JUDGMENT : ANIL KUMAR CHOUDHARY, J. 1. Heard the parties. 2. Both these appeals have been preferred with the self-same prayer to set aside/ quash the order dated 20.11.2013 passed by the Company Law Board, Kolkata Bench in Company Petition No. 912 of 2012 hence, both these appeals are heard and disposed of by this common judgment. 3. The brief fact of the case is that the respondent nos.1 and 2 of both these appeals filed Company Petition No. 912 of 2012 against the original appellants of Company Appeal No. 01 of 2014 under Sections 397, 398, 399, 402 and 403 of the Companies Act, 1956. It was the case of the petitioners before the Company Law Board that the petitioner no.1 before the Company Law Board who is the respondent no.1 of these appeals is a promoter shareholder of M/s Sokhi Engineering Company Private Limited (SECO) holding 100 shares out of the total 300 shares and the petitioner no.2 before the Company Law Board who is the respondent no.2 of this appeal also held 100 shares out of the said total 300 shares as per the Annual Return of 2009-10. Both the petitioner nos.1 and 2 before the Company Law Board represent 1/10th of the total number of the shareholders as per the annual return of 2009-10 and the petitioners are entitled to 1/11th share pertaining to the shares of their deceased father which has accrued to them by operation of law thus, the petitioners are entitled to the right to apply for the relief under Section 397/398 of the Companies Act, 1956; in view of the provisions of Section 399 of the Act. It is the further case of the petitioners before the Company Law Board that the respondent nos. 2 to 4 are the Directors of the respondent company i.e. M/s Sokhi Engineering Company Private Limited and the respondent nos.2 to 4 are also the members of the family but the respondent nos. 5 to 10 are the directors of the respondent company, who were appointed as directors illegally by the respondent nos.2 to 4, even though no outsiders could be made director by company owned and controlled by a partnership firm namely M/s Pioneer Engineering Company, which is a family company. 5 to 10 are the directors of the respondent company, who were appointed as directors illegally by the respondent nos.2 to 4, even though no outsiders could be made director by company owned and controlled by a partnership firm namely M/s Pioneer Engineering Company, which is a family company. In the year 1956, the father of the petitioners and the respondent no.2 namely late Boota Singh formed a partnership firm under the name and style of M/s Pioneer Engineering Company, as a family business with all partners being the family members only. Initially the partners of the firm were late Boota Singh, his elder son Shri Gurucharan Sing and second son Shri Amolak Singh. For smooth running of the partnership firm M/s Pioneer Engineering Company (PECO) was divided into five departments and used to be managed by the four partners of the said firm. In the year 1967, Shri Rajwant Singh who was the in charge of foundry department started a new proprietorship firm under the name of style of Rajwant Industries (RI) with the help of PECO. All assets of PECO, Foundry Department were transferred to a place called Bagbera to start RI, though Shri Rajwant Singh continued as a partner of PECO as well. Subsequently, two new companies were incorporated with the help of PECO namely the respondent no.1 M/s Sokhi Engineering Company Private Limited (SECO) and M/s Pioneer Technocrats Private Limited (PTPL). Shri Amlok Singh one of the brothers and partners of PECO secured 3 acre plot of land for PTPL and registered and incorporated as company on 13.12.1973. Shri Amolak Singh became the Managing Director and his wife Mrs. Sukhwant Kaur as a director were the promoters of the company. Shri Amolak Singh continued to function as partner of PECO. The respondent company i.e. SECO was started in 1972 in a rented premises and a plot of land later on was secured on lease in the name of late father Boota Singh. While the factory building of SECO was under construction, the respondent company took portion of PECO factory building and provisionally shifted their machines to PECO. In early November, 1984 as a result of anti-Sikh riots and subsequent unrest, all the factories within the premises of PECO were closed for six and half months thereby losses were incurred. While the factory building of SECO was under construction, the respondent company took portion of PECO factory building and provisionally shifted their machines to PECO. In early November, 1984 as a result of anti-Sikh riots and subsequent unrest, all the factories within the premises of PECO were closed for six and half months thereby losses were incurred. The factory land allotted in the name of PTPL at Phase-6 in the industrial area was required to be sold in April, 1988 and the respondent no.2 i.e. Gurucharan Singh settled the differences with the workers and resumed the factory production. To meet the paucity of fund 2.2 acres plot along with the factory building standing in the name of SECO was sold so that other units located within the premises of PECO would survive. After demise of Boota Singh on 16.06.1986, 1/3rd share of the paid-up-capital of the respondent company, as existing at the time of incorporation should have vested in 11 family members including his wife, four sons and six daughters. Since existing shareholders have pre- emptive right therefore, all shares issued and allotted after incorporation should have been allotted in the existing proportion of the shareholding. But the respondent no.2- Gurucharan Singh has allowed to include his name only in the subsequent and further allotment. In view of the understanding/family arrangement need for such allotment arose by reason of infusion of fresh capital, as a requirement of margin against bank loan and otherwise also. Even the petitioner’s father’s shares were also allowed to be shown only in the name of respondent no.2 but as per the family arrangement respondent no.2 remained only trustee for those additional shares on behalf of other family members. In fact, the shareholders of the respondent company were only notional holders of such shares, as the respondent company was incorporated by the capital provided by PECO. The respondent no.2 increased his percentage of shareholding in the respondent company over the period of time by allotting shares to his son, daughter-in-law and to himself and technically became the majority shareholder of the company by 2003-04 though in fact, the respondent no.2 and his family members held those shares as trustees on behalf of PECO; for benefit of all the members of the Hindu Undivided Family. Even the petitioners’ father’s shares were allowed to be shown in his name as per the said arrangement. Even the petitioners’ father’s shares were allowed to be shown in his name as per the said arrangement. As per the annual return of the financial year 2003-04 the shareholding within the family members of the respondent no.2 has been shown to be 28,255 out of the total subscribed and paid-up share capital of 30,000 shares which constitute 94.18% of the paid-up capital. The Annual return of the financial year 2009-10 indicated the total shareholding of the respondent no.2 and his family members at 58,220 as against the paid-up equity share capital of 63,355 shares which constituted 91.89% of paid-up capital. Having sensed about the respondent no.2’s fraudulent intentions, a suit was filed by one of the brothers of the petitioners namely Shri Rajwant Singh at Munsif Court at Jamshedpur in 2007 vide Civil Suit No. 146 of 2007 he being the plaintiff and Shri Gurucharan Singh, Shri Amolak Singh and Shri Baldev Singh being the defendant nos. 1, 2 and 3 respectively. It was later on decided by the parties to settle their dispute through arbitration. Shri Akhilesh Kr. Shrivastava was accepted as the sole arbitrator but the final arbitral award was not signed and accepted by all the partners of the partnership firm. The respondent no.2 Shri Gurucharan Singh refused to agree or abide by the arbitral award and to share the assets of the company in the manner decided by the arbitrator but with intervention of all the sisters two agreements were made on 24.03.2012 between Shri Baldev Singh, Shri Gurucharan Singh, Shri Amolak Singh and Shri Rajwant Singh. The respondent no.2 had no intention either to honour the said agreement or to transfer the said plot in the name of PECO back to the petitioner no.1. The respondent no.2 informed AIADA (Adityapur Industrial Area Development Authority) about such family settlement without handing over the said plot as per the agreement. The respondent no.2 fraudulently induced his daughter to become