Petitioner's Application Dismissed for Lack of Fraud Proof

The court dismissed the application, ruling that there was no proven fraud due to non-disclosure of pending litigations by the petitioner during shareholder meetings. The court found that the transfer of shares did not violate any interim orders as it occurred before the relevant injunction date. The application was deemed misconceived and lacking merit, leading to its dismissal.

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Issues Involved:
1. Non-disclosure of material facts and alleged fraud by the petitioner.
2. Violation of interim orders in the sanction and transfer of shareholdings.

Detailed Analysis:

1. Non-disclosure of Material Facts and Alleged Fraud by the Petitioner:
The objector claimed that the petitioner did not disclose all material facts and committed fraud on the court. Specifically, it was argued that the petitioner failed to inform the shareholders about the ongoing litigations in various courts during the meetings held to approve the scheme of arrangement. The court examined whether the petitioner was obligated to disclose these litigations and whether the non-disclosure amounted to fraud. It was noted that the objector's representative was present at the meeting where the resolution for the transfer of shares was accepted, indicating acquiescence. The court referenced several precedents, including the Supreme Court's decision in S.P. Chengalvarya Naidu v. Jagannath, which states that a judgment obtained by fraud is a nullity. However, the court concluded that no proven fraud was established in this case. The non-disclosure of pending litigations was not considered material enough to mislead the shareholders, as per the judgments in Tata Oil Mills Co. Ltd., In re and United Bank of India Ltd. v. United India Credit & Development Co. Ltd. The court emphasized that the scheme was approved by the required majority of shareholders who were fully aware of the pending litigations.

2. Violation of Interim Orders in the Sanction and Transfer of Shareholdings:
The objector argued that the petitioner violated interim injunction orders by transferring shares. The court reviewed the timeline of events and the specific orders issued by various courts. It was found that the transfer of shares to Bharti was made on August 7, 2000, which was before the relevant injunction order dated August 24, 2000. The Division Bench in FAO 346/2000 had ordered the maintenance of the status quo as of August 24, 2000. Since the share transfer occurred before this date, it was not in violation of the court's injunction. Additionally, no application alleging violation of any interim injunction was moved by the objector until the present application was filed. The court concluded that the decision to sanction the scheme of arrangement and the transfer of shares was not in violation of any interim orders.

Conclusion:
The court held that the application filed by the objector was misconceived and without merit. It was determined that there was no non-disclosure of material facts amounting to fraud, and the transfer of shares was not in violation of any interim court orders. Consequently, the application was dismissed.

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