Law: Companies Ordinance, 1984

Section: 290,86,156,158,205:,252

Companies Ordinance (XLVII of 1984)--Ss. 290, 86, 156, 158, 205: & 252 Minority oppression and mismanagement of affairs of Company Petition for regulating the affairs of Company Petitioners owning 42.32% shares prayed that either affairs of Company be regulated or in the alternative, respondents be directed to purchase their shares, because ever since purchase of shares by them, they were neither allowed to participate in management nor were inducted on Board of Directors Respondents contended that shares of petitioners were void having been issued in violation of provision of S.85 of the Ordinance and that no consideration for shares had been paid Petitioners, according to Corporate Law Authority owned 2000 shares out of total 20,000 shares of Rs.100 each; and that Company had not filed Form A and Form 29 in terms of Ss. 156, 158, 205 & 252 of the Ordinance Copies of share certificates produced by petitioners were bearing the signatures of Chief Executive or the Directors Company had not denied issuance of such certificates Plea of non payment of consideration was raised only in defence of application under S.290 of the Ordinance filed in April, 1992 In spite of taking such plea in year 1994, no proceedings had been taken or filed for recovery of consideration of share certificates already issued to petitioners Registrar of Companies certified to have received intimation in Form 111 duly signed by Chief Executive with regard to issuance of 2000 shares Respondents challenged the genuineness of such Form being forged or not so signed Such shifting stands of respondents speaks volumes about their conduct and it seemed that they were trying to run away from their liability Long silence of four years on the part of respondents was a factor helping to believe that share certificates had been issued to petitioners and consideration thereof had been paid by them at relevant time No existing shareholder had come forward to object to issuance of share capital to petitioners Due to such manifest distrust, it would be neither just nor proper to thrust the petitioners on unwilling respondents in circumstances While granting alternative relief, High Court directed…

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