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TMI Blog2001 (3) TMI 931X X X X Extracts X X X X X X X X Extracts X X X X ..... inated cannot bring his grievance as to termination to winding up the company for that single and isolated act, even if it was doing good business and even if the director would obtain each and every adequate relief in a suit in a court. Thus no good reason to interfere with such an order - SPECIAL LEAVE PETITION (C) NO. 17137 OF 2000 - - - Dated:- 27-3-2001 - S. RAJENDRA BABU AND K.G. BALAKRISHNAN, JJ. Jaideep Gupta and Praveen Kumar for the Petitioner. A.K. Ganguli, Somnath Mukherjee, Dhruv Agrawal and Goodwill Indeevar for the Respondent. JUDGMENT Rajendra Babu, J. - A petition under sections 397 and 398 of the Companies Act, 1956 ( the Act ) was filed before the Calcutta High Court on grounds of oppression ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... special leave petition is filed. 2. Relying upon the decision in Needle Industries (India) Ltd. v. Needle Industries Newey (India) Holding Ltd. [1981] 51 Comp. Cas. 743 ; it is claimed that even if a case of oppression is not made out by the petitioners, the court is not powerless under section 397 to do substantial justice between the parties and, therefore, on the facts available in the case the order made by the learned company judge should have been maintained. It is pleaded that it is not possible for the petitioners and respondents to carry on business of the company together and the only solution is that one group of shareholders should purchase the shares of the other group and that the petitioners have no objection in selli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unds for winding up and an order for winding up would be unjust and unfair to them. On these tests, the Division Bench examined the matter before it. 4. It was noticed that the shareholding of the petitioners is well under 20 per cent while that of those opposing the winding up is more than 80 per cent. Therefore, the adversary group has sufficient majority shareholding even to pass a special resolution. 5. The grievances made by the petitioners before the Division Bench of the High Court are as follows : (1) That the registered office of the company was shifted from the congested Posta area to the multi-storeyed building called Chatterjee Polk on Jawaharlal Nehru Road, and then again shifted back from there. (2) That a certain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al position and reached a conclusion that the company petition is liable to be rejected on the ground that there is no finding by the learned company judge that the winding up will unjustly prejudice the company, therefore, the order of the nature appealed against had been passed and also concluded that it is impossible for them to arrive at a finding in favour of the petitioners. So far as shifting of the registered office from Posta area to Chatterjee Polk and back to Posta is concerned, the Division Bench was of the view that shifting of the registered office by itself may not be a reason or a ground to be raised in a petition under section 397 or 398 of the Act as long as the company did not suffer much loss on account of the shifting a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... company does not have to pay the petitioner No. 1. During the course of the proceedings in this matter, petitioner No. 1 filed a separate company petition for winding up against another sister concern, Bagri Synthetics Ltd. However, a suit was ordered to be filed and a sum of Rs. 5,74,662 was directed to be deposited. Thereafter, the suit was decreed by a judgment which was upheld by the appellate court and, therefore, it was held that if a debt remained owing to petitioner No. 1 from the company it would be unreasonable for petitioner No. 1 to ask for a just and equitable winding up of the company; on the other hand filing a suit would be proper as it had been done in the other case and, therefore, did not enter into further details of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Companies on 15-1-1988, showing that the petitioner No. 1 had ceased to be a director with effect from 21-12-1987, and since then it is maintained throughout that the petitioner No. 1 ceased to be in the office of the director of the company. The Division Bench noticed that the position that petitioner No. 1 ceased to be a director is seriously disputed and the Division Bench ultimately concluded that the termination of directorship would not entitle such person to ask for winding up on just and equitable grounds inasmuch as there is an appropriate remedy by way of company suit which can give him full relief if such action had been taken by the company on inadequate ground. The Division Bench found that if a director even if illegally term ..... X X X X Extracts X X X X X X X X Extracts X X X X
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