TaxTMI 
TaxTMI 
1998 (12) TMI 486
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....thereof are being conducted in a manner oppressive to some members of the company. Be it noted that isolated act of indiscipline or indifference or even deprivation by itself would not bring home the charge of oppression-there shall have to be a continuity of a burden- some, harsh and wrongful conduct. As a matter of fact, the conduct of the oppressor towards oppressed shall have to be such so as to evince an existing element of absence of fair dealing or lack of probity. The observations of the Supreme Court in the case of Shanti Prasad Jain v. Kalinga Tubes AIR 1965 SC 1535 lends support to the above. The discretion spoken of earlier and as is available within the meaning of the statute, however, knows no fetters by reason of specific language used, to wit, 'make such order as it thinks fit', by the law makers in section 397. Before proceeding further, it would, however, be convenient to advert briefly to the factual matrix of the matter under consideration. 2. The Deccan Enterprises P. Ltd., being the respondent-company, was incorporated under the provisions of the Act on 15-4-1966 with the registered office at Secunderabad. The authorised capital of the company was Rupees Ten....
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....s required for the purpose. Mr. Mukherjee contended that the third respondent being one of the five brothers, including the ninth and seventh respondents, has in fact taken all necessary steps to promote the company, though, however, the signature of Shri O.P. Jalan is significantly absent in the articles and memorandum of association. As an explanation thereto Mr. Mukherjee contended that during February, 1966, the marriage of Shri O.P. Jalan was fixed at Calcutta and as such he was required to go to Calcutta. But, since the printer could not deliver the printed copy of memorandum and articles of association before Shri O.P. Jalan left for Calcutta and in order to avoid any delay in the incorporation of the company, Shri R.N. Jalan, being the elder brother of Shri O.P. Jalan, was requested to sign the memorandum of association along with Shri R. Khemka, who was working as a deputy to Shri R.N. Jalan. Be it noted that while deposing Shri O.P. Jalan in no uncertain terms stated that even before the incorporation of the company, he had applied to the Directorate of Industries for allotment of land in a private industrial estate at Balanagar in his personal name and got two plots allo....
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....mily O.P. Jalan 1100 1465 3515 3515 7080 Sudha Jalan 867 1157 2577 2577 5154 K. Jalan - - 25 825 1650 V. Jalan - - 25 25 50 1967 2622 5142 6942 13934 (26.23 per cent) (26.22 per cent) (24.57 per cent) (27.77 per cent) (27.87 per cent) S.K. Jalan & Family S.K. Jalan 1100 1465 3665 2865 5730 A.D. Jalan - - 355 355 710 1100 1465 4020 3220 6440 (14.67 percent) (14.65 per cent) (16.08 per cent) (12.88 per cent) (12.88 per cent) Miscellaneous - - 500 500 925 (2.00 per cent) (2.00 per cent) (1.85 per cent) Total 7500 10000 25000 25000 50000 (100 per cent) (100 per cent) (100 per cent) (100 per cent) (100 per cent) 4. It is to be noted that Shri R. Khemka and Shri R.N. Jalan were the Directors since its inception and the appellants' principal contention is that the understa....
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....t being retained in the hands of Shri O.P. Jalan culminating, however, in filing of the petition under section 397. 6. The learned single Judge, in spite of the matter being rather voluminous, has dealt with the same and scrutinised every minor detail. In his order, the learned Judge did record the reliefs claimed in the company petition and we set out the same in seriatim: "i.Declare the induction of the Respondent No. 7 as additional Director on to the Board purported to have been made at the Board meeting held on 15-1-1987 as void and illegal and injunct the said respondent No. 7 from exercising any power or authority as a director of the Respondent No. 1 company. ii.Declare that there were no annual general Meetings held on 18-12-1985 or 18-10-1986 and the Board Meeting held on 9-11-1985, 11-11-1985 and 20-8-1986, 20-9-1986, if there were any such meet-ing or meetings and that each of the said meetings are illegal and the resolutions if any passed thereat are void and inoperative. iii.Declare that the purported allotment o! further/fresh shares in the year 1985 or 1986 if any, by the Board of the respondent No. 1 is void, illegal and to injunct the respondent Nos. 2 and 3 a....
