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Issues Involved:
1. Maintainability of the Petition 2. Plea of Limitation 3. Validity of Share Transfers 4. Temporary Injunction Issue-wise Detailed Analysis: 1. Maintainability of the Petition: The learned single judge considered the maintainability of the petition under section 155 of the Companies Act, 1956. The court held that the petition was maintainable in respect of the 36,900 shares of Steel Enterprises (P.) Ltd. but not in respect of the shares of late H. K. Somani and Smt. Ratan Devi Somani. The judge referred to the supervisory jurisdiction of the court, stating that if certain blocks of shares are likely to affect the management of the company, it would be appropriate for the High Court to decide the matter expeditiously rather than relegating the parties to a civil suit. However, the appellate court disagreed with the concept of supervisory jurisdiction beyond specific provisions, emphasizing that the court's concern should be limited to ensuring that the company's affairs are managed according to rules and regulations. 2. Plea of Limitation: The learned single judge repelled the plea that the petition was barred by time, indicating that the petition was within the statutory period. The appellate court noted that the findings on maintainability and limitation were tentative and not final. The judge had recorded these findings to decide the application for temporary injunction and had not intended to make a final determination without framing issues and allowing the parties to adduce evidence. 3. Validity of Share Transfers: The dispute involved the validity of the transfer of shares from Steel Enterprises (P.) Ltd., late H. K. Somani, and late Smt. Ratan Devi Somani. The petitioner alleged that the transfers were fraudulent and illegal, while the opposite parties contested these claims, affirming that the transfers were made for valuable consideration and were duly registered. The appellate court refrained from making any comments on the validity of these transfers, as they were to be decided in the final determination of the petition. The court emphasized that the resolution of such controversies would require more affidavits and evidence than what had been filed at the interlocutory stage. 4. Temporary Injunction: The learned single judge granted a temporary injunction restraining the opposite parties from transferring the disputed shares and exercising voting rights in respect of the shares of Steel Enterprises (P.) Ltd. The appellate court, however, found that the balance of convenience did not lie in favor of the petitioner. The petitioner had not demonstrated that he would suffer irreparable injury if the temporary injunction was refused. The court noted that the opposite parties had been exercising voting rights for almost seven years, and it would be inequitable to deprive them of these rights during the pendency of the petition. Consequently, the appellate court modified the injunction order, restraining the opposite parties from transferring the disputed shares but allowing them to continue exercising their voting rights. Conclusion: The appellate court allowed the appeals partly, modifying the temporary injunction order. The opposite parties were restrained from transferring the shares held by late H. K. Somani and Smt. Ratan Devi Somani, as well as the 36,900 shares purchased from Steel Enterprises (P.) Ltd. However, they were permitted to continue exercising their voting rights. The court emphasized the need for a final determination on the maintainability, limitation, and validity of the share transfers after a thorough examination of evidence. The interim stay orders were vacated, and the parties were directed to bear their own costs.
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