BEFORE THE COMPANY LAW BIOARD

PRINCIPAL BENCH

NEW DELHI

Dated     November 2001

C.P. No 112/2000

 

               Present: 1. Sh. A.K.Banerji, Chairman

      2. Sh.S.Balasubramanian, Vice Chairman

 

In the matter of Companies Act, 1956-Sections 397/398

AND

In the matter of Shrimati Namita Gupta and Ors.

Versus

M/S Surma Valley Stock Limited

 

PETITIONERS:

1.     Smt. Namita Gupta

2.     Shri Ranendra Kumar Gupta

3.     Smt. Lena Gupta

4.     Smt. Rekha Gupta

5.     Smt. Ashoka Gupta

6.     Shri Arup Bose

7.     Smt. Nandini Dutta/Banerjee

8.     B.C. Gupta & Sons Ltd.

9.     Cachar Native Joint Stock Co. Ltd.

RESPONDENTS:

1.     Surma Valley Stock Limited

2.     Shri Subhas Mohan Deb

3.     Shri Hamir Kumar Roychoudhury

4.     Shri Dibyajyoti Narayan Dutta

5.     Shri Buddhadev Sen

6.     Smt. Sharmila Dutta

7.     Shri Basudev Gupta

Present on behalf of parties:

1. Shri Sudipto Sarkar, Sr. Advocate                      .. for petitioners

2. Shri Sanjib Banerjee, Advocate                           .. for petitioners

3. Ms. Reema Bhandari Chaterjee                           .. for petitioners

4. Shri A.K. Ganguly, Sr. Advocate                        .. for respondents

5. Shri A. Bhattacharjee, Advocate                         .. for respondents

 

O R D E R

(Date of final hearing: 3.7.2001)

 

S. BALASUBRAMANIAN:

 

1.     The petitioners claiming to hold over 10%  shares in Surma Valley Stock Limited ( the company) have filed this petition under Sections 397/398 of the Companies Act, 1956 ( the Act ) alleging oppression and mismanagement in the affairs of the company. The main grievance in the petition are that  the respondents 2 to 7 have acted against the interest of the company by allowing transfer of  2000 shares held by the 9th petitioner in the company and also by making payment of unpaid amount of Rs.40/- which was unpaid and uncalled up  on 400 shares held by the company in the 9th petitioner. Consequently they have sought for a declaration that the transfer of 2000 shares held by the 9th petitioner in the company is illegal and null and void and also for a declaration that the paid up value of the 400 shares held by the company in the 9th petitioner is only Rs.10/-, for restraining the respondents from transferring the 400 shares held by the company in the 9th petitioner, restraining  the company from effecting further transfer of the 2000 shares held by the petitioner and restraining the company from convening any general meeting of the company without rectifying the accounts of the company.

2.     Shri Sarkar, Sr. Advocate appearing for the petitioners submitted: The petitioners had earlier filed a petition  CP 8 of 1998 in respect of the affairs of the 9th petitioner. By an order dated 4th April, 2000, this Bench had declared that members of the petitioners’ groups had been elected as directors of the 9th petitioner in the EOGM held on 29.11.1999. This order was challenged by the respondents before the Gauhati High Court which by an order dated 5.5.2000 directed maintenance of status quo as on that date.  However, the respondents in their capacity as directors of the 9th petitioner had taken various decisions detrimental to the interest of the company and also the shareholders of the company as well as the 9th petitioner only with the sole object of gaining absolute control of the 9th petitioner.  The company held 400 partly paid shares in the 9th petitioner which were allotted as early as in 1936.  The amount paid up was Rs.10/- as against the face value of Rs.50/-. This is practically the only asset of the company and it has no other business also. Since as per the Articles of Association of the 9th petitioner, the voting on shares was on the basis of the paid up value, with a view to gain higher voting rights, the respondents 2 to 7 constituting the illegal Board of the 9th petitioner who incidentally control the Board of the company, have arranged to get all these 400 shares fully paid during the interregnum period between 28.11.1999 and 4.4.2000.  It is notwithstanding the fact that in the order dated 1st June 1999, this Bench had specifically directed that the 9th petitioner should not increase its paid up capital.  Thus, the respondents have not only violated the order of this Bench but also have acted against the interest of the majority shareholders of the 9th petitioner. 

3.     He further submitted: The 9th petitioner held 2000 shares in the company and thus was in a position to control the composition of the Board of Directors of the company.  The respondents apprehending that they might lose the directorship of the 9th petitioner, have transferred these shares to an undisclosed person so that through the 400 shares held by the company, they could influence the composition of the Board of the 9th petitioner.  Thus, they have acted malafide in transferring these shares.  Since they themselves constitute the Board of the company, they effected the registration of this transfer.  Accordingly, he sought for the grant of the prayers made in the petition. 

4.     Shri Ganguly, Sr. Advocate appearing for the respondents submitted: The petition is nothing but an abuse of process of the Bench.  Both the issues raised in the petition have already been considered by this Bench on the application CA 184 of 2001 filed  by the petitioners and this Bench had declined to pass any order on these issues and therefore the principles of adjudicata would apply. On this proposition, he relied on YB Patis Vs. YL Patis ( 1976  4  SCC  66 ) wherein it has been held that adjudicata would apply at subsequent stage of the proceedings in respect of orders already considered final in the very same proceeding.  Even otherwise, both the issues raised in the petition relate to the affairs of the 9th petitioner.  Accordingly, he prayed for the dismissal of the petition.

5.     We have considered the pleadings and arguments of the counsel.  As rightly pointed out by the learned counsel for the respondents that the issues raised in the petition directly relate to the affairs of the 9th petitioner against which the petitioner has already filed a petition CP 11 of 2000. Calling of unpaid money on the shares by the 9th petitioner and the sale of the shares by the 9th petitioner could never be considered to be falling within the affairs of the respondent company.  In a 397/398 petition, it is the affairs of the respondent company which have to be examined by us.  In the present case, since both the issues raised in the petition relate to the  affairs of the 9th petitioner, we do not consider that any effective order could be passed in this petition on the two issues raised in the petition.  However, in relation to the prayer that the company should be restrained from transferring 400 shares held in the 9th petitioner, and also for restraining  the company from registering further transfer of the 2000 shares, in view of our directions in CP 11 of 2000, nothing survives on these issues.

6.     Accordingly, this petition is dismissed.

 

(S. Balasubramanian )                                                              (A.K. Banerji )