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....ions of the Act and the articles of association of the respondent No. 1 Company." Before proceeding further, one redeeming feature transpired during the course of hearing before the Appellate Court that the issue is not between Khemkas and Jalans but the issue is between Khemkas together with Shri R.N. Jalan, being the elder brother of Shri O.P. Jalan on one side, and the other Jalans on the other, including Shri Shubhkaran Jalan, being the father of Shri R.N. Jalan and O.P. Jalan. 7. At this juncture it would be convenient to note that during the course of hearing before the learned single Judge, voluminous documents and oral evidence were pressed into service in support of the respective contentions of the parties and the learned single Judge, as noted above, did take very great pain in elaborating the same with great lucidity and since the matter has been dealt with in the manner as it has been, we refrain ourselves from dealing with the same once again in this judgment on the factual score excepting the essentiality, more so by reason of the stage of the proceeding as at present. 8. Be it noted that the learned single Judge after considering the respective pleadings initiall....
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....t, equitable and necessary to be ordered by the Court in the circumstances of the case?" It is on this score, however, that certain other factual details as has been recorded by the learned single Judge ought to be noted herein. The learned Judge recorded the following: "... However, the issues were reduced in subsequent proceedings when certain appeals were filed against Interlocutory orders. The Division Bench in OSA SR. No.24892/94 on the basis of the submissions made by the learned Counsel for the petitioner observed as follows: "Mr. K. Srinivasa Murthy, learned Counsel for the petitioners in Company Petition No.27 of 1987, has stated that the only issue, if at all the same can be called an issue, to be decided in the proceeding is - 'whether there are any acts of oppression of the minority shareholders of the company by any other group of shareholders or majority shareholders' - and relevant to the above is the issue - 'whether petitioner-R. Khemka and ninth respondent and/or any other person on their behalf, as alleged by the third respondent, consented to the allotment of additional shares to several other persons and if they have not consented to the above, whether allot....
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....ner of doubt as regards the user and adaptation of unfair means and conduct of the business of the company in a manner prejudicial to the interest of Khemka group. Two of the letters dated 25-3-1985 and 30-4-1985 were taken recourse to by Mr. Sarkar in support of his contention. It is on this count, however, that Shri R.N. Jalan also joins the appellant/ petitioner in the matter of lodgement of a complaint as regards receipt of notices of the Board Meetings for the year 1984-85. For convenience sake, the letter dated 25-3-1985 from R. Khemka to Shri O.P. Jalan, being the Managing Director of Deccan Enterprises P. Ltd., and being Exhibit. A-21 is set out herein below: "The Managing Director, Deccan Enterprises Pvt. Ltd., I am surprised to learn that various Board Meetings and general meetings of the company have been held for the last 18 months whereas during this period I have received no Notices, agenda or invitation for any of these meetings. I have also not received, as yet, the annual report and balance sheet for the year ending 31-3-1984 for my signature and records. Since last year I have also not been receiving the monthly reports of the company as was our usual practice.....
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....tions in the letter cannot be said to be of any significance since, obviously, guidance was available for one and half years. If it is otherwise allegations are deemed to be correct, then and in that event the case of guidance and Shri O.P. Jalan being inducted as an administrator of the company loses its efficacy. It shall have to be noted that the period involved is of 18 months i.e., to say this grievance of non-availability is existing since the middle of the year 1983 - then why this delay? If otherwise, one is active in management: and one participates in the management and/or one acts as a guide to the administration and management of the company - Is it in the normal course of events expected that the 18 months period would be allowed to be lapsed before a complaint is lodged to that effect - we are afraid, the answer cannot but be in the negative. 11. The letter dated 30-4-1985 (Ex. A. 22) categorically records that all notices, agendas and other documents in connection with the meetings of the Board of Directors and the shareholders of the company held during the period mentioned in the letter dated 25-3-1985 (Ex. A. 21) were duly sent to each of the Directors of the com....
