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Issues involved: Dispute over valuation of shares, oppression, and mismanagement u/s 397 and 398 of the Companies Act, 1956.
Summary: The Supreme Court heard appeals related to a dispute between a shareholder-director holding 40% shares and other shareholders-directors holding 60% shares in a company. The appellant alleged oppression and mismanagement and filed a petition u/s 397 and 398 of the Companies Act, 1956. The Company Law Board (Board) gave an option to the appellant to sell his shares to the other shareholders at a price determined by a valuer. After valuation, the Board directed the other shareholders to purchase the appellant's shares at a specified price. However, the appellant did not receive any payment as per the Board's order. The High Court set aside the valuation due to bias and ordered revaluation as of a later date. It also held that the appellant is entitled to remuneration and perquisites until the date of share valuation. Dissatisfied with the High Court's order, both parties filed appeals before the Supreme Court. The appellant argued for a change in valuation date due to subsequent events, including the sale of company assets by the other shareholders. The respondents did not dispute the change in circumstances but attributed it to natural events and business decisions. The Supreme Court, considering the changed circumstances, set aside the previous orders and remanded the matter to the Board for fresh consideration, taking into account all events up to the present date. The appellant was permitted to raise the issue of salary and perquisites from a specific date before the Board. Both parties agreed to appear before the Board for further proceedings without additional notice, emphasizing the need for expeditious resolution of the matter. The Supreme Court allowed the appeals in part, leaving all contentions open for reconsideration by the Board.
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