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1. Shri Bhupinder Rai and two others have filed this petition under Section 111 of the Companies Act, 1956 (hereinafter referred to as "the Act"), seeking rectification of the register of members of S. M. Kannappa Automobiles (P.) Limited. The facts as narrated by the petitioners are as follows.

2. The company is a private limited company incorporated in the year 1975, with an authorised capital of Rs. 10 lakhs and the paid-up capital of the company was Rs. 2,00,100 consisting of 2,001 shares of Rs. 100 each. Of this paid-up capital of the company, the petitioners' group held 1,000 shares. The sixth and seventh respondents' group held 1,000 shares and one share was held by Shri S. M. Kannappa who was the proprietor before the sole proprietorship was converted into a company. The one share held by Shri Kannappa was transferred to the first petitioner by the legal heirs of Shri Kannappa after his death in 1990. As the company refused to register the share in the name of petitioner No. 1, a petition under Section 155 of the Act was filed by the petitioner in the Karnataka High Court which is still pending. From the reply filed in these proceedings by the respondents, the petitioners came to know that the company had issued further 6,000 shares in the company at 3,000 shares each to respondents Nos. 6 and 7. In the present petition before us, this issue has been challenged and the petitioners have sought for removal of the names of these respondents from the register of members in respect of these 6,000 shares alleging that this allotment was made only with a view to increase the shareholding of respondents Nos. 6 and 7 so as to upset the equal holding of both the groups.

10. In regard to the issue of maintaining parity of shareholding between the two alleged groups, we are, for the following reasons, of the view that the petitioners have not been able to establish any such agreement which has binding force on the company. It is admitted in the petition itself at paragraph 6 that the petitioners and the sixth and seventh respondents are related. Originally, there were five shareholders, namely, Sarvshri M. L. Manchanda, O.P. Narang, Vijay Kumar Narang, Bhupinder Rai and S. M. Kannappa. While Shri Kannappa held only one share, all others held 500 shares each. The sixth and seventh respondents acquired their shares by transfer from their fathers, Shri M. L. Manchanda and Shri O. P. Narang, respectively. In other words, out of the five original promoters among whom the agreement of maintaining parity is alleged to have been agreed upon, only petitioners Nos. 1 and 2 are in a position to assert now on such agreement. There is nothing in the articles incorporating any such terms or any written document produced before us in this regard. Their idea of maintaining parity also falls when we look at the attempt of the petitioner to acquire one share of Shri Kannappa, the acquisition of which would definitely affect the so called parity. Another important point raised by counsel for respondents Nos. 6 and 7, Shri Harikrishnan, which impressed us was the relationship among the parties and how in such a situation any group concept would have been visualised at the time of incorporation of the company.