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TMI Blog1995 (11) TMI 372X X X X Extracts X X X X X X X X Extracts X X X X ..... Act. 2. Looking to the background of this case, I deem it appropriate to set out the prayers of the petition filed by the petitioner. "It is, therefore, prayed that this Court may be pleased to : ( a )pass such order or orders as may be necessary for relieving the petitioners of the oppressive activities of the respondent, S.P. Seth group and the respondent-company of the prejudicial activities of the said group. ( b )set aside all allotments of shares made in favour of the S.P. Seth group which exceeds 30 per cent of the share capital which was originally held by them and they be directed to transfer the remaining shares to the petitioners and their nominees against payment on the basis of the face value of the shares. ( c )th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... leging that the shares held by the petitioners do not constitute 10 per cent capital of the company and the petitioners cannot rely upon the shareholding of any other person as they have not obtained the consent, in writing, of any such person nor have they filed any schedule as required by the rules. The company has prayed in this application that the petition is incomplete and is liable to be dismissed as the petitioners do not fulfil the qualification required for maintaining a petition under section 399 of the Act. On 10-12-1991, counsel for the petitioner made a statement that he did not wish to file a reply to the application. The application came up for disposal before Y.K. Sabharwal, J. on 2-2-1993. 4. Sabharwal, J. in his said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that the petition for winding up would continue. 6. The petitioner aggrieved by the order of the learned Single Judge filed a company appeal before the Division Bench, which was dismissed on 18-3-1993. Thereafter, the petitioner moved an application C.A. No. 562 of 1994 Prem Seth v. National Industrial Corpn. Ltd. [1999] 96 Comp. Cas. 575 (Delhi), with the prayer that the respondent be restrained from issuing 20,05,000 rights shares. While dismissing the application, the Court observed that : "...there is no mala fide act on the part of the company in trying to raise the funds by issuance of the rights shares in question. The mere fact that the company had earlier tried to raise funds by issuance of rights shares in 1993, does ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r sections 397 and 398. P.K. Bahri, J., who had disposed of C.A. No. 562 of 1994 Prem Seth s case ( supra ) (in which it is prayed by the petitioner that the respondent be restrained from issuing 20,05,000 shares), arrived at the conclusion that there are no mala fides on the part of the company in trying to raise funds by issuance of rights shares of the company. 9. According to the conclusion arrived at by Bahri, J., the company is doing well and any coercive method used against the company shall prove counter-productive. 10. Mr. Khanna, the learned counsel for the petitioner also submitted that in a petition for winding up, the Court can grant any relief. Mr. Khanna placed reliance on National Conduits (P.) Ltd. v. S.S. Ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Cas. 91 (SC). 15. In this case, their Lordships of the Supreme Court have held that relief under section 433( f ), based on the just and equitable clause is in the nature of a last resort when other remedies are not efficacious enough to protect the general interests of the company. It is not a proper principle to encourage hasty petitions for winding up of the company without first attempting to sort out the dispute and controversy between the members in the domestic forum in conformity with the articles of association. There must be materials to show when the just and equitable clause is invoked that it is just and equitable not only to the person applying for winding up but also to the company and all its shareholders. The Compan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble to do so, it would be the bounden duty of the petitioners to disclose the material facts as to the alternative remedies which they have availed of or which are available to them. It is only this disclosure which would enable the court to exercise its discretion under section 443(2) and when such a petition is presented on this ground under section 433( f ), to make up its mind as to whether the other remedy is available to the petitioners and they are acting unreasonably in seeking to have the company wound up instead of pursuing that other remedy." (p. 360) 18. He also placed reliance on Jose, J. Kadavil v. Malabar Industrial Co. Ltd. [1986] 59 Comp. Cas. 969 (Ker.). When the petitioner has an alternative remedy, in this case, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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