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....1985 at 11.00 A.M. Due to pre-occupation, I am unable to attend the above meeting and, therefore, request you to please grant me leave of absence from the same. Thanking you, Yours faithfully, Sd/-(R. Khemka)." 13. On the factual score, Mr. Sarkar, further contended that induction of the respondent No.7, being Shri Srinarain Jalan as a Director was wholly unauthorised, illegal and unwarranted and this act of induction is stated to be an element of systematic oppression of Shri O.P. Jalan since long prior to induction unauthorised and wrongful allotment of shares were effected and which was objected to by Shri Khemka. Mr. Sarkar further contended that in the Balance Sheet for 1983-84 it was shown as if the Company had incurred a loss of Rs. 13 lakhs but the same does not reflect as a matter of fact, the real financial position but is the resultant effect of manipulated accounts and there has been a systematic siphoning of the funds of the company by way of money lending to related concerns and in fine Mr. Sarkar stated that there has been thus a deliberate oppression and systematic refusal to permit participation in the management on the part of Sri O.P. Jalan so far as Shri Khem....
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....any. The Hyderabad Industries Ltd. a customer of some magni-tude by reason of the special efforts of Shri Khemka stopped placement of orders with the respondent No. 1 company, but commenced the same with Andhra Polymers P. Ltd., and it is on this score that Mr. Mukherjee heavily commented upon the conduct of the petitioner in the matter of ascribing oppression by Shri O.P. Jalan against the Khemkas. 15. Significantly, Hyderabad Industries Ltd. is the organisation wherein both Shri R. Khemka and Shri R.N. Jalan were involved in high positions and by reason of their association with the company (Hyderabad Indus- tries Ltd.) there was, as a matter of fact, no difficulty in the matter of procurement of orders for Deccan Enterprises from Hyderabad Indus- tries Ltd. In fact, the main survival of the respondent No. 1 (Deccan Enterprises) were had from Hyderabad Industries Ltd. The exclusion of Deccan Enterprises and inclusion of Andhra Polymers P. Ltd., in the matter of placement of orders cannot be said to be an instance without any significance since the same was effected during the continuance of both Shri R. Khemka and Shri R.N. Jalan with Hyderabad Industries Ltd. As a matter of fac....
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..... Mukherjee, in support of his conten-tion on capital requirement, contended that the notice of the meeting was sent to all the Directors and there is ample evidence to that effect. The Board in its meeting held on 26-11-1984 did resolve to issue further share capital of Rs. 5 lakhs and the notices for the said meeting were sent to all the shareholders asking them to send their applications along with the application money before 30-12-1984. Mr. Mukherjee relying upon the minutes of the Board meeting contended that the Board again met on 5-1-1985 and granted extension of time up to 15-2-1985. All notices, it has been contended, were sent to all the Directors and to all the shareholders fixing the last date of receipt of the applications up to 15-2-1985 and in the Board meeting held on 28-2-1985 it was resolved to allot further shares to the shareholders who made applications and the allotment of shares were effected in accordance with the provisions of law. As a matter of fact, Mr. Mukherjee contended that the shares were issued on 4-3-1985 and a report to that effect was filed before the Registrar of Companies on 21-3-1985 and there is no question of the issue being declared inval....
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.... with regard to the Secunderabad Commercial Corpn. The break up value of the shares was indicated at 59 per cent and it is at this juncture some amount of controversy arose which was eventually settled between the parties. The learned single Judge while dealing with the matter observed that the respondent No. 9 being Shri R.N. Jalan did participate in the meetings and that he was aware of the increase in the share capital and intentionally did not contribute. The learned Judge went on to observe: ". . . R-9 also accepted that after resignation from H.I.L. he started devoting his time for Nucon as it was in losses. It is also noticed that various powers were given to R-9 in respect of Nucon Company and also the documents and records were handed over after he took over Nucon (Exs. B-300, B-243, B-296). Even though his dis-interestedness is not directly established, the fact remains that the decision for additional share capital was taken in the meeting held on 26-11-1984 and other meetings, he failed to respond. Therefore, it is to be only presumed that he was not interested. Moreover, the way in which he initiated the litigative process from the alleged letter dated 16-8-1984 it wa....
