TaxTMI 
TaxTMI 
2000 (8) TMI 1051
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.... The case of the appellants in O.J. Appeal No. 6 of 1995 (hereinafter referred to as the petitioners) was that the respondent No. 6 company Gaekwad Investments Corpn. (P.) Ltd. ("the company") which was initially incorporated as a Public Ltd. company in the year 1958 was converted into a Private Limited Company around the year 1971 and its registered office is situate at "'Indumati Mahal', Jawaharal Nahru Marg, Baroda 390 001". The company was established with the objective of carrying on business of an investment trust company and to transact the activities which are referred to in the memorandum of association of the company and its articles of association at Annexure "A" to the petition. 2.1 According to the petitioners, the said company was closely held by family members and family friends who were its shareholders. Since its incorporation and until his demise on 1-9-1988, Shrimant Fatehsinh Gaekwad was the Chairman of the company and in his absence, his mother the petitioner No. 1 Smt. Shantadevi Pratapsinh Gaekwad used to function as the Chairman. Shrimant Fateshinhrao Gaekwad was holding about 75 per cent of the equity shares of the company. According to the petitioners, th....
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.... with a request to approve the same, both the said note bearing endorsement of Mr. N.K.K. Mohammed and the draft minute forwarded under the note dated 29-3-1988 of the Company Secretary Mr. M.N. Khade, reflected the agreed basis for allotment of 15,000 shares as stated in the petition. According to the petitioners, on the death of Shrimant Fatehsinhrao Gaekwad the right in respect of the 8,000 equity shares which were decided to be allotted as per the draft minutes to Shrimant Fatehsinhrao Gaekwad vested in his mother the petitioner No., who was his sole heir. The respondent No. 1 as a member of Shrimant Fatehsinhrao Gaekwad family had been managing the affairs of the company for sometime and after the death of Shrimant Fatehsinhrao Gaekwad, he continued to manage the same. According to them, they had reposed trust and faith in him believing that he would be managing the affairs fairly and honestly and will discharge his obligations to his mother, sisters and other members of the family and close friends. Therefore, no accounts were checked nor any questions asked by the petitioners to the respondent No. 1. 2.3 It is alleged that in or about October/November 1990, the petitioners ....
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....ing at which annual accounts were approved, was held at Bombay on 10-12-1990 and therefore, according to the petitioners, it was physically impossible for the annual accounts to be sent thereafter on that day itself, i.e., 10-12-1990 to the auditors of the company at Baroda for their examination and report and for the auditors to have examined and made the report on that very day at Baroda, and to send it back to Bombay. The fact that all this could not have been done in a single day shows the mala fide conduct of the respondent Nos. 1, 2, 9, 10 and 11. It is further alleged that several shareholders including the petitioners had objected to the validity of the AGM as its very commencement on 20-12-1990. At that meeting which was held in the registered office of the company at Baroda, the respondent No. 1 had taken the Chair and 15 shareholders who are named in paragraph 10 of the petition attended in person or through their proxies. Besides these persons, Shri H.A. Shinde, Shri V.K. Raichand and Shri P.U. Rana also attended the meeting as the directors of the company. The objecting members agreed to participate at the meeting under protest without prejudice to their objections aga....
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.... of auditors was unanimously passed. However, the resolutions on all other items on the agenda, including the resolution regarding re-appointment or appointment of the respondent Nos. 1, 2, 9, 10 and 11 as directors of the company were, defeated by a majority of 1122 votes against and 66 for the resolutions. The respondent Nos. 1 to 5 had voted in favour of the resolutions while all others had voted against them. When the respondent found that these resolutions were lost, it is alleged, he took physical possession of the ballot papers, the registers of members, the proxy register, the attendance register and other records and in a fit of rage threatened in presence of the petitioner No. 1 and other lady members that he would be taking them away to Bombay. It is stated that many members attempted to persuade the respondent No. 1 to prevent him from taking away the registers, ballot papers and other documents, but he threatened them by saying that a Police complaint had already been lodged on his behalf and those obstructing him from leaving the meeting with the record of the company would face dire consequences. The members of the company were witness to the conduct of the responden....
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.... members and other documents and records of the company with them on 20-12-1990. It is contended that if the transfer of shares in favour of Indreni had already been rescinded in the Board meeting of 9-8-1990, the respondents would not have waited till 20-12-1990 to file a reply in the Suits at Baroda and Rajkot, for stating that the said transfers were rescinded on 9-8-1990. It is also stated that the plaintiffs in the Baroda suit had on 21-12-1990 asked for copies of the minutes of the Board meeting allegedly held on 13-7-1990 and 9-8-1990, but these respondents have not supplied the same till the filing of this petition. The petitioners had made enquiries from the Company Secretary Mr. M.N. Khade, who was present at the meeting of 13-7-1990 and were informed that in the said meeting there were no discussion at all on the fact that the transfer notices were not sent to the shareholders and there was also no discussion about any legal opinion concerning the validity of such transfers to Indreni. Mr. M.N. Khade had informed the petitioners that the alleged meeting of 9-8-1990 had not at all been held and that the transfers to Indreni had not been rescinded at all. The petitioners h....
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.... Rana and Shri H.A. Shinde, who had been directors of the company for last several years. The notice for their removal was moved by the respondent No. 4 Shri P.S. Gaekwad, who is the son of respondent Nos. 1 and 2. Furthermore, the registered office of the company which had ever since its inception been situated at 'Indumati Mahal' at Baroda was sought to be shifted to Surat and the respondent No. 1 was sought to be made a permanent director and Chairman of the company. The restrictions on the transfer of shares were sought to be diluted to facilitate the transfer of shares of the company in favour of concerns in which these respondents had an interest. According to the petitioners, all these changes were sought to be effected in haste to defeat the legitimate claims and rights of the petitioners and to perpetrate the power and authority of these respondents to use the company to their own personal benefit. The power to call such meeting was questioned by several shareholders including Shri P.U. Rana and Shri H.A. Shinde and telegrams dated 13-1-1991 were addressed stating that since the respondent Nos. 1 and 2 ceased to be the directors, and had no authority to call such a meeting....
