Kulveer Chandhoke vs Eastern Linkers (P) Ltd. (In ...
1995 Latest Caselaw 791 Del

JUDGMENT

Dalveer Bhandari, J.

(1) A company application No. 501/86 in Company Petition No. 42/85, 'Eastern Linkers Private Limited' Company in liquidation has been filed. Kulveer Chandhoke is the applicant and the Official Liquidator is the respondent. Kulveer Chandhoke is respondent No. 6 in Cp 42/85. In this application it is submitted by the applicant that he is the owner of four-fully paid up preference shares of the face value of Rs.2,000 each of M/s Eastern Linkers Pvt. Limited (In liquidation) bearing No. 29 to 32.

(2) According to the applicant, the shares were allotted to him on 1.11.1951 and share scrips are in his possession and he has filed the photo copies of the same. He has further mentioned that he has not transferred the shares to any one and these shares are continued to be his property.

(3) It is submitted in the application that in May, 1960 two individual shareholders namely D.N. Sodhi and S.L. Bali developed personal differences and their personal differences led to filing of winding up petition No. 39/73 by D.N. Sodhi. The Court after hearing the parties ordered that the company be wound up under the 'just an equitable' clause. Against that order an appeal was preferred before the Division Bench and the same was dismissed with a reasoned judgment. A Special Leave Petition was preferred in the Supreme Court of India against the Judgment of the Division Bench which was also dismissed on 5.3.1984.

(4) It is submitted by the applicant that he was not a party to any of these proceedings and consequently not bound by the orders passed by different courts.

(5) The applicant also mentioned that he was approached by Dr. P.S. Chhabra as well as his cousin Jaidev Chandhoke who were interested in buying applicant's shares for a better price and the applicant is equally keen to sell his shares.

HE further submitted that since the winding up proceedings are pending and, the transfer of shares is not possible because they cannot be registered except with the permission of the Court. Therefore, he is seeking permission of the Court for the grant of permission to sell his- fully paid up shares to Jaidev Chandhoke. He further submitted that the sale of shares by him to Jaidev Chandhoke will not in any way create any impediment in the winding up of the company. The applicant has also prayed that the Official Liquidator be directed to register the shares transfered on behalf of the company. The Court issued notice on the application and a reply has been filed on behalf of respondent No. 2 to 4, 7 and 8.

(6) In the reply the non-applicants have submitted that the true position is that the applicant Kulveer Chandhoke was aware of all these proceedings and he in fact was a party in Company Petition No. 39/73.

(7) This Court in its order dated 2.2.1978 in C.P. 39/73 directed the counsel for the petitioner to file a list and Form No. 10 giving a list of persons supporting or opposing the winding up petition. This order was passed after the citation was published in the newspapers.

(8) On 27.1.1978 Kulveer Chandhoke wrote to the counsel for the petitioner in C.P. 39/73 as he intended to oppose the winding up petition and he was the holder of the four commutative preferential shares of the Company.

(9) Form No. 10 was filed in Court on 13-3-1978 in which Kulveer Chandhoke also appeared in the list of persons opposing the winding up petition. The respondent has annexed Form No.10 along with his reply. Form No. 10 indicates the name of Kulveer Chandhoke, F-68, Bhagat Singh Market, in the category of persons who had joined in the category of people opposing the winding up petition.

(10) It is also submitted that reply to C.P. 39/73 was filed on 12.4.1978 on behalf of the petitioner including the present applicant, Kulveer Chandhoke. P.N. Khanna, J. in his Judgment dated 23.5.1972 in C.P. 32/75 had decided the ownership of the shares. This judgment was upheld by the Division Bench of this Court and by the Supreme Court in a special leave petition.

(11) It is submitted that winding up order passed by Ranganathan, J. on 9.12.1993 had also fully dealt with the ownership aspect of the shares. The appeal against the said judgment was dismissed by the Division Bench of this Court and a special leave petition was also dismissed by the Supreme Court. Therefore, ownerships of the shares has been determined on two occasions and even received seal of approval by the Apex Court and cannot be reopened in these proceedings.

(12) In the reply it is stated that the register of shares by S.L. Bali in C.A. 38/73 was not found to be geniune.

(13) P.N. Khanna, J. in his judgment observed that the share register produced by Mr.Bali was not to be relied upon. Similarly Ranganathan, J. in Cp 39/73 dated 30.4.75 mentioned that Khanna, J. observed in his Judgment that the register cannot be relied upon.