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.... of India on 14-7-1981 (Ex. B. 30) recording, inter alia, the following: "State Bank of India, SS & SB Banking Division, Hyderabad Main Branch. M/s. Deccan Enterprises (P.) Ltd., Rashtrapathi Road, Secunderabad. SIB/SSR/No. 1059 dated 14th July, 1981. Dear Sirs, Small Scale Industries Credit Facilities In continuation of our letter No. SIB/SSR 900 dated the 25th June, 1981, we have to advise having received a letter dated 17-6-1981 from the Export Credit & Guarantee Corpn. indicating therein that your shipments Policy No. 51430 has expired since 1980 and the same was not renewed due to non-payment of premium by you on all the shipments made during the period of cover under the said policy. We shall, therefore, be glad if you will please settle the matter with E.C.G.C. and confirm to us having done so, to enable us to obtain fresh cover of E.C.G.C. for all the export limits presently enjoyed by you. 2. Incidentally, we invite your kind reference to our letter No. SIB 845 dated the 16th June, and shall be glad if you will please advise us whether the paid-up capital is increased to Rs. 10 lacs, to enable us to examine your propos....
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....servations of the learned single Judge and, thus, reject the contentions raised by the appellant and respondent No. 9 in regard thereto. The matter is going on since the year 1981. It was within the knowledge that there is an unconditional assurance to the bank that the share capital shall have to be raised to Rs. 10 lakhs and in terms of the finding of the learned single Judge that the notice was given to both the appellant No. 1 and respondent No. 9, we do record our concurrence as well on perusal of the documentary evidence in regard thereto that there was in fact participation in the proceedings and question of coming to a different conclusion does not and cannot arise. The subscription for increased share capital is a genuine requirement of the company in order to fulfil its obligation. It is for the company to decide what and which method to be applied for the purposes of increased share capital and not for the Court to suggest what would have been better for the company. The jurisdiction of the Court to interfere in the ordinary administration is restrictive in nature and unless it is shown that there is an utter mala fide involved, question of there being any interference w....
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....in detail, excepting recording that the same is not of much relevance for deciding the issue. But we do feel it inclined to refer to the same, more so by reason of the presence of the father of Shri R.N. Jalan and Shri O.P. Jalan before the appellate Court by way of a separate representation and detailed submissions made on that score. 24. Mr. P. Chatterjee, appearing for Respondent No. 8, Shri S.K. Jalan, brought forth certain documentary evidence in support of the contention pertaining to a family settlement and special reference in that context has been made to a hand-written document. Admittedly, the same is in the handwriting of Shri R.N. Jalan, excepting, however, some corrections incorporated at page-3 of the document. Though rather longish in nature, the same is, however, set out herein below for proper appreciation of the same: "Whereas Mrs. SKJ/RNJ/SGJ/SNJ/OPJ has been carrying on the business in name of companies firms, trusts, etc., as per Annexure I enclosed. Whereas this business was a joint family business for all practical purposes and the constitution, shareholding, partnership in various companies, firms were for sake of meeting the various statutory requiremen....
