9911796707
TMI Blog2007 (6) TMI 291X X X X Extracts X X X X X X X X Extracts X X X X ..... 7 became academic. By order dated June 23, 1993, the company petition was dismissed on merits. Feeling aggrieved Hungerford preferred an appeal before the Division Bench of this court. During the pendency of the appeal Turner Morrison sent Hungerford's all 2,28,300 Turner Morrison shares to the Tax Recovery Officer of the Income-tax Department. In connection with certain proceedings for recovery of tax payable by Hungerford those shares were sold by the Income-tax Department by holding a public auction on May 27, 1994. In July, 1994, Turner Morrison filed an application in| Hungerford's appeal pending before the Division Bench for dismissal of the appeal on the ground that because of sale of all shares held by Hungerford in Turner Morrison, Hungerford was no longer entitled to proceed with the appeal. Feeling aggrieved by the order of the Tax Recovery Officer Hungerford preferred an appeal, which was allowed by the Commissioner of Appeals by his order dated November 14, 1994. The auction sale wad set aside and the Tax Recovery Officer was directed to proceed with the matter afresh. Consequently, three writ petitions were filed in this court. Hungerford filed Writ Petition No. 108 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g proceedings. There cannot further be any doubt whatsoever that any transaction made in respect of the shares in question, shall be subject to the ultimate result of the aforementioned appeal and in the event it is held that the auction sale was invalid, there cannot be any doubt whatsoever that the subsequent purchasers including the writ petitioner would not have right, title in respect of such share." Feeling aggrieved by the observations made in that order dated December 22, 1998, Turner Morrison and Times Construction preferred two appeals before the Division Bench of this court. During the pendency of those appeals the final order dated March 26, 1999, was made in Hunger-ford's appeal against the order dated June 23, 1993, dismissing the company petition. The appeal was allowed with the directions contained in the orders dated April 16, 1998, of the third judge and October 8, 1996, of Bijitendra Mohan Mitra, J. (as his Lordship then was), previously made in Hungerford's appeal. Feeling aggrieved, Turner Morrison filed a special leave petition, which was disposed of by their Lordships of the apex court by an order dated December 11, 2002. Their Lordships of the apex court h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had been disposed of by the apex court by an order dated December 11, 2002. All the four interlocutory applications were disposed of by order dated July 18, 2006, which is : "Learned counsel appearing for the parties seek to withdraw these interlocutory applications with liberty to move application before the company judge. The interlocutory applications are dismissed as withdrawn with liberty to the applicants)/appellants) to move application before the company judge. If such application is moved, the company judge shall dispose of the same in accordance with law". Thereupon, Turner Morrison took out the present application. The case was assigned to me, and when it was taken up for hearing counsel for Turner Morrison argued that in view of the order of the apex court dated July 18, 2006, the application dated August 18, 2006, taken out by Turner Morrison seeking an order dismissing the company petition should be heard first. On the other hand, Mr. Hoon presenting Hungerford's case argued that in view of the order of the apex court dated December 11, 2002, it would not be permissible to hear the application dated August 18, 2006, separating it from the company petition. His conte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n filed under section 397. According to counsel for Turner Morrison the company petition has lost its utility. Hungerford has filed opposition. It has denied that it ceased to be a shareholder of Turner Morrison. It has not said what relief can be given to it in the pending company petition by making order under section 397 of the Companies Act, 1956, if it is found that it ceased to be a shareholder of Turner Morrison. Its counsel has argued that the orders dated July 23, 1998, (allowing Times Construction's writ petition) and September 29, 2003, (allowing appeals of Turner Morrison and Times Construction against the order dated December 22, 1998) were obtained by practising fraud, and hence it cannot be said that shares held by Hungerford in Turner Morrison stood sold in auction held by the Income-tax Department on May 27, 1994. It has been submitted that fraud was exercised by Turner Morrison because the order dated July 23, 1998, was obtained suppressing the orders of the apex court dated July 9, 1988 and July 13, 1998. Counsel has argued that in view of the observations made in the Division Bench order dated October 8, 1996, that the certificate proceedings had not been init ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is nothing to show that the case of fraud practised by anyone was agitated before their Lordships of the apex court. When these facts were brought to the notice of counsel for Hungerford he argued that inaction on the part of Hungerford, if any, would not wipe out the fraud practised by Turner Morrison and its associates. In my view, there is absolutely no merit in the argument that orders were obtained by Turner Morrison and other parties from this court by practising fraud. Mr. Hoon excerpted certain observations from Lazarus Estates Ltd. v. Beasley [1956] 1 All ER 341 (CA), S.P. Chengalvaraya Naidu v. Jagannath [1994] 1 SCC 1 and Ram Chandra Singh v. Samtri Devi [2003] 8 SCC 319 andinvited me to apply them for holding that the sale is a nullity. In my opinion, he is inviting me to undertake an impermissible exercise. From the order dated September 29, 2003, it is clear that their Lordships of the Division Bench of this court held that the auction sale conducted by the Income-tax Department on May 27,1994, had attained finality in all senses and Hungerford's special leave petition against that order dated September 29, 2003, was summarily dismissed by the apex court on April 12 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder under section 397 of the Companies Act, 1956 In the company petition it complained that the issued land subscribed share capital of the company had been illegally increased, that the rights issue and allotment of three thousand shares of the company the to eleventh, twelfth thirteenth, fifteenth and twenty first respondents in the company petition were illegal and void that articles of association of the company had been wrongfully altered by taking a decision in the extraordinary general meeting of the company held on June 15, 1978 and that the annual general meeting held on July 13, 1983, in which decision was taken to change and increase the authorised capital of the company was illegal. The question is whether today an order granting relief to Hungerford under section 397 can be made for bringing those complained of matters to an end. For exercising the power it has be held that the complained of affairs of the company were conducted in a manner oppressive to Hungerford, and that winding up of Turner Morrison will unfairly prejudice Hungerford, but that otherwise on the facts an order should be made winding up Turner Morrison on the ground that it would be just and equit ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
