BEFORE THE COMPANY LAW BOARD
SOUTHERN REGION BENCH
COMPANY PETITION NO.387/113(3)/ SRB/2001
PRESENT : SHRI K.K. BALU, Member
IN THE MATTER OF THE COMPANIES ACT, 1956 ( I OF 1956 )
IN THE MATTER OF M/S SATYAM COMPUTER SERVICES LIMITED
Smt. Susheela Ostwal.
Present on behalf of parties :
1. Shri. Prassan Chand Ostwal, Chartered Accountant for Petitioner
2. Shri. S.Ravi,Advocate for Respondent.
O R D E R
1. This is a petition filed under section 113(3) of the Companies Act 1956 (the Act) seeking directions of this Bench against M/s. Satyam Computer Services Limited (the Company) to issue 100 Bonus shares of Rs.10/- each or equivalent 500 shares of Rs.2/- each; pay damages of Rs.6,55,000 together with interest at 18% Per annum from 01.10.1999 till date of payment and permit the petitioner to initiate criminal proceedings under section 113(2) of the Act.
2. The facts in brief, as reiterated by Mr. Prassan Chand Ostwal, Authorised Representative of the petitioner are that the petitioner is holder of 100 shares of Rs.10/- each of the Company since 01.09.1999, comprised in Certificate No. 122633. Though the Company had announced bonus shares, it had not issued 100 bonus shares of Rs.10/-each due to the petitioner. Mr. Ostwal pointed out that one Mr. K.Chandrasekar had filed a Civil suit in OS. No. 2875 of 1999 on 23.04.1999 before the XII City Civil Court, Chennai for mandatory injunction directing the Company, interalia, to issue bonus share certificates in respect of the shares covered under share certificate No. 122633. The suit was dismissed on 11.10.2000, upon which, Mr. K.Chandrasekar preferred an appeal in CRP No 590/2001 before the High Court of Madras against the said order dated 11.10.2000. The High Court dismissed the appeal preferred by Mr. K.Chandrasekar. In this connection, Shri. Ostwal has referred to the order of the City Civil Court and the correspondence exchanged among the parties. In view of dismissal of the appeal by the High Court of Madras, Shri. Ostwal prayed for directions against the Company to issue 100 bonus shares in favour of petitioner.
3. Shri. S.Ravi, Counsel for appearing the Company, while reiterating the averments made in counter statement, has urged that Mr. K.Chandrasekar, who had filed the civil suit as well as the appeal before the High Court, claiming to be the purchaser of the original 100 shares covered under share certificate No 122633, is a necessary party to the present proceedings. He further pointed out that the Company was constrained not to issue 100 bonus shares in favour of the petitioner, in view of pendency of the proceedings before the civil court as well as the High Court of Madras in respect of the original 100 shares. However Shri. Ravi categorically submitted that the High Court has since dismissed the appeal filed by Mr. K.Chandrasekar, the Company will obey the order of the Company Law Board in regard to the issue of the bonus shares.
4. I have considered the pleadings and submissions made on behalf of the petitioner as well as the Company.
5. The facts not in dispute are that 100 shares of Rs.10/-each covered under share certificate No 122633 held in the name of the petitioner was the subject matter of the suit in OS No 2875 of 1999 before the XII City Civil Court at Chennai, filed by Shri. K.Chandrasekar. The suit is, interalia, for mandatory injunction directing the Company to issue bonus shares certificate in respect of the shares covered under share certificate No 122633. The Petitioner and the Company are parties to the suit. The suit was dismissed on 11.10.2000. The plaintiff in OS. No 2875 of 1999 (ie) Shri.K. Chandrasekar preferred an appeal against the said order dated 11.10.2000, before the High Court of Madras. It is confirmed both by the Authorised Representative of the petitioner and Counsel for the Company that the appeal preferred by Shri. Chandrasekar in CRP No 590 of 2000 stands dismissed. In this connection the letter dated 22.02.2001 of Sampath Kumar & Associates (Annexure A-9) Advocates for Shri. K.Chandrasekar addressed to the Company assumes importance, the relevant portion of which reads as under :-
Please appreciate that the matter is subjudice. The appeal is likely to be posted in High Court within 3 or 4 days. There is no urgency for transferring the shares in favour of anyone.
Mrs. Susheela Ostwal has no right to demand anything from you till the matter is disposed of in High Court. If you act according to her instructions, you will be facing risk. You are on the wrong presumption that nothing remains with regard to the subject shares. You will be getting suitable directions from the High Court. Till such time you are requested to maintain status Quo.
6. Considering the facts and circumstances of the case; submissions made on behalf of the parties and in view of the dismissal of appeal in CRP. NO. 590/2001 on the file of High Court of Judicature at Chennai and on the strength of among other things, Annexure A-9, it is here by ordered that the Company shall issue 100 bonus shares of each Rs.10/- or equivalent 500 shares of each Rs.2/- with in 30 days of receipt of this order in favour of the petitioner. The claim for damages has neither been argued by the Authorised Representative of the petitioner nor is justified in view of the proceedings before the Civil Court as well as High Court of Madras in regard to the original 100 shares covered under share certificate No 112633. There is no order as to cost.
With above directions the petition stands disposed off.
( K.K. BALU )
DATED THIS THE DAY OF DECEMBER, 2001