a director and further induced her to write to AIADA about the construction being carried out on the plots allotted to PECO as per the family settlement, as unauthorized. The respondent nos.5 to 7 were fraudulently appointed as directors of the said company and respondent nos.8 to 10 were fraudulently appointed as directors of the respondent company on 03.10.2012. The respondent nos.5 to 7 were fraudulently appointed as directors of the said company and respondent nos.8 to 10 were fraudulently appointed as directors of the respondent company on 03.10.2012. Further, the respondent nos.5 to 10 were fraudulently appointed as promoter-directors of the family company without conducting any AGM or EOGM. In addition, the respondent no.2 resigned from the company on 03.10.2012 to facilitate transfer the asset and liability of the family company to respondent nos.5 to 10. It was asserted by petitioners that the resignation of the respondent no.2 is in complete violation of the agreement of the members of the company and HUF. The respondent no.2 fraudulently allotted equity shares of Rs.10,00,000/- divided into 10,000 equity shares of Rs.100/- each with a motive to negotiate to the outside parties for sale of shares and all the rights and entitlements of HUF family members comprising of four brothers and six sisters were accrued out of transmission of shares by deceased father/mother. The respondent no.2 allotted 6,500 shares to his daughter and 3,500 shares to himself on 31.03.2012. This confirms about the fraudulent intention of the respondent no.2 who has tried to dispose of the assets and the properties of the company. The petitioners prayed for the following reliefs: - (i) To declare respondent nos.2 to 10 to be guilty of diverse acts of oppression and mismanagement as well as misappropriation of the assets and properties of the respondent company. (ii) To hold and declare the allotment of shares of Rs. 73,35,500/- to respondent nos. 2 to 4 being directors of the company and all other shareholders of the company and Form 2 thereof as illegal and null and void or alternatively, the register of members be altered to allocate shares in the names of the family members including the petitioners in proportion to the original shareholding of the company at the time of incorporation as the same could not have been altered under any circumstances as the respondent company is owned by the family business of PECO and all its initial shareholders representing the interest of all family members of HUF as per the original family business in the name and style of PECO. (iii) To hold and declare the appointment of respondent nos.5 to 7, dated 27.08.2012, who are all outsiders and not part of the family company, as null and void and inoperative. (iii) To hold and declare the appointment of respondent nos.5 to 7, dated 27.08.2012, who are all outsiders and not part of the family company, as null and void and inoperative. (iv) To hold and declare the appointment of respondent nos.8 to 10, dated 03.10.2012, who are all outsiders and not part of the family company, as null and void and inoperative. (v) To hold and declare the appointment of respondent no.3 (daughter of respondent no.2) and respondent no.4 (grandson of respondent no.2) as directors of the company, as null and void and inoperative. (vi) To hold and declare the resignation of respondent no.2 without any information to the family members of Sokhi family who own respondent no.1 company through PECO, as null and void and inoperative. (vii) To hold and declare all shares held by the respondent no.2 and his family members as trustees on behalf of the family members of Sokhi family purportedly transferred by respondent no.2 to outsiders, i.e. Garg family or to any of their companies owned and controlled by them, as null and void and inoperative. 4. The answering respondents before the Company Law Board filed an affidavit in reply contending therein that the answering respondents acting in a bona fide manner and upon payment of due consideration have purchased 72,605 shares of the company and consequently as of now, the Garg family representing respondent no.5 to 10 holds about 98.98% shares of the total shares issued, subscribed and paid-up capital of the company. The petitioners hold only 350 shares of the company representing 0.48% shares of the total issued, subscribed and paid-up capital of the company. It was also contended that the Gargs are not outsiders to the company as Pushpa Devi Garg, Prem Narayan Garg, Satish Pansari and Shankar Lal Gupta earlier together held about 400 shares in the company, way back during financial year 1974-75. After the change of management, the Board of Directors of the company has been reconstituted comprising the respondent nos. 5 to 10 and all the procedural formalities have been completed and necessary documents have been filed with the RoC/Bank, as well as AIADA reflecting the changes made. After the change of management, the Board of Directors of the company has been reconstituted comprising the respondent nos. 5 to 10 and all the procedural formalities have been completed and necessary documents have been filed with the RoC/Bank, as well as AIADA reflecting the changes made. It is then contended by the respondents that since the petitioners hold only a minuscule strength of the shares of the respondent no.1-company, hence with that strength, the petitioners are not entitled to invoke the jurisdiction of the Company Law Board for any order to be passed in the said petition. The respondents denied and disputed that the company was only a trustee of the assets belonging to PECO or carried on business on behalf of the PECO. The purported agreement for appointment of Shri Akhilesh Kumar Shrivastava as sole arbitrator is not acceptable to the answering respondents nor was binding upon them. They denied and disputed that the respondent nos. 5 to 7 were fraudulently appointed as Directors on 27.08.2012. 5. The petitioners thereafter filed a rejoinder in response to the affidavit-in-reply filed by the respondents contending therein that the alleged transfer of share to the respondent nos. 5 to 10 were made in utter violation of the mode of transfer prescribed under the Articles of Association of the respondent-company and the deponent has no right to act on behalf of the respondent-company in any manner whatsoever. The petitioners further contended that the authorized share capital of the respondent company was enhanced on 31.03.2012, without any information to the other shareholders of the company including petitioner no.1. The petitioners next contended that since the shareholding of the respondent nos. 2 to 4 were acquired dehors the provisions of Articles of Association of the respondent-company and also the provisions of the Companies Act, 1956, therefore, such acquisitions are null and void and void ab initio and the same cannot be legitimized in any manner. The petitioners next contended that since the shareholding of the respondent nos. 2 to 4 were acquired dehors the provisions of Articles of Association of the respondent-company and also the provisions of the Companies Act, 1956, therefore, such acquisitions are null and void and void ab initio and the same cannot be legitimized in any manner. As regards, the entitlement of the petitioners to move the instant petition under Section 399 of the Act, the petitioners reiterated their stand that since the petitioner no.1 was entitled to 33.33% of the paid-up share capital of the company along with 1/11th share of the deceased father’s shares which devolved upon him by operation of law, after his demise under the Hindu Succession Act, hence it has been urged that the entitlement of the petitioner under Section 399 of the Companies Act, 1956 cannot be questioned. The company law Board after considering the rival pleadings of the parties highlighted the following important facts which have direct bearing on the case under consideration:- (i) The main partnership firm for running the business of the family under the name and style of PECO was formed in 1956, under active participation of Late Boota Singh (father of the petitioner nos. 1 & 2 as well as the respondent no.2), Shri Gurucharan Singh, respondent no.2 and Shir Amolak Singh –petitioner no.2 as partners. (ii) Subsequently, Late Boota Singh retired from the partnership on 31.12.1965 because of his old age and new deed of partnership was drawn on 03.01.1966 having five partners including Mrs. Mohinder Kaur, wife of Late Boota Singh and Shri Gurucharan Singh – respondent no.2, Shri Amolak Singh –petitioner no.2, Shri Rajwant Singh, son of Late Boota Singh, Shri Baldev Singh –petitioner no.1 but the name of the partnership firm remained the same