497 and 398 of the Act". In these circumstances the petition filed under Sections 397/398 was held not to be maintainable. The observations of the learned single Judge regarding the non- maintainability of petition under Sections 397 and 398 have to be considered in the light of facts and circumstances of that case. In that case the petitioner had not done what a judgment of Court had required them to do.

(35) Thus 1960 Punjab 427 (supra) is not an authority for the proposition of law that heirs' to whom share-, have been transmitted by intestate succession cannot maintain a petition. under sections 397/398. Further the judgment in Ved Prakash & Ors. (supra) is not applicable to the facts and circumstances of this case, as the instant case is not one in which the names of the petitioners were at one time incorporated on the register of members. and later on removed from the register of the members. This case docs not help to respondent No. 2.

(36) Mr. Menon then referred to (1985) 58 Company Cases 563 (Balkrishan Gupta & 0rs. v. Swadeshi Polytex and others (3) of the Supreme Court. That case related to the rights which were sought to be exercised by a Recc.iver appointed under order 40 of the Code of Civil Procedure. In that context, the Supreme Court, held that such a Receiver was not a member. as he was not on the register of the members, and could not exercise, any rights as such member. The Supreme Court was not dealing with the case under Sections 397 and 398 of the Companies Act, which was still stated to be pending in the Allahabad High Court. The Court in that case was concerned with a case in which a meeting had been requisitioned. The appeal before the Supreme Court was by Special Leave against an order of the Allahabad High Court, which had dismissed the Special appeal before it, questioning the right of the requisitionists to issue notice under Section 169 of the Act., to; call an extraordinary General Meeting.. The said case having no parallel with the instant case. cannot the an authority for the provision that the petition under Section 397 was not maintainable. In fact. such a question was not for consideration before the Supreme Court. A receiver docs not to in mind have the same status in law as an heir. Succession of an their to property of left upon intestacy is automatic. Property vests in the heir according with law, whereas a receiver's obligations and duties are only in accordance with the order that results in his appointment. This Supreme Court judgment, is therefore, 0f' no assistance to respondent No. 2.

(37) Mr. Menon also refers to (1974) 44 Company Cases 552 [Jawahar Singh Bikram Singh .'Pvt. Ltd. v. Smt, Sharda Talwar) (4)]. In that case, one Sri Kishan Talwar had instituted proceedings under Sections 397 and 398 of the Companies- Act. In that petition, the wife of the petitioner Sri Kishan Talwar, Smt, Sharda Talwar was shown as a consenting party to the presentation of the petition. She was also indicated as a proforma respondent during the pendency of the proceedings Sri Kishan Talwar the original petitioner died. After the death of the petitioner, she moved the Court to be transposed as a petitioner. No application was made by the heirs or legl. representatives of the deceased petitioner to he joined as parties. although Sharda Talwar was an heir and legal representative. Opposition to transposition of Sharda Talwar was rejected by the single Judge of the High Court. In appeal, it was contended that the petition under Section 397 had abated on the death of the petitioner, and that these proceedings could not be revived by transposing Sharda Talwar. It was held by the Division Bench, that Sharda Talwar who was constructively petitioner to the original petition, and was entitled to continue the petition and that the petition under Section 397 could be continued by transposing, the wife of the deceased petitioner, wild was already on record as a proforma respondent, as of petitioner.

(38) The facts of the said ease are, therefore. different from the instant case. and the observations regarding the legal representatives wanting to continue the proceedings, would, therefrore. be. obiter, the Division Bench observations relief upon by Mr. Menon are : "THIS will not of cause debar the legal representatives from themselves wanting to continue the proceedings as heirs of the deceased petitioner provided they also fulfill the requirements- of being members of the company."

(39) It is to he noted that the Division Bench nowhere said that the legal representatives could not continue the prossedings. if they so minded, or could not maintain the petitioner The question whether the legal representatives could continue the proceedings or not, was not really before this Court in the said case. That case therefore, does not help respondent No. 2.

(40) In any case, the said case will not apply to the instant case as the question which was decided in that case related to transposition of one of the parties to a petition under Sections 397 and 398 and not the one in issue in the instant. case. namely, whether the heirs of the deceased S. K. Desor, who nave virtually the controlling interest in M/s. Worldwide Agencies, who had not been refused transmission by the Board of Directors of the company, could maintain a petition under Section 397 of the Companies Act. 1956.