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.... will be completed by 15th April 1985." 25. It would be pertinent, however, to narrate some portion of the evidence, more so by reason of the fact that this aspect of the matter has not been delved into by the learned single Judge on the ground of not being relevant. But we do feel it inclined for the reasons noted above, since judicial ethics prompt us to discuss the subject in slightly more greater detail. The evidence of Shri O.P. Jalan records: "Thereafter, all the members of Jalan group sat together for valuing the shares and net worth of the holdings allotted to each member so that the difference in the assets will be made good by payment by each group to the other group. At that particular time, Mr. R.N. Jalan was holding by way of loans and advances more than Rs. 1.00 crore in NUCON and in the personal accounts of himself and his family belonging to the company firms and individuals of the other groups' families. In order that he is not required to return his amount, Mr. R.N. Jalan started undervaluing the value of the shares/assets, etc., allotted to other group. In spite of repeated meetings no solution could be arrived at mainly because of the unreasonable and uncompro....
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.....N. Jalan did not agree to any independent and reasonable valuation. In August, 1986, Mr. R.N. Jalan, his wife Mrs. Satyabhama Jalan and his son Mr. Hemant Jalan had sent me three separate letters along with bills for selling DEPL's shares at an exorbitant price of Rs. 445 per share. Exbs. B240 to 242 are the three letters along with bills written to me as above. I could not agree to the exorbitant price of DEPL's share as mentioned by Mr. R.N. Jalan and his family members. In the bills enclosed along with exhibits B240 to B 242, it was also mentioned that I have agreed to the said price. This is also untrue and demonstrate the extent of untruth which Mr. R.N. Jalan can speak to extract money from me. In August, 1990, my eldest brother B.L. Jalan tried to mediate and arrived at Hyderabad on 29th August, 1990. During mediation by Mr. B.L. Jalan in August. 1990, Mr. R.N. Jalan once again changed the date of valuation of shares of companies from 31-7-1984 to 31-3-1984. This fact is duly recorded in Exb. B269. The additions and corrections in the said typed document are in the hand writing of Mr. B.L. Jalan. It was also stated by Mr. R.N. Jalan that Khemka's shares has been settled by ....
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.... binding on the other two brothers and settlement at Calcutta between myself and my other two sons S.G. Jalan and S.N. Jalan can be binding on the Hyderabad Group. As a father and at this old age it is my only ambition to see that during my life time my sons live in harmony. I shall be grateful to this Hon'ble Court, if my desire conies true by appointment of Court appointed Arbitrator to settle the disputes between myself and my two sons R.N. Jalan and O.P. Jalan at Hyderabad." Two other documents do also refer rather emphatically to the family settlement as also the issue of new shares. The first of the two letters is dated 21-1-1985 being Exb. B-201, the signature whereof stands admitted. It is a type-written document in the manner following: "R.N. JALAN Shubham, Gulmohar Avenue, Rajbhavan Road, Hyderabad. 21st January, 1985. Respected Father, I have to inform you that I am not interested to invest in DEPL's new share issue which is to Omprakash's share. In fact Nucon requires substantial funds and I am unable to spare any finance at present. Khemkas have also refused to contribute and I enclose Mahesh's letter dated 16-1-1985 in ....
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....Jalan and for the self-same reason as noticed above, we are not inclined to accept the same, though, however, record our concurrence that, strictly speaking, nothing turns on this issue pertaining to the matter, excepting, of course the credibility of the witnesses. The learned single Judge while dealing with the matter recorded: "But one thing is clear that P-1 had reconciled to settle his accounts and P-1 and Jalan family submitted to the mediation and arbitration of Mr. Khaitan." In this context, reference ought to be made to a letter dated 3-7-1986 being Exhibit 'A-52', which reads as follows: "PRADIP KUMAR KHAITAN ADVOCATE9 OLD POST OFFICE STREET Tele: 23-3197, 23-1388 Telegram: Khaitanco CalCalcutta-13-7-1986 Telex :KCLCA 2187 My dear O P, Please refer to your letter of 25th June, 1986 and the conversation I had with you as well as with Shree Narayan. It was agreed that the payment for the shares would be made within June, 1986 although you would attempt to do so in April, 1986. Before I left for abroad in the last week of May, I had informed everybody that I would definitely be back on 22nd June, 1986. I would therefore have been happy if the payment could have been....