(14) The Division Bench in its order dated 18.3.1977 has held that: "AS against the aforesaid annual returns, the Register of Members, Exhibit R.W. 1/1 was produced by Shri Bali and it was contended by his counsel on his behalf that the said Register shows that the two sons and daughter of Shri D.N. Sodhi were not members of the Company, but on the other hand shows that the shares standing in the name of Shri Des Raj and Shri Mulk Raj were transferred to the name of Shri Bali. The register has a heading on the front page which refers to the Register as the one required under the Indian Companies Act of 1956. The register, however, contains entries commencing from 1949. That means that the register that has been produced and marked as R.W. 1/1 is not the original register and there must have been another register regularly kept from 1949, which has not, however, been produced. further, as pointed out by Khanna, J. in the impugned order, the register was throughout in the custody of Shri Bali, and therefore, loses its probative value in the face of the annual returns which were duly signed and filed with the Registrar, by Shri Bali himself. The annual returns which were duly filed with the Registrar in the relevant years and which remained in the custody of the Registrar have to be given greater credence than the alleged register of members which was throughout in the custody of Shri Bali himself."

(15) Similarly Ranganathan, J. in C.P 39/73 observed that having regard to the annual return Public Witness 1/1-6 and for other reasons discussed above a share register RW/1/1 produced by the company is totally unreliable. There is therefore, no doubt that the register produced now is not a true share register of the company which was in existence at the relevant time.

(16) It is also submitted that annual return for the year 61-66 show that Chandhoke was not a shareholder of the company.

(17) The respondent in his reply has also mentioned that Kulveer Chandhoke has tried to over reach the Court by representing himself as K.Chandhoke, who was the original allottee of the co-shares which were ultimately transferred to Savita Bali Respondent No. 5 in C.P. 42/85. The respondent had mentioned that the shares were originally allotted to Kulveer Chandhoke on 1.11.59 when he was admittedly a minor. The shares were later on transferred to respondent No. 5 herein and were duly registered in his name, as would be clear from annual return for the years 1961-66. The possession of shares with Kulveer Chandhoke is of no consequence in as much as the said scrips were left with the registered office of the 'Eastern Linkers Pvt. Limited' when respondent No. 2 was ousted from the office. As a matter of fact Kulveer Chandhoke is guilty of forgery and is liable to be proceeded for the contempt of this Court, as he tried to over reach this Court by filing a false affidavit and a statement.

(18) In the reply it is also mentioned that the company was wound up in 1979 and is under the charge and control of the Official Liquidator. He also mentioned that the question of winding up of the Company has been finally decided up to the Supreme Court and the question of revival does not arise. It is also mentioned that question of applicant Kulveer Chandhoke selling some shares does not arise simply because he did not own any shares in the company in liquidation.

(19) In view of what is stated in the Form 10 the applicant is guilty of suppressing the material facts and only on the ground of suppression of material facts and not approaching the Court with clean hands his application deserves to be dismissed with costs.

(20) Mr. Chetan Sharma, learned counsel for the applicant while repudiating the submissions asserted that the non applicants are neither shareholders nor members of the company. Therefore, they have no locus standi to oppose this application.

(21) Mr. Sharma also submitted that there have been no proceedings between the applicant and the non applicant and consequently there is no judicial order against or in favor of the applicant. Therefore, the judgments relied by Mr. Parekh have no relevance in deciding this application.

(22) Mr. A.N. Parekh, learned counsel appearing for the respondent vehemently submitted that this application is a total abuse of the process. The matter has been decided up to the Supreme Court and cannot be re-opened. Mr. Parekh also submitted that the petition is barred by the principles of res judicata.

(23) Mr. Parekh further submitted that in this case initially the Company Petition was decided by Khanna, J. vide his order dated 23.5.1972. The company appeal against that order was dismissed by the Division Bench. A special leave petition to the Supreme Court against the judgment of the division bench was also dismissed. Thereafter Ranganathan, J. allowed the winding up petition on 19.12.1979. The company appeal against the said judgment was dismissed by a reasoned order (reported in 1948 Company Cases, 462). The review applications were also dismissed. A special leave petition was also dismissed by the Supreme Court against the decision of the Division Bench. The petitioner having participated in some of these proceedings cannot now be permitted to reopen the issue which has been finally determined even by the apex Court.

(24) I have heard the learned counsel for the parties at length and perused the various judgments passed in these proceedings from time to time. The judgment of Khanna, J. in company petition was upheld by the Division Bench and also by the Supreme Court in which it was held that Sodhi Group had 21 co shares to which claim is made by Chandhoke.

(25) Ranganathan, J. independently examined the issue of the ownership of the alleged shareholding of the applicant. The Division Bench of this Court upheld the judgment of Ranganathan, J. Even the special leave petition against the said judgment was dismissed.

(26) Both Khanna, J. and Ranganathan, J. have dealt with the issue of applicant's shareholding and both these judgments have received seal of approval by the Supreme Court.

(27) The controversy involved in this application has been finally decided and determined and cannot be reopened.

(28) The unhealthy practice and growing tendency of unnecessary prolonging court proceedings, particularly, by those litigants who can afford to finance the litigation must be discouraged. Such litigants do not want to accept the judgments and orders even of the Apex Court in its true spirits. The Courts must effectively curb this tendency and practice.

(29) The application being totally devoid of any merit is accordingly dismissed with costs.