(41) Mr. Menon next relied upon (1937) 2 All. E.R. 466. This is a judgment dated the March. 1937. and even pre-dates the provision of Section 210 of the English Companies Act, (which was precursor of Sections 397 and 398 of the Indian Companies Act.) The said English case related to refusal of the Directors to transfer shares. It was asserted by the petitioners that the director had constantly refuse to give or assign any reason for refusal to transfer shares. The Court held that the persons who had suffered a refusal of the Directors, end not permitted to be recorded as members of the Company. could not maintain a petition for winding up of the company. As the case related to winding up of the company, it has no application to a petition under Section 397 of the Companies Act, which relates to relief in cases of oppression. The cited case, therefore, does not help respondent No. 2. In any case it is worthy of note that a Division Bench of this Court, on a construction of Section 439 of the Indian Companies Act, has taken a contrary view in (1988) 63 Company Cases 184 (Bhaskar Stoneware Pipes Private Ltd. and others v. Rajinder Nath Bhaskar & anor.) (5).

(42) The next case cited by Mr. Menon is (State of Kerala v. West Coast Planters' Agencies Ltd.. Cochin (6). This was a criminal case. The observations made therein have no application to the facts and circumstances of the instant case. (S. Viswanathan and another v. East India Distilleries and Sugar Factories Ltd. and another) (7), cited by Mr. Menon, only explains the legal meaning of a "share". That is not the matter before me. The matter before me is whether the petitioners can in the facts and circumstances of the instant case, maintain the petition under Sections 397 and 398 of the Act.

(43) Mr. Menon then cited (1972) Company cases 350 (M. G. Amrithalingam v. Gudiyatham Textiles Pvt. Ltd. and others (8). This is a case in which the directors of the company had refused to register the heir of the deceased member as a member of the company. Being a case of refusal of the Board of Directors. what is stated in that case is of no application to the case before me. As stated above, in the instant case, the Board of Directors of the Company M/s. Worldwide Agencies, have not refused to transmit the shares in the name of the petitioners. As such the said case is inapplicable to the facts of the case before ace and is of no help to respondent No. 2

(44) Mr. Menon next referred to (1965) 35 Company Cases 351 (Shanti Prashad Jain v, Kalinga Tubes Ltd.) (9). Mr. Menon wishes to rely upon the observations of the Supreme Court which explained the nature of jurisdiction of court on a petition under Sections 397 and 398 of the Companies Act. The observations of the Supreme Court "it (Section 397) gives a right to members of a company who comply with the conditions of Section 399 to apply to the court for relief under Section 402 of the Act, or such other reliefs as may be suitable in the circumstances of the case, if the affairs of a company are being conducted in a manner oppressive to any member or members including any one or more of those applying". The Supreme Court never said in this case that only members can apply under Section 397, in any case, I am not inclined to add word "only" to what has been said by the Supreme Court. The Supreme Court was not in that case dealing with the question whether heirs of a deceased members who had died intestate can apply to the Court under Section 397 of the Companies Act or not. and as such the observations of the Supreme Court do not help the respondent In the present case what is required to be determined is whether the heirs of the deceased member, who have not been refused transmission of the shares by the Board of Directors, whether they can apply under Sections 397, 398 and Section 433 the Companies Act is not maintainable, and in support of his proposition, referred to (1987) 62 Company Cases 717 (Kilpest Private Ltd.. v. Shekhar Mehra) (10), a judgment of a Division Bench of the Madhya Pradesh High Court. Mr. Menon relying upon observations of the said Court, contended that a composite petition is not maintainable under Sections 397. 398 and 433 of the Companies Act. However, a contrary view has been expressed by a Division Bench of this Court, which is reported as (1988) 63 Company Cases 184 (supra). In that case, the Division Bench was considering an appeal against an order passed by a single Judge, whereby the learned single Judge had admitted a petition under Sections 397, 398 and 433 of the Companies Act for hearing. The Division Bench of the High Court rejected the appeal. The plea raised in the said appeal was that the petitioner could not maintain a petition for winding up of the company as they were not members of the company The Division Bench of this Court after considering the remaining of the word "contributory". held that this petition for winding up could be in,mained by heirs of the deceased member /contributory. I am bound by the said judgment. Tn any case, I am in respectful .agreement with the view expressed by the Division Bench inasmuch as the provisions of Section 397 itself requires that the Company Court is to provide relief in certain cases against oppression when circumstances exist that would make just and equitable to wind up the company.