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....r R-3 has acted in a manner detriment to the interest of the other shareholders or he changed the setup of administration after he became the majority shareholder. Admittedly, P-1 and R-9 continued to be the Directors even after the majority shareholders and they are being invited to participate in all the meetings and affairs of the Company. It is not as if they are completely excluded from the management of the company. On the other hand, P-1 never attended meetings after 31-3-1983 for the reasons already set out above. Therefore, even after the additional allotment of shares in favour of R-3, it cannot be said that the position of P-1 and R-3 changed in a manner prejudicial to their interest or their members. As already found by me, the genesis took place when P-3 was not properly accommodated in 1982 when he returned back from Saudi Arabia and the crisis which was being from 1982 took its deep route in 1985 when P-3 was withdrawn from the Board of A.R.I.L. Saudi Arabia. This lead to the filing of the suit by P-1 and exchange of letters between P-1 and R-3 and simultaneously the correspondence was started by R-9 with R-3. Even though the additional issue was never focal issue, y....
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....jority rendering R.N. Jalan and R. Khemka as the minority and it is on this context that the judgment of the Calcutta High Court in Appeal No. 186 of 1971 - Tea Brokers (P.) Ltd. v. Hemendra Prosad Barooah was relied upon and Mr. Sarkar has been very emphatic to the effect that the Calcutta High Court in the appeal has observed that a single act of 'oppression' is sufficient for the purpose of granting relief under section 397 and issuance and allotment of new shares by the company to a particular person may be treated as an act of 'oppression'. The Calcutta High Court decision is, however, clearly distin-guishable on facts, more so by reason of the discussions as above pertaining to the issuance of notices and the documentary evidence in support of the disinclination of both Shri Khemka and Shri R.N. Jalan to participate in the new issue of shares. 32. In the of-cited decision of the House of Lords in Scottish Co-operative Ltd. v. Meyer (1958) 3 All. E.R. 66 Viscount Simmonds stated in no uncertain terms that the oppressor must exercise the power and authority in a manner burdensome, harsh and wrongful. In the facts of the matter under consideration, question of there being any b....
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....y on which every shareholder who entrusts his money to a company is entitled to rely. This, broadly speaking, was the class of case which the draftsman of S. 210 evidently had in mind, and the question is whether the petitioners have brought themselves within the scope of the section." Lord Keith in his judgment observed: "But, apart from this, the question of absence of mutual confidence per se between partners, or between two sets of shareholders, however relevant to a winding up, seems to me to have no direct relevance to the remedy granted by S. 210. It is oppression of some part of the shareholders by the manner in which the affairs of the company are being conducted that must be averred and proved. Mere loss of confidence or pure deadlock does not, I think, come within S. 210. It is not lack of confidence between shareholders per se that brings S. 210 into play, but lack of confidence sprining from oppression of a minority by a majority in the management of the company's affairs, and oppression involves, I think, at least an element of lack of probity or fair dealing to a member in the matter of his proprietary rights as a shareholder." As noted earlier, that there is a s....
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....appellate Court. These principles are well established; but, as has been observed by Viscount Simon L.C. in Charles Osenton & Co. v. Johnston [1942] AC 130 at p. 138 "the law as to the reversal by a Court of appeal of an order made by a Judge below in the exercise of his discretion is well established, and any difficulty that arises is due only to the application of well settled principles in an individual case." 35. While it is true that the matter under consideration before the Supreme Court pertains to section 34 of the Arbitration Act of 1940, but the principle of law enunciated by the Supreme Court has its full force and applicability by reason of the discretionary remedy as is available in terms of the provisions of section 397. Same is the view expressed by P.D. Desai, C.J., speaking for the Bench in Sharawan Kumar Agarwal v. Shrinenp Investment Ltd., 1994 C.W.N. 482 wherein in Desai, C.J., observed: "It is not disputed that the order under appeal dated February 6, 1990, accepting the offer and confirming the sale in favour of the first respondent is discretionary in nature. The Appellate Court would not be normally justified in interfering with the exercise of discretion....
