Dismissed

P.S.Kurian v. M/S Vysakh International Hotels Pvt. Ltd.

Kerala HC3 Mar 2020Co.Appeal/17/2012

Case brief

AI extract

What is this about?

This corporate appeal challenged a Company Law Board order dismissing a petition under Sections 397 and 398 of the Companies Act, 1956, on the ground that appellants were no longer shareholders. The High Court dismissed the appeal, holding that no specific question of law was raised or argued as required by Section 10F and no legally identifiable error existed.

What did the court decide?

The company appeal was dismissed as the High Court found no question of law raised under Section 10F and no palpably wrong findings of fact to interfere with.

P.S.Kurian Vs M/S Vysakh International Hotels Pvt. Ltd. — Company and Corporate | Kerala HC (2020)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT

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THE HONOURABLE MR.JUSTICE C.T.RAVIKUMAR

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THE HONOURABLE MR.JUSTICE N.NAGARESH

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TUESDAY, THE 03RD DAY OF MARCH 2020 / 13TH PHALGUNA, 1941

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Co.Appeal.No.17 OF 2012

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AGAINST THE ORDER IN CP 89/2010 DATED 24-08-2011

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APPELLANTS:

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1 P.S.KURIAN

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4/822 PULIKAPANATTU HOUSE, KOOTTUMUGHAM P.O. KANNUR DISTRICT, KERALA.

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2 P.C.JOSE, 5/666, PATHIYIL HOUSE, PADIMURUTHU P.O. ANANDASHRAM VIA KASARAGOD DISTRICT.

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3 KURIAN THOMAS ELLIKKAL HOUSE CHITTADI P.O. ALAKODE, KANNUR DISTRICT.

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4 N.K.MATHAL, S/O.LATE KURIAN NANTHIKATTU HOUSE, PAYYANNUR P.O. SREEKANDAPURAM, KANNUR DISTRICT.

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BY ADVS.

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SRI.K.M.ANEESH SRI.ADARSH KUMAR

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RESPONDENTS:

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1 M/S VYSAKH INTERNATIONAL HOTELS PVT. LTD. HAVING ITS REGISTERED OFFICE AT WARD NO. 21, DOOR NO.116-C, GOVERNMENT HOSPITAL ROAD, PAYYANNUR, KANNUR 670307.

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2 MATHEW JOSEPH, MULLAKKARAYIL HOUSE ELAMDESOM POST, IDUKKI DISTRICT 685 588.

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3 THOMAS M.JOSEPH 32/800A, ELAVANAKAL ROAD, PALARIVATTOM POST, COCHIN, KERALA 682 025.

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Co. Appeal No.17 OF 2012

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4 E.JOSE, PMC XV/482-A ELLICKAL HOUSE, MOORIKOVVAL PAYYANNUR POST KERALA 670 307.

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5 ELASAMMA JOSE PMC XV 482-A, ELLICKAL HOUSE, MOORIKKOVVAL, PAYYANNUR POST 670 307.

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6 K.T.MATHEW, S/O.THOMAS KATTIVEETTIL HOUSE, POST IRITTY, KANNUR.

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7 LEELAMMA MATHEW, W/O.K.T.MATHEW KATTIVEETTIL HOUSE, POST IRITTY KANNUR DISTRICT.

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8 NISHAD MATHEW, S/O.K.T.MATHEW KATTIVEETTIL HOUSE, POST IRITTY, KANNUR.

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9 NIDHIMON MATHEW S/O.K.T.MATHEW, KATTIVEETTIL HOUSE, POST IRITTY, KANNUR DISTRICT.

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R6-9 BY ADV. SRI.M.G.KARTHIKEYAN R6-9 BY ADV. SRI.NIREESH MATHEW R2-3 BY ADV. SRI.K.T.POULOSE (KORATTY) R2-3 BY ADV. SRI.RAJU JOSEPH (SR.)

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THIS COMPANY APPEAL HAVING BEEN FINALLY HEARD ON 03-03-2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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Co. Appeal No.17 OF 2012

J U D G M E N T

~ ~ ~ ~ ~ ~ ~ ~ ~

Dated this the 3^rd day of March, 2020

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Ravikumar, J.

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This appeal is filed under Section 10F of the Companies Act against the order dated 24.08.2011 in C.P. No.89/2010 by the Company Law Board, Chennai Bench.