(45) It is well settled by authority that as preliminary to grant of a petition under Section 397 of the Act, the Court should come to the conclusion that otherwise a case is one where it is Just and equitable that the company be wound up. A com- pany can be would up on the grounds mentioned in section 433. One of the grounds mentioned in Section 433 that the just and equitable to wind up the company. This being the position., I see no substance in the contention of Mr. Menon that the. petition which is filed under Sections 397, 398 and 433 of the Companies Act, is not maintainable.In fact, the Division Bench of this Court held in (1988) 63 Company Cases 717 that :-- "SECTION 397 requires two conditions to be fulfilled before an order is passed under that section : is there must be acts of oppression and mismanagement, and (ii) the affairs of the company must be such that it is just and equitable to wind up the company".

As such the contention of Mr. Menon has no force, and I reject the same.

(46) It is also to be; noted that in reply affidavit while was filed by respondent No. 2, if was- nowhere contended by her, that being a composite petition under Sections 397 and 393. She instant petition is not maintainable on that account. I. therefore. do not need to say any more that what has been stated above.

(47) MR.Vinod Bhagat appearing for the petitioners, in reply to the contentions that have been raised by Mr. Menon, contends that the instant petition is maintainable by the petitioners. He referred to the text books interalia, Buckley on the Companies Act, Fourteenth Edition, Volume 1, page 491. where it is stated "for the purpose of a petition under this Section 210 of the English Companies Act), "member" includes the personal representative of the deceased member". Buckley refers to Re Jerniyan Street Turkish Baths Ltd.. (1970) 3 All Er 57--(197! ) I Weekly Law Report 1194, 1205, $(11)$ in support of these observations. Buckley adds a Pote that "without affective this point, the said judgment of the single Judge was reversed in (97) 1 Weekly Law Report 1042$ (12)$ by the Court of Appeals".

(48) GORE-BROWNE on Companies, 42nd Edition at page 798, referred to by Mr. Bhagat, states that, "it has recently been settled that the personal representatives of a deceased member, even though they are not registered as members, are entitled to present a petition under Section 210. In Re Jermyn St. Turkish Baths Ltd,. Pennvcuick. J. held that, "on its true construction Section 210 required that the word "member" should include the personal representatives of a deceased member, on whom title to his shares devolved by operation of law".

(49) Mr. Bhagat has referred to (1970 3 All Er 57 (13) Re Jermyn Street Turkish Baths Ltd., decided by Peiinycuick, J. relied upon the judgment Bayswater Trading Co. Ltd., (1970) 1 All Er 608, (14) and held that, "it seems to me that personal representative of the deceased member must be regarded as member of a company for the purpose of section 210. I was refereed on this point to the decision of Buckley, J. in Re Bayswater Trading Co. Ltd., in which the learned Judge held that for the include representatives of a deceased member. It seems to me that section 210 requires that a similar meaning should be put on a member in that section". Justice Pennycuick therefore, rejected the contention of the respondents before him, have no locus standi to present the petition under section 210.

(50) Mr. Bhagat also relies upon Halsbury's Laws of England. Fourth Edition, Volume 7, page 1010 in support of his contention that legal heirs or personal representatives are members. In the said Volume of Halsbury's Law's of England, it is stated in a foot note that, "Member" in this context includes the personal representatives of a deceased member. Re Jerymn Street Turkish Baths Ltd. (1970) 3 All Er 57 ......................; reversed without affecting this point (1970) 3 All Er 184(15).

(51) A perusal of the judgment of the Court of Appeal against the order of Justice Pennycuick shows that the Court of Appeal did not express itself against what was stated by Justice Pennycuick.

(52) Besides referring to (1970) 3 All Er page 57, Mr. Vinod Bhagat also referred to the provisions of Section 273 of the Indian Succession Act. Mr. Bhagat says that by virtue of the fact, that S. K. Desor had died intestate and a succession certificate has been obtained by the petitioner Mrs. Margaret Desor, from a Competent Court, with respect to the shares held by S. K. Desor, she has to be treated as a member, as the Board. of Directors of the company have not refused to register her as a member. He says that by virtue of the provisions of Section 273 of the Indian Succession Act the succession certificate so obtained, is conclusive, and as such cannot be questioned by any person in any other proceedings, I agree.