i.e. PECO carrying on the same family business as earlier under the co-partnership. (iii) The Company Law Board considered that nothing is available in the record to show that the partnership business has been dissolved as per the mutual consent of the partners and accordingly the unilateral claim of Shri Gurucharan Singh –respondent no.2 that partnership firm has been dissolved does not stand in law. (iii) The Company Law Board considered that nothing is available in the record to show that the partnership business has been dissolved as per the mutual consent of the partners and accordingly the unilateral claim of Shri Gurucharan Singh –respondent no.2 that partnership firm has been dissolved does not stand in law. As in the instant case, no such efforts were made till the disputes were referred to “Sole Arbitrator” and as the decisions/award passed by the sole arbitrator was not accepted or adhered to by the respondent no.2, the same could not have been done as per Clause 17 of the partnership agreement dated 03.01.1966. (iv) M/s Sokhi Engineering Company Private Limited was promoted by Late Boota Singh, respondent no.2 and petitioner no.1 each holding 100 shares giving no room for doubt that SECO is a family company since its incorporation. (v) The Company Law Board further considered that as per Clause 23 of the Articles of Association of the respondent company, no share shall be transferred to a person who is not a member so long as any member is willing to purchase the same at a fair value determined and as per Clause 25 of the Articles of Association of the said company, it has been indicated that in order to determine whether any member is willing to purchase shares sought to be transferred, the proposing transferor has to give notice in writing to the company that he desires to transfer the shares. The company within 28 days of being served with a transfer notice, shall find out a member willing to purchase the shares and shall give notice thereof to the proposing transferor and he shall be bound on payment of the fair value to transfer the shares to the purchasing member. As per Clause 26 of the Articles of Association, if the company shall not within the space of 28 days after being served with the transfer notice find a member willing to purchase the shares and shall not give notice to the members proposing to transfer the shares, the proposing transferor shall be at liberty to sell out the shares to any person at a price not less than the fair value of the shares determined in accordance with Clause 24 of the Articles of Association within a period of three months after the expiry of the said 28 days. (vi) The Company Law Board further considered that the claim of the respondent no.2 that he is the majority shareholder is based on wrong appreciation of existing facts because SECO was incorporated to run the business of fabrication department of PECO for which the relevant plot of land along with factory and other assets of the said division have been transferred to SECO by debiting investment account as against credit of assets so transferred to respondent no.1- company without any consideration in its books of accounts and thus, the new company i.e. SECO notionally represented the interest of PECO in the company and not otherwise. It further considered that even if the claim of the respondent no.2 as regards payment of Rs.9,50,000/- by the respondent no.1-company for transfer of assets by PECO to the respondent no.1-company is accepted as correct, as a result of such transfer of assets, shareholdings of father of petitioner no.1 and respondent no.2 in the respondent-company remained equal as the money so provided was by all three of them as per admission of respondent no.2 himself and thus, there is no question of respondent no.2 acquiring the status of majority shareholder in the respondent company as against the other equal stake holders, such as father of the respondent no.2 and petitioner no.1. (vii) Further it has been observed that the respondent no.2 increased the paid-up share capital of the respondent company in the year 2002-03 by making allotment of shares in the name of his wife, sons and daughters, but these were allowed on the understanding that the respondent –company continues to be a family company. (viii) The Company Law Board considered that at the time when the assets, properties, land were allowed to be used by respective brothers/partners, no valuation was made to such assets, properties, land etc. and as such, the claim of the respondent no.2 that SECO is a separate entity and belongs to his family members cannot be accepted. (ix) The Company Law Board further considered that another fact which has been revealed in course of proceeding is that of filing of criminal complaint by petitioner no.1 before Jamshedpur Court and that the Police Authorities after investigation have filed a report to the Jurisdictional Court for taking action against the complainant as there was no proof of that impugned allegations. The stand of the respondents has been that the petitioners have suppressed such facts and moreover the allegations made in the complaint and in the instant petition are almost similar. According to the petitioners, the investigating authority has gone beyond its jurisdiction and while making such investigation, no statement has been recorded either from the complainant or from the witnesses. At any event, the said criminal proceeding has not reached finality and also is not relevant for the purpose of deciding the issues involved in the present proceeding. 6. The Company Law Board further considered that SECO was set up by PECO and Late Boota Singh, Shri Baldev Singh and Shri Gurucharan Singh were promoter-directors in the said company. The entire assets including initial working capital were provided by PECO and these facts were not denied or controverted by any of the respondents. From the various documents and annexures attached to the petition, the Company Law Board came to the conclusion that the partnership firm of the family i.e. PECO was divided into four separate wings and/or entities for operational purpose so that the same can be run independently and each of the brothers was given separate responsibility in the management of the overall business of the firm. Therefore, SECO although is a separate entity but has continued to be working on a quasi-partnership principle because its root emanates from PECO, the family partnership firm. The Company Law Board brushed aside the contention of the respondents, before it, that the proceeding is barred by limitation on the settled principle of law that the plea of limitation does not arise in the case of proceeding relating to Section 397/398 under the Companies Act, 1956. So, the petitioners’ claim could not be barred on the ground of limitation. So, the petitioners’ claim could not be barred on the ground of limitation. The plea of the respondents that the petitioners do not even hold 1% of the total paid-up share capital of the company hence the case of the petitioners ought not be considered by the Company Law Board, was negated by the Company Law Board, because of the fact that the respondent no.1 –company was promoted by the deceased father, petitioner no.1 and respondent no.2 on behalf of the family concerned, i.e. PECO, each having 100 shares at the time of incorporation, therefore the petitioner no.1 was entitled for 33.33% shares of the company along with 1/11th of the shares of the father which devolved upon the petitioner no.1 by operation of law after the demise of his father. All the shares issued subsequently were not in accordance with the relevant provisions of the Companies Act or Articles of Association of the respondent no.1- company prescribed for the issue of additional capital. Thus, the entitlement of the petitioners under Section 399 of the Companies Act, 1956 to move the petition under Section 397/398 of the Companies Act, 1956 cannot be questioned. 