9911796707
TMI Blog1999 (3) TMI 493X X X X Extracts X X X X X X X X Extracts X X X X ..... registered under the provisions of the Act as a company limited by capital of equity shares. The company has its own memorandum and articles of association. As on 10-11-1998, the issued paid-up capital of the company was 22,50,000 divided into 1,50,000 issued capital of equity shares of Rs. 10 value and 7,500 preferential shares of the value of Rs. 100. Out of the total number of issued equity shares, the petitioner jointly with his wife Smt. Geeta Kharia was holding 25,000 shares worth Rs. 2.50 lakhs. However, on 18-12-1998 he received a notice dated 16-12-1998 issued by the opposite party No. 1 under the signature of its Managing Director (opposite party No. 2) informing him about holding of a meeting on 12-1-1999 for resolving with or without modification for enhancement of the paid-up capital of the company from Rs. 23,05,000 to Rs. 30,55,000 by issue of 75,000 equity shares of Rs. 10 each, at par. On receiving such notice he came to know for the first time that the number of equity shares of the company had been increased to 2,30,500 from 1,50,000 without any information to him. According to him, such increase or variation in the number of equity shares was illegal and in com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h shares was given to the Registrar of the Companies (opposite party No. 3) in due course and entered into the book. It has further been contended on behalf of opposite parties No. 1 and 2 that, as a matter of fact, Mr. D.P. Kharia, father of the present petitioner was a party to the decision taken by the Board of Directors on 10-10-1998, as he had acted as the chairman at the meeting. Therefore, it has been contended that the main petition barred by limitation having been filed much after 21 days from the date of allotment of the shares to Sanjay Jain. Therefore, the petition is fit to be dismissed. On the other hand, the learned counsel for the petitioner has submitted that the equity shares worth Rs. 8,05,000 were allotted to an outsider depriving him of his right to receive proportionate share therein in terms of section 81(1) of the Act. Therefore, it has materially varied and affected his right to manage the affairs of the company. In the reply to the counter affidavit, it has been stated that earlier the petitioner and other members of his family had 49 per cent of the total shares but by surreptitiously increasing the number of the equity shares and allotting the same to Sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to issue 80,500 equity shares in favour of one Sanjay Jain whose father, late B.K. Jain, had earlier advanced an unsecured loan to the company as one of its directors and pursuant to that resolution by their resolution dated 18-11-1998, the Board of Directors of the company allotted that much of equity shares in lieu of the unsecured loan of Rs. 8.5 lakh which the company owed to the father of the allottee. 5. The learned counsel for the petitioner has, however, urged that such allotment was contrary to the provisions of section 81. Sub-section (1) of section 81, no doubt, provides that if at any time after expiry of two years from the date of formation of the company or at any time after expiry of one year from allotment of shares in that company made for the first time after its formation, whichever is earlier, it is proposed to increase the subscribed capital of the company by allotment of further shares; such further shares shall be offered to the persons who at the date of the offer are holders of equity shares of the company in proportion to the capital paid-up on those shares on that date. However, sub-section (1A) of the said section permits allotment of further shares ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re allotted to Sanjay Jain in view of special resolution of the company, such resolution could not have been given effect to unless approved by the BIFR in view of the fact that the company was under rehabilitation scheme of the BIFR. My attention was drawn to clause ( b ) of sub-section (2) of section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 (SICA) according to which no resolution passed at any meeting of the shareholders of a company shall be given effect to unless approved by the BIFR when management of that company is taken over or changed in course of implementation of the sanctioned scheme for its rehabilitation. It is manifest that such rider is applicable only on resolutions of a company whose management is either taken over or changed under the scheme sanctioned by the BIFR under section 18 of the said Act. Sub-section (1) of section 18 enumerates the scheme/schemes which an operating agency appointed by the BIFR can prepare for sanction by the latter, and they include, inter dlia, ( a ) recon-struction, revival or rehabilitation of the sick industrial company, and ( b ) proper management of the sick industrial company by change in, or take-o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dge thereof to him. It has been contended that simply because his father was the chairman at the meeting of the Board of Directors held on 10-10-1998 and resides with him in the same building, no knowledge of such transaction can be imputed to him. Thereby the petitioner purports to say that he had nothing to do with the affairs of his father and vice versa. However, in paragraph 10, he has tried to claim majority of paid-up issued shares prior to the increase and allotment of 18-11 -1998 on the ground that he and other members of his family held 49 per cent of the shares issued prior to 10-11-1998. The very fact that he has tried to club his interest with the interest of other members of his family shows that all the members of his family including, the petitioner and his father are hand in glove and the present petition has been filed only with a view to obstruct raising of further capital as proposed by the Board of Directors as per notice dated 16-12-1998 in view of the decision taken at a joint meeting of the managing director of the B.S.F.C. the Director of Industries, Government of Bihar, and others on 3-12-1998 for consideration of the rehabilitation package in terms of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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