9911796707
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Issues:
Contributory winding up petition under just and equitable clause - Substratum of the company - Majority shareholders opposed to winding up - Allegations of mismanagement and loss - Resolution to sell assets - Power of board to sell assets - Bona fide nature of the petition - Abuse of court process. Analysis: The judgment pertains to a contributory winding up petition filed under the just and equitable clause, alleging that the substratum of the company is gone. The petitioner, one of the six members of the private limited company, sought winding up, but faced opposition from the majority shareholders. The court highlighted the uphill task for a contributory under the just and equitable clause, emphasizing the statutory provisions allowing members to decide on voluntary liquidation or seek a compulsory winding up order. The petitioner needed strong grounds to succeed, especially when the majority shareholders were against winding up. The court examined the allegations in the petition, which cited differences in management, financial losses, and a proposal to voluntarily wind up the company. It noted that even if the allegations were true, they did not warrant a winding up order. The company's decision to sell assets at a general meeting did not necessarily indicate a desire for winding up, as the members could change their minds and continue the business. The court emphasized that the company could still operate its remaining undertakings and explore new ventures, indicating that the substratum had not disappeared. Regarding the power to sell assets, the court clarified that the board, not the general meeting, had the authority to decide on asset sales. Even if a resolution was passed to sell assets, the board was not obligated to comply if it deemed it against the company's interests. The judgment referenced legal precedents supporting the board's autonomy in asset sale decisions, emphasizing the board's discretion in such matters. The court also questioned the bona fide nature of the petition, noting that the petitioner's refusal of an offer to buy shares at twice their face value suggested ulterior motives. The rejection of the offer and subsequent demand for a higher price indicated an attempt to gain control over the company by pressuring other members. The court deemed the petition an abuse of the court process and dismissed it with costs, lifting the injunction previously granted.
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