7. So far as the contention of the respondent nos. 5 to 10 that they are bona fide purchasers of 72,605 shares of the respondent company upon payment of due consideration, hence this position cannot be altered; also did not find favour with the Company Law Board as, as per the Clauses 23, 25, 26, 27 of the Article of Association, the allotment of 72,605 shares to the outsiders is contrary to the respective provisions and in the absence of any evidence of any transfer notice being given by the transferor to the family members/shareholders searching for the prospective purchasers from the existing members, the said transfer to the outsider cannot be sustained and went on to declare the transfer of 72,605 shares as null and void, since the same having been done without the knowledge of the petitioner no.1 and other members of the company in view of the fact that the respondent-company being a closely held company, such transfer is bad in law and therefore, no right can accrue to the respondent nos. 5 to 10. So far as appointment of the respondent nos. 5 to 7 as directors of the respondent-company on 27.08.2012 and appointment of the respondent nos. 5 to 10. So far as appointment of the respondent nos. 5 to 7 as directors of the respondent-company on 27.08.2012 and appointment of the respondent nos. 8 to 10 as directors of the respondent-company on 03.10.2012 is concerned, the Company Law Board considered that no evidence showing any AGM or EOGM conducted for the said purpose has been placed on record. Similarly, the resignation of the respondent no.2 is in violation of the agreement of the members of the company, so such resignation cannot be justified. Therefore, the appointment of the respondent nos. 5 to 10 as directors of the respondent no.1-company as well as the resignation of the respondent no.2 as the director of the respondent no.1-company are not maintainable and accordingly set aside for further necessary action in accordance with law. 8. The Company Law Board then went on to consider that since the respondent no.2 even though has managed the respondent no.1-company since its incorporation being the Managing Director of the company on a quasi-partnership principle because the respondent company happened to be a family company, he by sheer greed and ambition to capitalize the net worth of the company, has initially allotted the shares of the company to himself and his other family members and subsequently, all the shares have been transferred to outsiders in contravention of relevant provisions of the Companies Act, 1956 and also the prevailing Articles of Association of the company for a big financial gain which cannot be sustained and therefore on equitable consideration, directed the respondent nos. 2 to 4 to refund the entire amount of consideration for transfer of 72,605 number of shares to the respondent nos. 5 to 10 and further ordered that consequently upon receipt of such consideration, the said respondents would hand over the impugned shares to the respondent no.1-company for cancellation of impugned transfer and re-issue and allotment of such shares to the members of the family in proportion to the initial shareholdings of such members on payment of due consideration for such re-issue/allotment or adjustment of consideration already paid. Alternatively, it was directed that the respondent no.1-company can buy back such shares by reduction of paid-up capital and releasing the consideration money to the relevant stake holders. Until such re-issue and re-allotment is carried out in accordance with law, the share certificates duly handed over by the respondent nos. Alternatively, it was directed that the respondent no.1-company can buy back such shares by reduction of paid-up capital and releasing the consideration money to the relevant stake holders. Until such re-issue and re-allotment is carried out in accordance with law, the share certificates duly handed over by the respondent nos. 5 to 10 shall be kept in safe custody under sealed cover by respondent no.1-company under direct supervision of the statutory auditor and consequently, the impugned transfer of shares shall be cancelled also and further directed that in the meantime, the respondent no.2 was to amicably settle the issues with the other partners, family members as well as the beneficiaries and resolve their disputes after conducting valuation of all the assets of the partnership business including the value of the respondent company. For this purpose, the earlier agreements dated 24.03.2012 which were drawn with the consent of all the family members may be re-visited for arriving at necessary settlement. The Company Law Board then went on to observe that after amicable settlement being arrived at, leave is granted to place the terms of settlement before the Company Law Board in respect of assets/properties of respondent no.1-company amongst its stake holders including the family members of Late Boota Singh and Mrs. Mohinder Kaur for taking the same on record and it was made clear that the Bench will not be in a position to examine the merits of such settlement amongst the stakeholders and interested parties and disposed of the Company Petition No. 912 of 2012 in the above terms. 9. It is submitted by the learned counsel for the appellants that the Company Law Board does not have the jurisdiction to deal with the disputed issue concerning title to shares. It is then submitted by the learned counsel for the appellants of Company Appeal No. 1 of 2014 that the entire case of the original company petitioners concerning the respondent no.1-company is based on the premise that the same is a family company which was incorporated with the funds of another family business i.e. that partnership firm PECO. The original company petitioner has also admitted that the company has raised its own funds for the purpose of meeting margin against bank loan by fresh allotment of shares which has been purchased by Gurucharan out of his own funds. The original company petitioner has also admitted that the company has raised its own funds for the purpose of meeting margin against bank loan by fresh allotment of shares which has been purchased by Gurucharan out of his own funds. The company petitioners in their letter dated 24th June, 1995 accepted that the company has been incorporated by Gurucharan Singh out of his own funds. Therefore, a disputed issued is being raised whether the respondent no.1 was a family company and whether shares held by respondent no.3 in his individual capacity as contended by him or as trustee for and on behalf of his own brother and sisters as alleged by the petitioners. This disputed issue raised by the company petitioners regarding right, title and interest of the shares held by Gurucharan Singh in the respondent no.1-company was never conclusively decided nor adjudicated. It is next submitted that there is no finding in the impugned order with regard to the authority of the Board to adjudicate upon the disputed issues. 10. Relying upon the Judgment of the Hon’ble Supreme Court of India in the case of Aruna Oswal Vs. Pankaj Oswal and Others reported in (2020) 8 SCC 79 , it is submitted by the learned counsel for the appellants of Company Appeal No. 1 of 2014 that in the facts of that case in an appeal preferred against the judgment and order passed by the National Company Law Appellate Tribunal concerning maintainability of the applications filed under Section 241 and 242 of the Companies Act and as admittedly a civil suit for partition was pending where the respondent no.1 before the Hon’ble Supreme Court was claiming rights in the shares held by the deceased to the extent of 1/4th, the Hon’ble Supreme Court of India held that the question as to the right of respondent no.1 is required to be adjudicated finally in the civil suit. 11. The learned counsel for the appellants of Company Appeal No. 1 of 2014 next relies upon the Judgment of the Hon’ble Supreme Court of India in the case of Bhagwati Prasad Vs. 11. The learned counsel for the appellants of Company Appeal No. 1 of 2014 next relies upon the Judgment of the Hon’ble Supreme Court of India in the case of Bhagwati Prasad Vs. Chandramaul reported in (1965) SCC Online SC 111 wherein the Hon’ble Supreme Court of India has reiterated the settled principle of law that if a plea is not specifically made and yet it is covered by an issue by implication, and the parties knew that the said plea was involved in the trial, then the mere fact that the plea was not expressly taken in the pleadings would not necessarily disentitle a party from relying upon it, if it is satisfactorily proved by evidence. The general rule no doubt is that the relief should be founded on pleadings made by the parties. But where the substantial matters relating to the title of both parties to the suit are touched, though indirectly or even obscurely, in the issues, and evidence has been led about them, then the argument that a particular matter was not expressly taken in the pleadings would be purely formal and technical and cannot succeed in every case. 12. The learned counsel for the appellants of Company Appeal No. 1 of 2014 next relies upon the Judgment of Calcutta High Court in the case of Government of West Bengal Vs. Chatterjee Petrochem (Mauritius) Co. and Others reported in 2007 SCC Online Cal 589 and submits that a counter filed in a company proceeding cannot make out a case for the petitioner. 