Shareholder standing and RBI permission upheld where statutory allotment decision affected control structure and no res judicata applied.

A shareholder could maintain the writ petition in his individual capacity where the RBI permission directly affected his proprietary interest and the company's control structure, so the company's withdrawal did not extinguish his separate grievance. The Court upheld the RBI's permission for allotment of shares against imported second-hand equipment on a non-repatriation basis, holding that the decision was made within statutory jurisdiction, on relevant material, after hearing the parties, and without perversity or breach of natural justice. The challenge was also not barred by res judicata or issue estoppel because the earlier company proceedings had not finally decided the validity of the specific RBI permission.

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Issues: (i) Whether the sole remaining shareholder could continue the writ petition after the company withdrew from the proceeding; (ii) whether the RBI's permission for allotment of shares against imported second-hand equipment on non-repatriation basis was illegal or contrary to the applicable policy and statutory framework; (iii) whether the challenge was barred by res judicata or issue estoppel in view of the earlier company law proceedings.

Issue (i): Whether the sole remaining shareholder could continue the writ petition after the company withdrew from the proceeding.

Analysis: The dispute concerned an RBI permission that directly affected the shareholding pattern and control of the company. The withdrawal by the company did not, by itself, extinguish the individual grievance of the shareholder, where the impugned decision was said to cause distinct injury to his proprietary and corporate interest. Judicial review under Article 226 is available in appropriate cases where statutory action affects individual rights, even if the company is also affected.

Conclusion: The shareholder was held entitled to maintain the writ petition in his individual capacity.

Issue (ii): Whether the RBI's permission for allotment of shares against imported second-hand equipment on non-repatriation basis was illegal or contrary to the applicable policy and statutory framework.

Analysis: The RBI acted under its statutory power under FERA and relied on the Government's policy directive that direct payment by an NRI against import of second-hand capital goods supported only non-repatriable investment. The Court held that the SIA approval and foreign investment policy did not govern the changed mode of investment adopted in the transaction. The decision was taken on relevant material, after hearing the parties, and no perversity, lack of jurisdiction, or violation of natural justice was established. In judicial review, the Court would not sit in appeal over a reasoned statutory decision taken within jurisdiction.

Conclusion: The RBI permission was upheld and the challenge to it was rejected.

Issue (iii): Whether the challenge was barred by res judicata or issue estoppel in view of the earlier company law proceedings.

Analysis: The earlier company law proceedings did not adjudicate the validity of the specific RBI permission for issuance of 30,55,329 shares against the imported equipment. The pending writ petition had been expressly noticed in the earlier proceedings, and no final finding on the impugned RBI permission had been rendered there. Therefore, the necessary elements of res judicata or issue estoppel were absent.

Conclusion: The objection based on res judicata or issue estoppel was rejected.

Final Conclusion: The intra-court appeal failed, the judgment under challenge was affirmed, and the writ petition challenge to the RBI permission did not succeed.

Ratio Decidendi: A shareholder may maintain a writ petition where a statutory order directly affects his individual rights and the company's control structure, but the Court will not interfere with a reasoned statutory permission granted within jurisdiction and in accordance with the applicable policy, absent perversity, mala fide, or violation of natural justice.

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