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....PC 111, wherein the Privy Council observed: "The defendants have now appealed to His Majesty in Council, and the case has been argued on their behalf in great details. It was urged in the course of the argument that a registered copy of the Will of 1898 was admitted in evidence without sufficient foundation being laid for its admission. No objection, however, appears to have been taken in the first Court against the copy obtained from the Registrar's office being put in evidence. Had such objection been made at the time, the District Judge, who tried the case in the first instance, would probably have seen that the deficiency was supplied. Their Lordships think that there is no substance in the present contention." On the second count, Mr. Sarkar contended that further issue of shares was only to gain control of the company and to reduce the majority to a minority. We, however, cannot lend any concurrence to the same. As noticed above, there was a definite assurance and commitment to the bank and there was, in fact, a pressing need for such an increased share capital. The methodology to comply with such a requisition ought to be at the discretion of the company and it is no part ....
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....s endless and unwarranted prolongation of trivial and insignificant issues coupled with serious personal differences have created formidable symptoms, where P-1 and R-9 cannot go hand in glow with R-3. It is also understood that in later years, R-9 resigned the Directorship of the company. The company has already faced litigation for over a decade for the reasons as set out earlier. Therefore, this Court is of the firm opinion that the affairs of the company have not been conducted nor will be conducted in future in the interest of the company. Apprehension of stalemate is writ at large. Consequently, the situation has arisen that company cannot function in the hands of P-1, R-9 and R-3 jointly. Three powerful horses yielding strength in different directions cannot bring the charriot safely to the destination. Therefore, I find that the company should be run either by R-3 or by P-1 and R-9 jointly. It can be safely concluded that a quietus cannot be brought in the company unless the matters complained of or apprehended are resolved once for all and this Court is fully empowered to meet such a situation in the interest of the company. In sub-section 2 of section 398 it is clearly st....
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..... 41. In the matter of grant of the final relief, the learned Judge recorded: "110. Keeping in view the above factors, the situation prevailing as on the date of the filing of the Company Petition and by exercising the powers under section 398(2) read with section 402 of the Companies Act, I pass the following orders: (i)The value of the shares held by P-1, P-2 and R-9 and the members of his group viz., his wife and son and R-3 and members of his group viz., R-4, R-5 and R-6 shall be assessed by competent Chartered Accountant. (ii)The value of the shares possessed by P-1 and P-2 shall be assessed as on 30-6-1986 and the value of the shares possessed by R-9 and his members of family shall be valued as on 31-7-1986. The value of shares held by R-3 and members of his family viz., R-4, R-5 and R-6 shall be assessed as on 1-1-1985 i.e., prior to the allotment of additional shares. Though the value of shares are to be normally reckoned on the date of presentation of Petition as per principle laid down in Scottish Wholesale Society's case (30th cited supra) , since P-1 and R-9 were agreeable for settlement during respective periods, the dates were fixed accordingly. (iii)The shares h....
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....S.I. Foundry: AIR 1966 Cal. 512 wherein in paragraph-66 of the report, Mitter, J., speaking for the Bench observed: "A complaint was justly made that the learned Judge failed to evolve a formula for remedying the permanent evil of the company, namely, the conflict between two groups of shareholders. In my opinion, the company cannot function properly if these two warring groups continue to hold the shares. As a matter of fact, at the early stage of the hearing of the appeal, a suggestion was made that one of the two groups should buy up the other's holding but nothing tangible came out of attempts made by Counsel on that behalf. In my opinion, the special auditor should be directed to find out the fair value of the shares at the date of the petition as was directed by Lord Denning in Scottish Co-operative Wholesale Society Ltd.'s case 1959 AC 324. We also order the oppressor i.e., the respondents to the petition to buy the shares of the petitioners. In case the respondents are unable or unwilling to buy the shares, the petitioners should have an option to buy the respondent's shares at the same price. The price is to be arrived at on the basis of the break-up value of the shares. ....