13. The learned counsel for the appellants of Company Appeal No. 1 of 2014 next relies upon the Judgment of the Hon’ble Supreme Court of India in the case of J.P. Srivastava and Sons (P) Ltd. and Others Vs. Gwalior Sugar Co. Ltd. and Others reported in 2004 SCC Online SC 1358 wherein in para-47, the Hon’ble Supreme Court of India has observed that an equitable or beneficial interest in the shares does not make the owner of the interest a member of the company and in the facts of that case observed that even assuming that in terms of the trust deed the shares had devolved on the beneficiary of the trust, this would not mean that the owner of the shares registered with the Company would not be competent to file the petition under Sections 397 and 398. 14. 14. The learned counsel for the appellants of Company Appeal No. 1 of 2014 next relies upon the Judgment of the Hon’ble Supreme Court of India in the case of Trojan and Company Vs. RM. N.N. Nagappa Chettiar reported in (1953) 1 SCC 456 wherein the Hon’ble Supreme Court of India in para-38 reiterated the settled principle of law that the decision of a case cannot be based on grounds outside the pleadings of the parties and it is the case pleaded that has to be found. Without the amendment of the plaint, the court was not entitled to grant the relief not asked for and no prayer was ever made to amend the plaint so as to incorporate in it an alternative case. 15. The learned counsel for the appellants of Company Appeal No. 1 of 2014 next relies upon the Judgment of the Hon’ble Supreme Court of India in the case of Bachhaj Nahar Vs. Nilima Mandal and Another reported in (2008) 17 SCC 491 , in para-10 (ii) the Hon’ble Supreme Court of India has laid down the law that a court cannot make out a case not pleaded and the court should confine its decision to the question raised in pleadings. 16. The learned counsel for the appellants of Company Appeal No. 1 of 2014 then relies upon the Judgment of the Hon’ble Supreme Court of India in the case of Standard Chartered Bank Vs. 16. The learned counsel for the appellants of Company Appeal No. 1 of 2014 then relies upon the Judgment of the Hon’ble Supreme Court of India in the case of Standard Chartered Bank Vs. Andhra Bank Financial Services Ltd. and Others reported in (2006) 6 SCC 94 and submits that in para-29 thereof, the Hon’ble Supreme Court of India has observed that the nature of proceeding under Section 111 of the Companies Act, 1956 are slightly different from a title suit, although, Section 111(7) of the Companies Act, 1956 gives the tribunal the jurisdiction to decide any question relating to the title of any person who is a party to the application, to have his name entered in or omitted from the register and also the general jurisdiction to decide any question which it is necessary or expedient to decide in connection with such an application but such jurisdiction was summary in nature and that if a seriously disputed question of title arose, the Company Court should relegate the parties to a suit, which was the more appropriate remedy for investigation and adjudication of such seriously disputed question of title and submits that in this case, since the dispute of inheritance of the property of Boota Singh, the father of the petitioner no.1 and respondent no.2 of the Company Petition No. 912 of 2012 was in question, the tribunal ought to have relegated the parties to a suit instead of deciding that the petitioner no.1 was entitled to 1/11th share of his father Boota Singh. 17. The learned counsel for the appellants of Company Appeal No. 1 of 2014 next relies upon the Judgment of the Hon’ble Supreme Court of India in the case of Sangramsinh P. Gaekwad and Others Vs. Shantadevi P. Gaekwad (Dead) Through LRS. And Others reported in (2005) 11 SCC 314 wherein the Hon’ble Supreme Court of India has held that the Director of a company indisputably stands in a fiduciary capacity vis-à-vis the company, however fiduciary duty of the directors of the company should not be equated with a duty to the shareholders. 18. The learned counsel for the appellants of Company Appeal No. 1 of 2014 next relies upon the Judgment of the Calcutta High Court in the case of Shiva Nand Pandey and etc. Vs. 18. The learned counsel for the appellants of Company Appeal No. 1 of 2014 next relies upon the Judgment of the Calcutta High Court in the case of Shiva Nand Pandey and etc. Vs. Bhagwan Das Harlalka and Others reported in AIR 1999 Cal 321 wherein in the facts of that case, for the first time, only in affidavit-in-reply the allegation noted by the learned trial Judge were disclosed but no application for amendment of the writ application was filed and, thus, completely a new contention was raised for the first time in the affidavit-in-reply without filing the application for amendment of the writ application, the Hon’ble Calcutta High Court observed that the same would not be permitted. 19. The learned counsel for the appellants of Company Appeal No. 1 of 2014 next relies upon the Judgment of the Hon’ble Bombay High Court in the case of Procter and Gamble India Ltd. & Another Vs. Endolabs Limited & Others reported in 1999 SCC Online Bom 805 , wherein in the facts of that case, it was observed by the Hon’ble Bombay High Court that in affidavit in rejoinder, the plaintiffs cannot be permitted to materially improve their case. 20. The learned counsel for the appellants of Company Appeal No. 1 of 2014 next relies upon the Judgment of the Hon’ble Supreme Court of India in the case of Mumbai International Airport Private Limited Vs. Regency Convention Centre and Hotels Private Limited and Others reported in (2010) 7 SCC 417 wherein it was observed by the Hon’ble Supreme Court of India that discretion of the court to add a person as a party is limited to the person found to be the necessary party or proper party. 21. The learned counsel for the appellants of Company Appeal No. 1 of 2014 next relies upon the Judgment of the Hon’ble Supreme Court of India in the case of Dale & Carrington INVT. (P) Ltd. And Another Vs. P.K. Prathapan And Others reported in (2005) 1 SCC 212 wherein the Hon’ble Supreme Court of India, relying upon its own Judgment in the case of Rajahmundry Electric Supply Corporation Ltd. Vs. (P) Ltd. And Another Vs. P.K. Prathapan And Others reported in (2005) 1 SCC 212 wherein the Hon’ble Supreme Court of India, relying upon its own Judgment in the case of Rajahmundry Electric Supply Corporation Ltd. Vs. A. Nageshwara Rao reported in AIR 1956 SC 213 , held that the validity of a petition must be judged from the facts as they were at the time of its presentation, and a petition which was valid when presented cannot cease to be maintainable by reason of events subsequent to its presentation and the requirement about qualification of shares is relevant only at the time of institution of proceeding and in the facts of that case, since the petitioners were registered as shareholders on the company on the date of filing of the petition and they held the requisite number of shares in the company, the petition could be maintainable. 22. It is next submitted by the learned counsel for the appellants that the findings given by the Company Law Board that SECO is a family company is wholly perverse and contrary to the documentary evidence available in the record. It is next submitted that the Company Law Board erred in holding that the transfer of 72,605 shares to the respondent nos. 5 to 10 are null and void. 23. The learned counsel for the appellant of Company Appeal No. 2 of 2014 relies upon the Judgment of Hon’ble Supreme Court of India in the case of Moreshar Yadaorao Mahajan Vs. Vyankatesh Sitaram Bhedi (Dead) Through LRs. And Others reported in 2022 SCC Online SC 1307 and submits that therein the Hon’ble Supreme Court of India has discussed in details as to who is the necessary party and who is the proper party. 24. The learned counsel for the appellant of Company Appeal No. 2 of 2014 next relies upon the Judgment of High Court of Allahabad in the case of Raja Ram Jaiswal Vs. Ganesh Prasad and Others reported in AIR 1959 All 29 and submits that a director of a company is not necessarily the agent of the company or its shareholders. 25. The learned counsel for the appellant of Company Appeal No. 2 of 2014 next relies upon the Judgment of Hon’ble Supreme Court of India in the case of State of Rajasthan Vs. 25. The learned counsel for the appellant of Company Appeal No. 2 of 2014 next relies upon the Judgment of Hon’ble Supreme Court of India in the case of State of Rajasthan Vs. Ucchab Lal Chhanwal reported in (2014) 1 SCC 144 and submits that in that case as the juniors have been promoted without arraying the earlier promoted persons to the lis and thus the persons who were earlier promoted became juniors to the persons who were subsequently promoted, the Hon’ble Supreme Court of India considered that the adverse orders cannot be passed against them in their absence as the same violates the basic tenet of the principles of natural justice and set aside the order of the writ court. It is next submitted that in this case, since the appellant -Garg Engineers has purchased shares of the respondent no.1-company in the company petition, so the order passed by the Company Law Board is not sustainable in law having been passed behind the back of the appellants. 