1995 (12) TMI 279 - HC - Companies Law

Summary

Issues:
Application under section 392 of the Companies Act, 1956 for direction to issue share certificates and ancillary direction post amalgamation scheme.

Analysis:
The case involved two applications filed under section 392 of the Companies Act, 1956. The first application sought a direction for the issuance of share certificates in accordance with the scheme of amalgamation, and the second application sought a direction to prevent any actions contrary to the amalgamation scheme. The applicant, a company holding shares in a merged entity, alleged that the respondent failed to allot shares as per the approved scheme, leading to a dispute. The respondent contended that the share allotment was done based on information provided by the merged company's director and challenged the maintainability of the application. The court analyzed the contentions and the provisions of the Companies Act to determine the validity of the applications.

The court noted that the dispute primarily revolved around the entitlement to shares post-amalgamation. While the applicant claimed a specific share ratio as per the scheme, the respondent argued that the allotment was based on information provided by the merged company's director. The court emphasized that the dispute regarding the shareholding of the merged entity was beyond the scope of section 392 and should be addressed in the civil court where related suits were already pending. Referring to a previous judgment, the court highlighted that matters not explicitly covered under the Companies Act should be dealt with in the civil court, reinforcing the need to seek appropriate relief through the proper forum.

Ultimately, the court held that the applications were not maintainable under section 392 of the Companies Act due to the nature of the dispute concerning share ownership post-amalgamation. Consequently, both applications were dismissed, with a directive for the parties to pursue the matter in the civil court if necessary. The judgment clarified that its orders did not restrict the parties from seeking recourse in the appropriate legal forum, affirming the principle of seeking relief where specific provisions of the law do not apply.