9911796707
TMI Blog2004 (3) TMI 429X X X X Extracts X X X X X X X X Extracts X X X X ..... ing for stay of the operation of the order dated 4-4-2000. This Court while admitting the appeal by the order dated 5-5-2000 directed the parties to maintain status-quo. 2. Company Appeal No. 2 of 2001 has been filed by the Company challenging the order dated 29-11-2001 passed by the Company Law Board in C.P. No. 113 of 2000. This Court while admitting the appeal by the order dated 20-12-2001 stayed the operation of the aforesaid order as well as further proceedings in C.P. No. 113 of 2000. In this petition, the respondents of Company Appeal No. 2 of 2000 claimed control over the majority voting powers in the Company. Other issues raised in this petition [C.P.No. 113 of 2000] relate to sale and transfer of 2000 shares held by the Company in M/s. Surma Valley Stock Limited and increase in the paid-up capital of the Company by unpaid amount on the 400 shares held by M/s. Surma Valley Stock Limited. The learned Board held that the sale and transfer of 2000 shares had been done allegedly only to increase the voting power, and not for any bona fide purpose. 3. Company Petition No. 8 of 1998 was filed under sections 397 and 398 of the Companies Act, 1956 complaining of control of the C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ansfer of 2000 shares held by the Company in one M/s. Surma Valley Stock Limited and increase in the paid-up capital of the Company by accepting unpaid amount on the 400 shares held by M/s. Surma Valley Stock Limited in the Company. Additional prayer was incorporated for appropriate direction for handing over the assets and properties of the Company to the Board consisting of the petitioners' group as Directors in terms of the order dated 4-4-2000 of the Company Law Board. After hearing the parties, the Company Law Board in the impugned order dated 29-11-2001 observed as follows :-- "(i)Therefore, it is a fit case wherein the sale of 2000 shares to the 7 persons should be cancelled and the shares restored in the name of the company. (ii)As far as the paid up value of 400 shares in Surma is concerned since we have found that the same had been done only to increase the voting power and not for any bona fide purposes, the company will not allow voting on the shares beyond Rs. 10 per share till the disposal of the appeal before the Guwahati High Court, where-after, the Board of the company will take a decision either to retain the paid up value at Rs. 50 or reduce it to Rs. 10 after ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndents) is accepted in view of the total value of votes polled in favour of the respondents. Shri Chouhdury further submitted that the Directors having been elected in the EOGM dated 29-11-1999 have been continuing in office on the strength of the interim order dated 5-5-2000 passed in Company Appeal No. 2 of 2000 and all of them by now would have retired by rotation by operation of law. Therefore, the order dated 4-4-2000 passed by the Company Law Board has become infractuous and consequently not capable of implementation. Shri Choudhury forcefully argued that only possible outcome of the instant litigation would be appropriate direction for holding of fresh election of the Directors as per provisions of law. Shri Choudhury submitted that the appellant Company may be given the liberty to discharge its statutory functions as per sections 166 and 167 of the Act of 1956 by immediately conveying the Annual General Meeting in the interest of the Company as well as shareholders. 6. Mr. S. Banerjee, learned senior counsel challenged the maintainability of the appeals on the ground that section 10F of the Companies Act, 1956 provide for appeal only on question of law and that no question ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pany Law Board appears to have had no option but to draw adverse inference since the appellants failed to produce the relevant documents before the Board. Consequently, the Board had exercised discretion. That apart, the Board found the element of mismanagement in sale of shares held by the Company in M/s. Surma Valley Stock Limited. No attempt was made by the appellant before the Board to justify the sale of shares. Even, the details of the sale and the consideration received on such sale were not disclosed. According to the Board, the aforesaid sale was affected by the appellants in order to gain control over the Company. It is under these circumstances, the Company Law Board came to the conclusion that the effective votes available in the EOGM, dated 29-11-1999 was 41,830 and not 48,480 and, therefore, the respondents having secured 23,740 votes were entitled to be declared as elected. It is in these backdrop, the Board directed the Board of Directors of the Company to hand over the Board to the respondent Group. The decisions of the Company Law Board narrated in brief above are based on consideration of factual details made available by the parties. This Court in the given circ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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