26. The learned senior counsel for the respondents on the other hand drawing attention of this Court to Section 399 of the Companies Act, 1956 which reads as under:- “399. Right to apply under Sections 397 and 398. — (1) The following members of a company shall have the right to apply under Section 397 or 398: (a) in the case of a company having a share capital, not less than one hundred members of the company or not less than one-tenth of the total number of its members, whichever is less, or any member or members holding not less than one-tenth of the issued share capital of the company, provided that the applicant or applicants have paid all calls and other sums due on their shares; (b) in the case of a company not having a share capital, not less than one-tenth of the total number of its members. (2) For the purposes of sub-section (1), where any share or shares are held by two or more persons jointly, they shall be counted only as one member. (3) Where any members of a company are entitled to make an application in virtue of sub-section (1), any one or more of them having obtained the consent in writing of the rest, may make the application on behalf and for the benefit of all of them. (3) Where any members of a company are entitled to make an application in virtue of sub-section (1), any one or more of them having obtained the consent in writing of the rest, may make the application on behalf and for the benefit of all of them. (4) The Central Government may, if in its opinion circumstances exist which make it just and equitable so to do, authorise any member or members of the company to apply to the [Tribunal] under Section 397 or 398, notwithstanding that the requirements of clause (a) or clause (b) as the case may be, of sub-section (1) are not fulfilled (5) The Central Government may, before authorising any member or members as aforesaid, require such member or members to give security for such amount as the Central Government may deem reasonable, for the payment of any costs which the [Tribunal] dealing with the application may order such member or members to pay to any other person or persons who are parties to the application.” (Emphasis supplied) submits that the same envisages that not less than one-tenth of the total number of members or in case of the company having a share capital not less than one hundred members of the company, whichever is less, shall have the right to apply under Section 397 and 398 of the Companies Act, 1956. It is then submitted that in this case altogether 11 members of the company were there and two of them filed the proceeding under Section 397 and 398 of the Companies Act, 1956, so they constituted not less than 1/10th share of the total number of members. Therefore, there is absolutely no substance in the contention raised by the appellants that the Company Petition at the behest of the petitioners is not maintainable. 27. The learned senior counsel for the respondents relying upon the Judgment of the Hon’ble Supreme Court of India in the case of Gulf Oil Corporation Limited Vs. State of Telangana and Others reported in (2022) 19 SCC 218 submits that in para- 70 thereof which reads as under:- “70. The judgments relied upon by Shri Salve such as Ibrahim Uddin [Union of India v. Ibrahim Uddin, (2012) 8 SCC 148 : (2012) 4 SCC (Civ) 362] , and Biraji [Biraji v. Surya Pratap, (2020) 10 SCC 729 : (2021) 1 SCC (Civ) 30] are not helpful to the arguments raised. The judgments relied upon by Shri Salve such as Ibrahim Uddin [Union of India v. Ibrahim Uddin, (2012) 8 SCC 148 : (2012) 4 SCC (Civ) 362] , and Biraji [Biraji v. Surya Pratap, (2020) 10 SCC 729 : (2021) 1 SCC (Civ) 30] are not helpful to the arguments raised. In fact, the lessees were aware of the controversy in respect of nature of land and its statutory cancellation, therefore, the lack of pleadings or the evidence loses its significance. The 1987 Act is a Code in itself providing for constitution of the Endowments Tribunal, appeal, revision and review. The strict rule of procedure contemplated by the Code of Civil Procedure, 1908 in respect of pleadings and evidence cannot be extended to the Tribunal constituted for specific purpose. Since the lessees were aware of the fact that the Mutt claims the land to be agricultural land and statutory cancellation of the lease was being averred for the reason that the leased land was agricultural, therefore, the lessees cannot complain of any violation of principles of natural justice or strict rules of pleading as is required under the Civil Procedure Code, 1908.” (Emphasis supplied) submits that it is the settled principle of law that the strict rules of procedure contemplated by the Code of Civil Procedure in respect of pleadings and evidence cannot be extended to the Tribunals constituted for the specific purpose. It is then submitted that Company Law Board has been constituted for the specific purpose and the Companies Act, 1956 is a code in itself, so all the judgements relied upon by the appellants regarding the strict application of the principle of pleadings being in the matter of suits, the ratios of those judgements are not applicable to the facts of this case. It is further submitted by the learned senior counsel for the respondents that the Hon’ble Supreme Court of India has distinguished the Judgment of Bachhaj Nahar Vs. Nilima Mandal and Another (supra) in the case of Gulf Oil Corporation Limited Vs. It is further submitted by the learned senior counsel for the respondents that the Hon’ble Supreme Court of India has distinguished the Judgment of Bachhaj Nahar Vs. Nilima Mandal and Another (supra) in the case of Gulf Oil Corporation Limited Vs. State of Telangana and Others (supra) and has reiterated the equally settled principle that the Telangana Charitable Hindu Religious Institutions and Endowment Act, 1987 is a Code in itself providing for constitution of the Endowments Tribunal, Appeal, Revision and Review; the strict rule of procedure contemplated by the Code of Civil Procedure, 1908 in respect of pleadings and evidence cannot be extended to the Tribunal constituted for the specific purpose, and submits that in this case, the Company Law Board being a Tribunal constituted for the specific purpose, the principles of Bachhaj Nahar Vs. Nilima Mandal and Another (supra) is not applicable to the facts of this case. 28. The learned senior counsel for the respondents also relies upon the Judgment of the Hon’ble Supreme Court of India in the case of Dale & Carrington INVT. (P) Ltd. And Another Vs. P.K. Prathapan And Others (supra) and submits that in that Judgment at page no. 226 wherein it has been held that the Articles of a company are its constituent document and are binding on the company and its directors. In that case, the Hon’ble Supreme Court of India relied upon its own Judgment in the case of Needle Industries (India) Limited Vs. Needle Industries Newey (India) Holding Limited reported in (1981) 3 SCC 333 wherein it was observed that if the power to issue shares is exercised from an improper motive, the issue is liable to be set aside and it is immaterial that the issue is made in a bona fide belief that it is in the interest of the company. It is then submitted that in the case of Tea Brokers (Private) Limited Vs. Hemendra Prosad Barooah reported in (1998) 5 Comp. LJ 463 which was referred in para-23 of the said judgment of Dale & Carrington INVT. (P) Ltd. And Another Vs. It is then submitted that in the case of Tea Brokers (Private) Limited Vs. Hemendra Prosad Barooah reported in (1998) 5 Comp. LJ 463 which was referred in para-23 of the said judgment of Dale & Carrington INVT. (P) Ltd. And Another Vs. P.K. Prathapan And Others (supra), it has been held that an exercise of power by the Directors in the matter of allotment of shares, if mala fide and in their own interest and not in the interest of the company, will be invalid even though the allotment may result incidentally in some benefit to the company and it was further held that if a member who holds the majority of shares in a company is reduced to the position of minority shareholder in the company by an act of the company or by its Board of Directors mala fide, the said act must ordinarily be considered to be an act of oppression to the said member. 