9911796707
TMI Blog1993 (1) TMI 217X X X X Extracts X X X X X X X X Extracts X X X X ..... inadvisability of responding to the said offer. The presumption is that every person (including a public financial institution) knows his interest best and until the contrary is established, whether at interlocutory or final stage, orders of restraint may not be advisable. - CIVIL APPEAL NOS. 209-11 OF 1993 - - - Dated:- 21-1-1993 - LALIT MOHAN SHARMA, B.P. JEEVAN REDDY AND DR. A.S. ANAND, JJ. A.K. Sen, K.K. Venugopal, H.N. Salve, Kapil Sibal, Dr. A.M. Singhvi, R.K. Khanna, Ajay K. Jain and Pramod Dayal for the Appellant. P. Chidambaram, Ashoh Desai, Govinda Mukhoty, Ashok Mathur, A.K. Jhunjunwala, Jaideep Gupta, Krishan Kumar, Kailash Vasdev and Ms. Vinita Sawhney for the Respondent. JUDGMENT B.P. Jeevan Reddy, J. Heard counsel for the parties. Leave granted in all the three special leave petitions. The appellant, Assambrook Ltd. is a tea company owning certain tea estates in the country. Its case is that it acquired four tea gardens in Kerala for Rs. 8.15 crores in February, 1990. The amount of consideration was borrowed either from banks/public financial institutions or from certain private corporate bodies, it was necessary to raise funds ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the said person filed a writ petition in the Calcutta High Court on July 23, 1992, wherein a learned single judge made an interim order that the resolutions passed at the said extraordinary general meeting shall not be given effect to pending further orders ; (2) one Sunita Kumar filed a suit in the court of the District Judge, Alipore, along with an interlocutory application to stay the said extraordinary general meeting. Stay was refused. (An appeal preferred against the said order refusing stay was also dismissed ultimately by the Calcutta High Court on August 19, 1992) ; (3) a concern called Sonawalla Exports Ltd., claiming to be a shareholder of the appellant-company filed a suit on the original side of the Calcutta High Court (Suit No. 473 of 1992) along with an application for injunction restraining the holding of the said extraordinary general meeting. Injunction was refused. In other words, all the three attempts failed to stop the convening of the extraordinary general meeting on July 24, 1992. At the extraordinary general meeting of the appellant-company held on July 24, 1992, a special resolution was passed approving the rights offer of fully convertible debentures ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of these convertible debentures." The learned judge was of the opinion that a limited order to that extent should be passed so that the said issue can be finally disposed of on affidavits. The second point urged by the plaintiff before the learned judge was that the said offer was violative of the Companies (Acceptance of Deposits) Rules, 1975. The learned judge was of the opinion that the said point did not arise at that stage. The third contention of the plaintiff therein was that the said offer offends section 33(1)(b) of the Monopolies and Restrictive Trade Practices Act. The learned judge reserved the said argument for future decision. The learned judge noticed that though the suit was a representative suit, the shareholding of the plaintiff was only "1/200th of one per cent." Accordingly, the learned judge made the following order : "Under these circumstances there would be no order on this application at this stage except that in case any purchasers of these convertible debentures subscribe therefor along with a renunciation is being made, the company and the board of directors shall not use their/ discretion of rejection in such a case, but shall hold the matter until fur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that this court was closed for winter vacation from December 20, 1992, onwards and hence, the appellant had to move the learned vacation judge for orders.) The appellant-company says that because of the litigation and the publicity given to the orders of the court passed from time to time, there was no proper response to its offer. Accordingly, it extended the date of closure of issue up to January 21, 1993. The said extension was questioned by Krishen Kumar Kapoor by moving the Division Bench of the Calcutta High Court in the pending Letters Patent appeal. The Division Bench passed the following,, order, on. December 29, 1992 : "Let this matter come up in the list before the Regular Bench on January 8, 1993, as 'Application (New)'. In the meantime, there will be an ad interim injunction as prayed for. The appellant is directed to serve the respondents with the copy of this application and file an affidavit of service within January 8, 1993. Leave granted to have the petition affirmed, duly stamped and punched within January 5, 1993." Against this order, the appellant-company preferred S.L.P. No. 50 of 1993, in this court. On December 31, 1992, one Ashok Kumar Singh, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the said offer including affirmation of the direction made by A.N. Ray J. on December 16, 1992. At the same time, they requested that the appellant-company be permitted to make use of the monies received in response to the said offer and further that the date of closure of the offer may be extended by a reasonable period so as to enable the shareholders to respond properly to the said offer, untroubled by any further orders from any court in that behalf. On the other hand, learned counsel for the respondents, (Sri Krishen Kumar Kapoor and Sri Ashok Kumar Singh) submitted that the decisions taken at the extraordinary general meeting dated July 24, 1992, and the offer made by the appellant-company in pursuance thereof-are prejudicial to the interest of the shareholders including the financial institutions and that the raising of such a large amount by issuing zero-interest debentures is really conceived in the interest of other corporate bodies in whom the majority shareholders of this company are interested. It is submitted that the purchase of four tea estates was not a prudent measure inasmuch as the title of the vendors to all the four estates is under a cloud and litigation is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder passed by S.C. Agrawal, J. on December 25, 1992, in S.L.P. No. 17415 of 1992 subject to the following modification : The appellant-company is permitted to pay off the debts due to the banks and public financial institutions only from out of the monies raised by the said offer. So far as the repayment of the debts allegedly raised from certain other corporate bodies (referred to by the appellant as unsecured loans) are concerned, the question whether the money raised by the offer should be utilised for payment to the said corporate bodies or not shall be decided by the Calcutta High Court in the suit filed by Sri Krishen Kumar Kapoor. Since the appellant is complaining that it is being obliged to pay a substantial amount by way of interest on the amounts borrowed by it for acquiring the said estates, we think that it would be appropriate if the Calcutta High Court passes orders in this behalf as expeditiously as possible preferably within three weeks from today. For a period of three weeks, the direction made by S.C. Agrawal J. (on December 25, 1992) to the effect that the appellant-company shall not utilise the funds collected as a result of the issue of convertible debentures ..... X X X X Extracts X X X X X X X X Extracts X X X X
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