2005 (7) TMI 367 - HC - Companies Law

Summary

Issues Involved:
1. Permanent injunction against structural changes in company management.
2. Allegation of misrepresentation and fabrication of documents.
3. Plaintiff's resignation and transfer of shares.
4. Plaintiff's right to file the suit.
5. Examination of the Power-of-Attorney holder.

Detailed Analysis:

1. Permanent Injunction Against Structural Changes in Company Management:
The plaintiff-appellant sought a permanent injunction to prevent respondent No. 1 from making any structural changes in the management of "M/s. Hotel Aristocrat Pvt. Ltd." and from misrepresenting the court regarding her status as a lifetime Director. The trial court initially decreed in favor of the plaintiff, finding that the resignation and transfer of shares were not conclusively proven by the defendant. However, the lower appellate court reversed this decision, concluding that the plaintiff had indeed resigned and transferred her shares, thus losing her right to continue as a Director.

2. Allegation of Misrepresentation and Fabrication of Documents:
The plaintiff alleged that respondent No. 1 fabricated documents to show her resignation from the Board of Directors. The trial court found in favor of the plaintiff due to the lack of conclusive evidence from the defendant. However, the lower appellate court found no specific pleading in the plaint regarding the fabricated document and concluded that the plaintiff had voluntarily resigned, supported by her own admissions and documentary evidence (Exts. 2 and 3).

3. Plaintiff's Resignation and Transfer of Shares:
The primary contention was whether the plaintiff had resigned and transferred her shares. The trial court found that the resignation and transfer were not conclusively proven. Conversely, the lower appellate court found substantial evidence, including the plaintiff's own admissions and documentary evidence, indicating that she had resigned on 9-2-1994 and transferred her shares to Nidhi Sudan Behera. The appellate court also noted that the plaintiff failed to produce any share certificate to prove her continued directorship.

4. Plaintiff's Right to File the Suit:
The appellate court held that since the plaintiff had resigned and transferred her shares, she had no right to file the suit claiming herself as a director. The court emphasized that the plaintiff failed to prove her status as a director at the time of filing the suit.

5. Examination of the Power-of-Attorney Holder:
The plaintiff argued that adverse inference should be drawn against respondent No. 1 for not examining himself and instead examining his Power-of-Attorney holder. The court found this argument irrelevant, given the findings that the plaintiff was not a director at the time of filing the suit.

Conclusion:
The High Court of Orissa dismissed the second appeal, concluding that the plaintiff had resigned from the directorship and transferred her shares, thereby losing her right to file the suit. The court found no substantial question of law to be decided and upheld the lower appellate court's findings, dismissing the appeal without costs.