29. The learned senior counsel for the respondents next relies upon the Judgment of the Hon’ble Madras High Court in the case of K. Muthusamy and Another Vs. S. Balasubramanian and Others reported in 2011 SCC Online Mad 256 wherein it was observed by the Hon’ble Madras High Court that Section 10E(5) of the Companies Act, 1956 states that the Board, in exercise of its powers and discharge of its functions, shall be guided by the principles of natural justice and shall act in its discretion and Section 10E(5) and (6) of the Companies Act, 1956 confer a discretion upon the Board to regulate its own procedure and be guided by the principles of natural justice and the Regulation 48 of the Company Law Board Regulation of 1991 goes a step further by empowering the Bench to dispense with the requirements of any of the regulations. 30. The learned senior counsel for the respondents in response to the Judgment of Raja Ram Jaiswal Vs. Ganesh Prasad and Others (supra), relied upon by the learned counsel for the appellant of Company Appeal No. 2 of 2014 submits that the facts of that case is entirely different from the facts of this case. It is next submitted by the learned senior counsel for the respondents that the company is a juristic person and does not have any hands and legs. It is next submitted by the learned senior counsel for the respondents that the company is a juristic person and does not have any hands and legs. It has to be represented by its Directors and all the Directors who at the time of filing of the Company Appeal No. 2 of 2014 were the Directors of the Appellant-Garg Engineers Limited were parties before the Company Law Board and they never raised their objection that the proceeding before the Company Law Board is bad for non-joinder of necessary parties and having not done so and having been well aware about the proceedings, it is not open for them to raise a plea for the first time before this Court that this proceeding is bad for non-joinder of necessary parties. 31. The learned senior counsel for the respondents next relies upon the Judgment of the Allahabad High Court in the case of Union India Sugar Mills Company Limited reported in 1933 0 AIR (All) 607 ; 1933 0 ILR (All) 810 , which is to the effect that notice to an agent is undoubtedly notice to the principal and therefore, notice to the company’s agent would be notice to the company itself and submits that this submission is made in respect of Company Appeal No. 2 of 2014 where undisputedly the directors of the appellant of the said appeal were parties to the Company Law Board and they being the agents of the appellant of that appeal namely Garg Engineers Limited, it is not open for them to agitate in this appeal that the said appeal is barred because of non-joinder of necessary parties. Hence, it is submitted that these company appeals being without any merit be dismissed. 32. In view of the submissions made by the learned counsel for the appellants, the following points for determination arise for consideration in Company Appeal No.1 of 2014:- I. Whether the petitioners were entitled to file a petition under Section 399 of the Companies Act, 1956? II. Whether the Company Law Board does not have jurisdiction to adjudicate the dispute raised before it by the petitioners? III. Whether the Company Law Board exceeded its jurisdiction in considering pleadings, in violation of the principle of pleadings provided for in the Code of Civil Procedure? IV. Whether the Company Law Board erroneously disposed of the Company Appeal? 33. II. Whether the Company Law Board does not have jurisdiction to adjudicate the dispute raised before it by the petitioners? III. Whether the Company Law Board exceeded its jurisdiction in considering pleadings, in violation of the principle of pleadings provided for in the Code of Civil Procedure? IV. Whether the Company Law Board erroneously disposed of the Company Appeal? 33. The following point for determination arises for consideration in Company Appeal No.2 of 2014:- “Whether the impugned judgement of the Company Law Board is bad in law because of not impleading Garg Engineers Limited as a party?” 34. Now coming to the first point for determination of Company Appeal No.1 of 2014 which is to the effect that whether the petitioners were entitled to file a petition under Section 399 of the Companies Act, 1956, is concerned, Section 399 of the Companies Act, 1956 makes it abundantly clear that in any company having share capital inter alia not less than one-tenth of the total number of the members of the company shall have the right to apply under section 397 or 398 of the said Act. The undisputed fact remains that the respondent no.1 company SECO has 11 members including the two petitioners before the Company Law Board in respect of which the impugned order has been passed. So, 2 out of 11 members, constitute more than one-tenth of the total number of members. Thus, this Court has no hesitation in holding that the petitioners were entitled to file a petition under Section 397 and 398 of the Companies Act, 1956, in view of the said provision in section 399 of the Companies Act, 1956. Therefore, the point for determination No. I of the Company Appeal No.1 of 2014 is answered in the affirmative. 35. Now coming to the second point for determination of the Company Appeal No.1 of 2014 as to whether the Company Law Board does not have jurisdiction to adjudicate the dispute raised before it by the petitioners is concerned, it is strenuously argued by the learned counsel for the appellants relying upon the judgement of the Hon’ble Supreme Court of India in the case of Standard Chartered Bank Vs. Andhra Bank Financial Services Ltd. and Others (supra) that therein it has inter alia been held in respect to the jurisdiction of the tribunal under section 111 (7) of the Companies Act, 1956 that the tribunal has the jurisdiction to decide any question relating to the title of any person who is a party to the application, to have his name entered in or omitted from the register and also the general jurisdiction to decide any question which is necessary or expedient to decide in connection with such an application but such jurisdiction was summary in nature and that if a seriously disputed question of title arose, the Company Court should relegate the parties to a suit and also relying upon the judgement of the Hon’ble Supreme Court of India in the case of Aruna Oswal Vs. Pankaj Oswal & Others (supra) wherein unlike the facts of this case, a suit for partition was pending between the parties, it was held that the issue of partition be decided by the Civil Court, that in this case the Company Law Board erred by adjudicating the entitlement of the petitioner no.1 to the 1/11th share of the property of his deceased father. But this Court finds that there is no force in such contention of the appellants because in this case there is no seriously disputed question is involved. It is the undisputed fact that the deceased father of the petitioner no.1, at the time of his death left behind his widow and four sons as well as six daughters. There is no dispute at all that each one of such 11 descendants of the late father of the petitioner no.1 are entitled to equal share from the property of the deceased father of the petitioner no.1. Thus, in the considered opinion of this Court the Company Law Board was well within its power and jurisdiction to arrive at the conclusion based on the materials in the record that the petitioners are entitled to 1/11th share of the property of their deceased father, in the absence of any serious dispute. Thus, the second point for determination of the Company Appeal No.1 is answered in the negative. 36. Thus, the second point for determination of the Company Appeal No.1 is answered in the negative. 