(53) Besides this, Mr. Bhagat relies upon the fact that in the instant case no plea has been taken by respondent No. 2 that the Board of Directors of M/s Worldwide Agencies has refused to register the share in the name of the petitioners. What the Board of Directors required, was to obtain a succession certificate which the petitioners has and also to obtain permission of the Reserve Bank of India to hold the shares that were held 'by S. K. Desor.

(54) It is not in dispute that .after the filling of the petition, the petitioners have obtained the permission of the Reserve Bank of India to hold the share which had been held by S. K. Desor. This according to M/r. Bhagat is conclusive in observations of the Supreme Court in , (Life Insurance Corporation of India v. Escorts Ltd. and others) (16) whereas it was held that once the permission to hold shares is given by the Reserve Bank of India before or after filing of the petition, it is not open to any person to question that Permission.. As permission of the Reserve Bank of India has been obtained in this case. the observations of the Supreme Court in are clearly applicable, and it is not open to respondent No. 2 to question the grant of that permission to the petitioners vis-a-vis the shares of M/s. Worldwise Agencies, held by S. K. Desor, deceased.

(55) Mr. Bhagat also says that although the objection regarding the non-maintainability of a composite petition have not been taken by respondent No. 2 in the reply affidavit, such a contention is not available to respondent No. 2, as division Bench of this Court has already expressed a contrary view in (1988) 63 Company Case? 18l at page 205. As stated above, this judgment binds me, and as such I have io hold that this contention of Mr. Menon has no force.

(56) Mr. Bhagat also Points out that in (1977) 47 Company Cases 151 (Gulabrai Kalidas Naik and Others v. Laxmidas Lallubhai Patel & others (17), it has been said that in a given case. the petitioners invoking court's jurisdiction under Sections 397 and 398 are in a position to show that even though their names are not to be found in the register of members of the company. yet it they have such an indisputable and unchallengeable title to the membership of the company that court may entertain a petition at their instance".

(57) In the instant case. the petitioners are the wife and the children of S. K. Desor. They have obtained letters of administration under Section 273 of the Indian Succession Act which is conclusive. They have also obtained permission of the Reserve Bank of India to hold the shares which were held by S.K. Desor. Thus, in view of the judgment of the Supreme Court in 1986 Supreme Court 1370, they have perfected their title to the shares which were held by S.K. Desor, and keeping in view what has been sated in Buckley, 14th Edn., Halsbury's Laws of England, 4th Edn., Gore-Browne on Companies, 1972 Eds.; I am of the view that it would be consistent with the opinion and authority to treat such persons as the petitioners as members for the purposes of maintainability of a petition under Sections 397, 398 of the Act.

(58) There is another aspect that may be mentioned, Section 210 of the English Companies Act. which preceded Section 397 of the Act, has now been replaced by Section 75 of the English Companies Act, 1980. Section 75(9) of the English Companies Act, 1980, provides that the section shall apply to a person who is not a member, but to whom shares have been transferred or transmitted by operation of law, and the references to a member shall be construed accordingly.

(59) In the facts and circumstances of the instant case, by virtue of the letter of administration, keeping in view the shareholdings \ of S. K. Desor as evidenced by form 32 which has been filed by respondent No. 2. as made up to 25-2-1984, S. K. Desor had 600 shares, (out of the total share capital, issued and paid-up of 2010) are held between the petitioners. They have an undisputed right to hold 600 shares of the Company out of total of 2010 shares. This is considerably more than the 1110th of the shareholdings which is required to be held by the persons presenting a petition under Section 397 of the Act. by Section 399 of the Act. These 600 shares make these petitioners the largest shareholder.

(60) Not to permit an enquiry into the assertions which hive been made in this petition for oppression, which have been briefly adverted to in the earlier part of this order, could he very gross from of oppression itself, and in my view, respondent No. 2 cannot be permitted to do that.

(61) For the reasons, aforesaid, I reject the preliminary objection of respondent No. 2 that this petition is not maintainable.

(62) The petition has already been admitted to hearing. I direct the parties should lead oral evidence in Court in support of their respective contentions. The petitioners shall lead their evidence first.

(63) Case to come up for the recording evidence of the petitioners, on.