9911796707
TMI Blog1983 (4) TMI 213X X X X Extracts X X X X X X X X Extracts X X X X ..... H. K. Somani (Died on 4-5-77) =Smt. Ratan Devi Somani (Died on 24-3-1978) R. K. Somani (O. P. No. 2) =Smt. Phool-lata Somani (O. P. No. 5) S. K. Somani =Smt. Saroj Somani N. K. Somani =Smt. Premlata Somani M. K. Somani D. K. Somani (Petitioner) =Smt. Saroj Somani K. K. Somani (O. P. No. 3) Smt. Pushpa Somani D. K. Somani, petitioner, gave an application under section 155 of the Companies Act, 1956 (to be referred hereafter as "the Act"), for the rectifition of the register of opposite party No. 1, Somani Steels Ltd. The application was contested by opposite parties Nos. 1, 2, 3 and 5. The dispute is between the families of two brothers, R. K. Somani and D. K. Somani. The grievance of the petitioner is that he has been ousted from the board of directors and the opposite parties want to fraudulently usurp the management and control of Somani Steels Ltd. for their own ends. The petitioner's case is that opposite parties Nos. 2 and 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting was held in 1973-74, that they were restrained from acting as directors by the Alipore Court, that they did not disclose their interest as required in section 299 of the Act, that only the late H.K. Somani could be said to have attended the meeting as a director in the eye of law, that the quorum was not complete, that no valid resolution approving transfer in favour of opposite party No. 3, K. K. Somani, could be passed, that in fact no resolution was passed and the minutes of the meeting were fabricated and ante-dated, that the transfer was without any consideration and that there was no necessity for the same. The contesting opposite parties refuted these allegations and affirmed that a meeting of the board of directors was actually held on September 15, 1971, that three directors attended the meeting, that a resolution was duly passed, that transfer was made for valuable consideration, that the shares were entered in the register on October 4, 1975, and that the appointment of administrators was made on September 26, 1975, while much before the formalities of transfer were completed. It is also affirmed that opposite parties Nos. 2 and 5 were duly elected directors and w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ratan Devi Somani. The petitioner is entitled to succeed to his mother. The opposite parties' case is that Smt. Ratan Devi Somani had 21,000 shares. On December 10, 1974, she transferred these shares in favour of herself, her husband, H. K. Somani, her son, opposite party No. 2, R. K. Somani, and her grandson, opposite party No. 3, K. K. Somani. Annexure CA-17 is the copy of the transfer deed dated December 10, 1974. H. K. Somani died on May 4, 1977, and his grandson, opposite party No. 3, K. K. Somani, in pursuance of will dated December 4, 1975 ( sic ) . On February 3, 1978, Smt. Ratan Devi Somani, opposite party No. 2, R. K. Somani and opposite party No. 3, K. K. Somani (after the death of H. K. Somani), transferred these shares in favour of opposite parties Nos. 2 and 3, R. K. Somani and K. K. Somani. Annexure CA-18 is the copy of the transfer deed. The case of the opposite parties is that the transfers have been validly made and there is no basis for the imputation made by the petitioner. It is also said that the petitioner retired in due course in 1975, and he was not ousted. The above is the background in which the petitioner gave the application under section 155 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ength. Our attention has also been drawn to the various affidavits and annexures filed along with the same. Section 155 of the Act provides as below: "155. Power of court to rectify register of members. (1) If ( a )the name of any person ( i )is without sufficient cause, entered in the register of members of a company, or ( ii )after having been entered in the register is, without sufficient cause, omitted therefrom; or ( b )default is made, or unnecessary delay takes place in entering on the register the fact of any person having become, or ceased to be, a member: the person aggrieved, or any member of the company, or the company, may apply to the court for rectification of the register. (2) The court may either reject the application or order rectification of the register; and in the latter case, may direct the company to pay the damages, if any, sustained by any party aggrieved. In either case, the court in its discretion may make such order as to costs as it thinks fit. (3) On an application under this section, the court ( a )may decide any question relating to the title of any person who is a party to the application to have his name entered in or omit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prejudice the final determination of these points. We deem it proper to decide the question of temporary injunction on the assumption that the petition is maintainable and within time. The learned single judge has referred to the various provisions of the Companies Act, 1956, and has held that the court has supervisory jurisdiction. He held: "In this view of the matter, if certain blocks of shares are likely to affect the management of the company which would ultimately affect a large number of shareholders, then, in my opinion, it would be appropriate that the matter may be decided expeditiously by the High Court instead of relegating the parties to a civil suit which is likely to take years for decision. It is, therefore, a relevant circumstance for the exercise of the discretion by the court for entertaining a petition." We are unable to agree with the learned single judge on the supervisory jurisdiction of this court. The provisions referred to by him are specific provisions for specific situations. The court has no power beyond the scope of these provisions. The supervisory jurisdiction of the court is provided for in articles 226 and 227 of the Constitution. The court c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d counsel is well-founded. The object of the interlocutory injunction is to protect the plaintiff against the injury by violation of his right for which he could not be compensated in damages. The plaintiff's need for which protection is required is to be weighed against the corresponding need of the defendant. The court must weigh one's need against another and determine where the "balance of convenience" lies. We are, however, unable to agree with the learned single judge that the balance of convenience lies in favour of the petitioner. The petitioner has neither made any averment nor proved that he would suffer irreparble injury if the temporary injunction is refused. The learned single judge has not considered the circumstances that the petitioner has come to the court after almost seven years. The contesting opposite parties Nos. 2, 3 and 5 have been exercising voting rights during all this period. It has not been shown as to how would the petitioners suffer if the opposite parties continue to exercise voting rights during the pendency of this petition also. We consider it highly inequitable to deprive the opposite parties of their voting rights which they have been exerci ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
