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TMI Blog2008 (11) TMI 742X X X X Extracts X X X X X X X X Extracts X X X X ..... e to pay its dues to the secured creditors. While so, in order to settle dues to its secured creditors and company being public limited is governed by the provisions of Section 293(1)(a) of the Act and in order to comply with the provisions of the said section, called for an extraordinary general meeting or June 5, 2008 and passed resolutions enabling the company to sell or otherwise deal with the said property. 3. The said secured creditors by virtue of being holders of secured debentures/provider of working capital limits respectively have initiated legal proceedings to sell the property and to adjust the sale proceeds against the secured debt. In order to protect the interests of the company and as there is no other alternate except to sell the property of the company to the interested buyers rather than selling the same through an open auction it has been resolved in the extraordinary general meeting held on June 5, 2008, to sell the property of the company and thereby the company would settle the dues of its secured creditors. 4. He further submitted that in the extraordinary general meeting held on June 5, 2008, the total members present are 33 and those voted in favour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eholders. 7. Dr. K.S. Ravichandran, learned practising company secretary and authorised representative for respondents Nos. 1 to 12 herein filed detailed counter and submitted that the Company Law Board has no power to permit sale of any property of the company. Since regulation 17 of the Company Law Board Regulations, 1991 speaks about filing interlocutory applications for seeking interim relief but at the same time the principles of natural justice will apply to the proceedings before the Company Law Board under what circumstances the interim relief can be granted. Unless the applicants show that there exists a prima facie case and balance of convenience is in their favour the application cannot be considered for grant of interim relief. In this case, the applicant has not made out any justifiable cause seeking interim relief. Further he submitted that under Section 403 of the Act, the Bench cannot grant the interim relief sought by the applicants pending disposal of the main company petition. In this context he relied upon the decision of the High Court of Madras in (i) G. Kasturi v. N.Murali [1992] 74 Comp Cas 661 MAD and (ii) Gujarat Bottling Co. Ltd. v. Coca Cola Co. [1995 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anti Prasad Jain v. Kalinga Tubes Ltd. [1965] 35 Comp Cas 351 : AIR 1965 SC 1535, to show (page 365) : Although the word 'oppressive' is not defined, it is possible, by way of illustration, to figure a situation in which majority shareholders, by an abuse of their predominant voting power, are 'treating the company and its affairs as if they were their own property to the prejudice of the minority shareholders . He further submitted that the respondents/petitioners technical know-how is in depth since petitioner No. 1, being a mechanical engineer and because of his endeavour and services raised itself to one of the leading quality manufacturers of LPG cylinders in India and in international market. He further submitted that the belief of the applicant that the property would not fetch proper value in a public auction sale is totally baseless, the market value of the property can be properly ascertained only when the people come to know the availability of the property. In this regard he relied upon the judgment of the Supreme Court in Chairman and Managing Director, Sipcot v. Contromix P. Ltd. [1995] 84 Comp Cas 110 SC, held that (page 116) : Public auction after adeq ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lemented without the leave of this Bench. Further in Vivek Goenka v. Manoj Sonthalia [1995] 83 Comp Cas 897 (Mad), wherein the court held that (page 908); it will not be open to this Court to interfere with the day-to-day functions, management and administration of a company unless it is established that the decisions taken by the board are ultra vires the Act or the articles of association of the company . After perusal of the documents and pleadings, I do not find any illegality in conducting extraordinary general meeting and its resolution as held by the Madras High Court, this Bench will not interfere in the day-to-day functions, management and administration of the company. This Bench in Vijayawada Share Brokers Ltd. v. D. Ramkishore [2004] 120 Comp Cas 125 , is of the view that wisdom of the shareholders is supreme and their decision to sell the land of the company cannot be interfered with. The above decision is squarely applicable to the facts of the present case. Though the respondents deny all the averments made by the applicant, however in their counter at paragraph 30 they stated that the market value of the property can be properly ascertained only when the people cam ..... X X X X Extracts X X X X X X X X Extracts X X X X
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