Holder of majority shares not in control of company: SC

By Staff
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Google Oneindia News

New Delhi, Aug 28 (UNI) The Supreme Court has ruled that holding of majority shares in a company is not conclusive proof of the fact that the holder of the shares is in control of the firm.

A bench comprising Justices A K Mathur and Markandey Katju handed down the ruling while dismissing the petition of the tenant whose eviction was ordered by the Bombay High Court on the grounds of sub-letting.

Santosh Ajit Sachdeva became the tenant of the suit premises after the death of her husband Ajit Sachdeva. Ajit was running M/s Pearl Advertisings located in Colaba, Mumbai. Santosh owned 1400 of the 2000 shares in a new company named M/s Impression Advertising and Marketing located in the same premises.

The respondent, Ms Anoop Shahani, owner of the premises filed a suit for eviction on the grounds that the tenant had sublet the premises.

The apex court in its judgement noted, ''So far as this case is concerned, as per the findings of the fact recorded by the appellate court as well as by the High Court, the appellate-defendant has not been able to successfully prove that she is controlling the company.'' It was held by the appellate court that merely holding large number of shares is not sufficient, something more is required to prove she is actually controlling and managing the business herself.

''In view of concurrent findings of the courts, there is no reason for us to take a different view of the matter, hence we do not find any merit in the appeal and accordingly the appeal stands dismissed,'' the court ruled.

UNI

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