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The appellants filed CP No.89/2010 before the Company Law Board, Chennai as a composite petition seeking reliefs under Sections 397 and 398 coupled with Sections 155 and 237 of the Companies Act, 1956. They raised allegations of illegal/fraudulent transfer of appellants' shares, illegal/fraudulent removal of appellants and

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Co. Appeal No.17 OF 2012

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respondents 4 and 5 from the directorship of the Company, viz. M/s.Vysakh Internation Hotels Pvt. Ltd., and also illegal/fraudulent appointment of respondents 2 and 3 as its Directors. Additionally, they sought for a consequential relief of rectification of shares under Section 111(4) of the Companies Act and investigation into the affairs of the company under Section 237 of the Companies Act. In CP No.89/2010, the respondents herein filed CA No.208/2010. In fact, the said CA was filed by respondents 1, 6, 7 and 9, seeking for the dismissal of CP No.89/2010 on the ground that it is not maintainable inasmuch as the petitioners therein/appellants herein do not hold any shares in the company and that they had executed share transfer deeds. The impugned order would reveal that the first petitioner in the company petition, viz. the first appellant herein, had earlier filed a writ petition before this Court as W.P.(C) No.5988/2010. The opening paragraph in the writ petition was reproduced by the Company Law Board in the impugned order as hereunder:-

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Co. Appeal No.17 OF 2012

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“The petitioner was one of the shareholders of the 5^th respondent company. The petitioner was forced to transfer the share without his knowledge.”

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Added to it, his letter dated 19.01.2010 addressed to the Excise Commissioner, Thiruvananthapuram was also taken note of by the Company Law Board. In the said letter, he wrote thus:-

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“I was one of the shareholders of the RK Company and share was forcibly transferred without my knowledge and now I have ceased to be a shareholder.”

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A perusal of the impugned order passed by the Company Law Board, more particularly paragraph 3, would reveal that based on the evidence, it arrived at the conclusion that all the petitioners had executed share transfer deeds and thereby, ceased to be shareholders of the company in question. Based on the evidence revealing the said facts, it was found that the appellants herein are not shareholders of

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Co. Appeal No.17 OF 2012

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the company and therefore, got no locus standi to maintain CP No.89/2010. In other words, the objection raised by respondents 1, 6, 7 and 9 regarding the maintainability of CP No.89/2010 on the ground that the petitioners do not hold any shares in the company and had executed transfer deeds, the Company Law Board upheld the objection raised in CA No.208/2010 and consequently, dismissed CP No.89/2010. It is against the said order that the captioned appeal under Section 10F of the Companies Act has been filed.

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Heard learned counsel appearing for the appellants and learned counsel appearing for respondents 1 and 6 to 9.

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We will firstly consider the question whether the

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appellants have made out a case for entertaining an appeal under Section 10F. In that context, it is relevant to refer to Section 10F of the Companies Act, 1956, which reads as follows:-

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Co. Appeal No.17 OF 2012

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“10F. Appeals against the order of the Company Law Board - Any person aggrieved by any decision or order of the Company Law Board made before the commencement of the Companies (Second Amendment) Act, 2002 may file an appeal to the High Court within sixty days from the date of communication of the decision or order of the Company Law Board to him on any question of law arising out of such order:

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Provided that the High Court may, if it is satisfied that the appellant was prevented by sufficient cause from filing the appeal within the said period, allow it to be filed within a further period not exceeding sixty days.”

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(Underline supplied)

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5. A bare perusal of Section 10F would reveal that

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though any person aggrieved by any decision or order of the Company Law Board could file an appeal to the High Court within a time stipulated thereunder, it should be on any question of law arising out of such order. Despite our careful scrutiny of pleadings in this appeal and also after hearing the learned counsel for the appellants, we do not find any

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Co. Appeal No.17 OF 2012

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specific question of law raised in this appeal. So also, no question was argued before us. When no question of law was expressly raised in this appeal or argued before us, we have no hesitation to hold that in the light of the specific provisions under Section 10F, that there is nothing in this appeal warranting appellate interference.

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The impugned order would reveal that based on the evidence available on record, the Company Law Board arrived at a finding on facts that the appellants herein had transferred their shares in the company and on receipt of consideration, they had also executed share transfer deeds. When there is nothing on record to reveal that the said finding of facts is palpably wrong or against the weight evidence or that it was made without any evidence at all, there is no scope for interference. In such circumstances, when based on the facts obtained from the evidence on record, the Company Law Board arrived at a conclusion that the appellants are no more shareholders in the Company and therefore, not entitled to file a petition under Section 399

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Co. Appeal No.17 OF 2012

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of the Act. The said order of the Company Law Board upholding the objection raised by the aforesaid appellants in

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CA No.208/2010 and consequently, dismissing CP No.89/2010 invites no appellate interference.

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In the said circumstances, this appeal must fail and accordingly, it is dismissed.

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Sd/- C.T. RAVIKUMAR, JUDGE

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Sd/- N. NAGARESH, JUDGE

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aks/04.03.2020

P.S.Kurian v. M/S Vysakh International Hotels Pvt. Ltd.

Case brief

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P.S.Kurian v. M/S Vysakh International Hotels Pvt. Ltd.

Case brief

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