36. So far as the third point for determination of the Company Appeal No.1 is which is to the effect that whether the Company Law Board exceeded its jurisdiction in considering pleadings, in violation of the principle of pleadings provided for in the Code of Civil Procedure, is concerned, in this respect the learned counsel for the appellants relied upon the Judgment of the Hon’ble Supreme Court of India in the case of Bachhaj Nahar Vs. Nilima Mandal and Another , (supra) wherein the Hon’ble Supreme Court of India has laid down the law that a court cannot make out a case not pleaded and the court should confine its decision to the question raised in pleadings. It is pertinent to mention here that the Hon’ble Supreme Court of India laid down the said law in respect of civil suits which are governed by the procedural law provided for in the Code of Civil Procedure. But in this case Company Law Board was exercising its power under section 397 and 398 of the Companies Act, 1956. In this respect it will be apposite to refer to the judgement of the Hon’ble Supreme Court of India in the case of Gulf Oil Corporation Limited Vs. State of Telangana and Others (supra) wherein the Hon’ble Supreme Court of India reiterated the equally settled principle that the strict rule of procedure contemplated by the Code of Civil Procedure, 1908 in respect of pleadings and evidence cannot be extended to the Tribunal constituted for the specific purpose. Further, Section 10E(5) of the Companies Act, 1956 states that the Company Law Board, in exercise of its powers and discharge of its functions, shall be guided by the principles of natural justice and shall act in its discretion and Section 10E(5) and (6) of the Companies Act, 1956 confer a discretion upon the Company Law Board to regulate its own procedure and be guided by the principles of natural justice and the Regulation 48 of the Company Law Board Regulation of 1991 goes a step further by empowering the Bench to dispense with the requirements of any of the regulations. Moreover the Hon’ble Supreme Court of India in the case of Bhagwati Prasad Vs. Moreover the Hon’ble Supreme Court of India in the case of Bhagwati Prasad Vs. Chandramaul reported in 1965 SCC Online SC 111 reiterated the settled principle of law that if a plea is not specifically made and yet it is covered by an issue by implication, and the parties knew that the said plea was involved in the trial, then the mere fact that the plea was not expressly taken in the pleadings would not necessarily disentitle a party from relying upon it, if it is satisfactorily proved by evidence. The general rule no doubt is that the relief should be founded on pleadings made by the parties. But where the substantial matters relating to the title of both parties to the suit are touched, though indirectly or even obscurely, in the issues, and evidence has been led about them, then the argument that a particular matter was not expressly taken in the pleadings would be purely formal and technical and cannot succeed in every case. Keeping in view the settled principle of law as discussed above, this Court is of the considered view that since the Company Law Board has adhered to the principles of natural justice, and it is not even the case of the appellants that they were taken by surprise by pleas of the rival parties considered by the Company Law Board and the undisputed facts that the plea of the parties considered by the Company Law Board was known to one another and the Company Law Board being a tribunal constituted for the specific purpose, was exempted from strict adherence to the principle of pleadings as provided for in the Code of Civil Procedure, 1908. Therefore, the third point for determination of the Company Appeal No.1 of 2014 is answered in the negative by holding that the Company Law Board has not exceeded its jurisdiction in considering pleadings, in violation of the principle of pleadings provided for in the Court of Civil Procedure. 37. So far as the fourth point for determination of Company Appeal No.1 of 2014 which is to the effect that whether the Company Law Board erroneously disposed of the Company Appeal is concerned, it is pertinent to mention here that as has been held by in the Judgment of the Hon’ble Supreme Court of India in the case of Dale & Carrington INVT. (P) Ltd. And Another Vs. (P) Ltd. And Another Vs. P.K. Prathapan And Others (supra) in page no. 226 the Articles of Association of a company are its constituent document and are binding on the company and its directors. The undisputed fact remains that as per Clause 23 of the Articles of Association of the company, no share shall be transferred to a person who is not a member, so long as any member is willing to purchase the same at a fair value determined and as per Clause 25 of the Articles of Association of the said company, it has been indicated that in order to determine whether any member is willing to purchase shares sought to be transferred, the proposing transferor has to give notice in writing to the company that he desires to transfer the shares. The company within 28 days of being served with a transfer notice, shall find out a member willing to purchase the shares and shall give notice thereof to the proposing transferor and he shall be bound on payment of fair value to transfer the shares to the purchasing member. As per Clause 26 of the Articles of Association, if the company shall not within the space of 28 days after being served with the transfer notice, find a member willing to purchase the shares and shall not give notice to the members proposing to transfer the shares, the proposing transferor shall be at liberty to sell out the shares to any person at a price not less than the fair value of the shares determined in accordance with Clause 24 of the Articles of Association within a period of three months after the expiry of the said 28 days. The undisputed fact also remains that so far as transfer of shares of the company to the respondent no. 5 to 10 before the Company Law Board who were not the family members of the petitioners; the said procedure of offering the shares to the family members was not followed. 38. As has been observed by the Hon’ble Supreme Court of India in the case of Needle Industries (India) Limited Vs. 5 to 10 before the Company Law Board who were not the family members of the petitioners; the said procedure of offering the shares to the family members was not followed. 38. As has been observed by the Hon’ble Supreme Court of India in the case of Needle Industries (India) Limited Vs. Needle Industries Newey (India) Holding Limited (supra) if the power to issue shares is exercised from an improper motive, the issue is liable to be set aside and it is immaterial that the issue is made in a bona fide belief that it is in the interest of the company. In view of such settled principle of law in the considered opinion of this Court since the transfer of shares to the respondent no. 5 to 10 before the Company Law Board was not in accordance with the procedure provided thereof, hence, this Court has no hesitation in holding that the Company Law Board has not committed any error in disposal of the petitioner before it. Therefore, the fourth point for determination of Company Appeal No.1 of 2014 which is the effect that whether the Company Law Board erroneously disposed of the Company Appeal, is answered in the negative. 39. Now coming to the sole point for determination of Company Appeal No.2 of 2014 which is to the effect that whether the impugned judgement of the Company Law Board is bad in law because of not impleading Garg Engineers Limited as a party is concerned, the undisputed fact remains that at the time of filing of Company Appeal No.2 of 2014 all the directors of the appellant of Company Appeal No.2 of 2014 were parties to the petition before the Company Law Board. The undisputed fact remains that none of them raised the plea that the petition filed before the Company Law Board is bad for non-joinder of necessary parties. The undisputed fact remains that none of them raised the plea that the petition filed before the Company Law Board is bad for non-joinder of necessary parties. As this Court has already concurred with the finding of the Company Law Board that the transfer of shares of the company to the respondent no.5 to 10 before the Company Law Board was not in accordance with law hence was not sustainable in law and therefore this Court is of the considered view that when all the directors of the appellant of Company Appeal No.2 of 2014 were made parties to the petition and they did not take the plea that the appellant of Company Appeal No.2 of 2014 be made a party to the said petition, certainly it is not open for them to challenge the order passed on the ground that the same is bad for nonjoinder of necessary parties. Therefore, the sole point for determination of Company Appeal No.2 of 2014 as to whether the impugned judgement of the Company Law Board is bad in law because of not impleading Garg Engineers Limited as a party is answered in the negative. 40. In view of the discussions made above and answers given to the points for determinations, both these appeals i.e. Company Appeal No.1 of 2014 and Company Appeal No.2 of 2014, being without any merit are dismissed on contest but in the circumstances without any costs. 41. In view of the dismissal of both these company appeals, the interlocutory application, pending if any, is disposed of being infructuous. 42. Let a copy of this judgement along with the Trial Court Records be sent to the Company Law Board forthwith.