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.... raised "palpably false story" that the transfer in favour of Indreni was rescinded on 9-8-1990. It is also alleged that respondent Nos. 1, 2, 9, 10 and 11 had purported to relieve long standing employees of the company including its Company Secretary Shri M.N. Khade. On these allegations it was contended that the affairs of the company were being carried on in a manner prejudicial to the interest of the company and to the public interest. It was also pointed out that the respondent Nos. 1 and 6 have filed Civil Suit No. 63 of 1991 in the Court of learned Civil Judge (Senior Division) at Surat against the petitioners and others claiming themselves to be the directors of the company and seeking various reliefs it is also alleged that in order to grab control and properties of Alaukik Trading Investments (P.) Ltd. the respondent Nos. 1 and 2 acting as the board of directors of the respondent-company filed Special Civil Suit No. 675 of 1990 in the name of the company, in the civil Court (Senior Division) at Baroda. According to the petitioners in view of various acts and omissions on the part of the respondent Nos. 1 and 2, the affairs of the company were being conducted in a manner p....
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....tition, the respondent No. 1 filed his affidavit-in-reply dated 21-3-1991, denying the allegations and raising a preliminary ground that the petition ought not be entertained in view of the fact that the allegations and grievance set out in the petition were urged in some form or the other in the related proceedings pending before the civil Courts, namely - three Suits at Baroda, one Suit at Rajkot and one Suit at Surat, as per the list Annexure-I to the affidavit-in-reply. It was contended that the provisions of sections 397 and 398 were not attracted and that there was no oppression of minority as contemplated by these provisions. According to the respondent No. 1, the petition was calculated by the petitioners and their supporters to wrest control and management of the well-known and prosperous Public company, namely - Baroda Rayon Corpn. Ltd. It is alleged that the petitioners had made false statements that the respondent No. 6 company and various other business entities were meant to be the personal property of late Shrimant Fatehsinhrao Gaekwad and that they passed by inheretence. Moreover they had made false statements relating to the issue of 15,000 equity shares and relate....
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....000 equity shares of Rs. 100 each be issued at par to the members of the company. The resolution which was passed at Board meeting, which has been reproduced in the affidavit-in-reply, reads as under:- "RESOLVED that out of 25,000 equity shares of Rs. 100 each, 15,000 equity shares of Rs. 100 covering Rs. 15,00,000 be issued at par to the members of the company at present and the balance as and when required. FURTHER RESOLVED that the management Committee of the company be and is hereby authorised to issue equity shares to members in such proportion as it deems fit. FURTHER RESOLVED that the Management Committee be and is hereby authorised to do all such acts, deeds and things necessary for the purpose." Pursuant to the above resolution, the Company Secretary Mr. M.N. Khade issued a circular letter dated 12-2-1988 to all the existing share-holders requesting them to subscribe for the equity shares at par. It was stated therein that if no reply was received by 10-3-1988, it would be presumed that the shareholders concerned were not interested in the offer. That letter is at Annexure "16" of the affidavit-in-reply of the respondent No. 1. The minutes of the earlier meeting held o....
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....oner No. 1 had as long back as in November 1988 deposited an amount of Rs. 15 lakhs to subscribe for shares of the company and that by letter dated 29-11-1990 sought retrospective entitlement to 8,000 shares on the ground of being the sole heir of the beneficial interest/right of Shrimant Fatehsinhrao P. Gaekwad was false and incorrect. According to the respondent No. 1, an amount of Rs. 15 lakhs was paid as a loan to the company and that she had no right to apply for 8,000 shares. It was contended that in any event, the right to the said issue was renounced by Shrimant Fatehsinhrao Gaekwad in favour of the respondent No. 1 and his children. 3.2 It was further stated in the said reply that the respondent Nos. 1 to 5 had floated their own investment company, namely Indreni Holdings (P.) Ltd., in which the respondent Nos. 1, 2, 3 and 4 had 50 equity shares each and the other holder Prasang Holdings (P.) Ltd. had 800 equity shares in the company. It was stated that in Prasang Holdings (P.) Ltd., the respondent Nos. 1, 2, 3 and 4 had 250 equity shares each and under the circumstances, Indreni was wholly owned investment company held and controlled by the respondent No. 1 and his famil....
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....s merely respondent Nos. 1 to 5 in a corporate form, none of the other members would get hyper-technical but would readily consent in the transfer to Indreni, as any reasonable and fair-minded person would have done and hence, there was no real danger of having to disinvest in favour of other members. It is further stated that even though he had prepared a letter dated 15-11-1989 to all the shareholders, he did not deliver them to any of them and falsely informed the respondent Nos. 1 to 5 that there was no response to the proposed transfer it is stated that this was recorded in the minutes of the Board meeting held on 27-12-1989 "in usual course". It was stated that in view of the conduct of Mr. Khade, he was removed from service of the company from 5-1-1991. 3.3 In paragraph 6(t)(2) of the affidavit in reply it is stated that in Suit No. 305 of 1990 filed on 28-11-1990 at Rajkot by Smt. Pramilaraje Kachar of Jasdan for similar reliefs an interim order was obtained in respect of these shares on the same day. The date of hearing was fixed on 11-12-1990, but on that day the injunction order was extended till 10-1-1991. It is stated that a couple of days before the date of the AGM i....
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....ointment of Dr. G.M. Oza was entirely irrelevant to the present proceedings and cannot assist the petitioner in their case of 'oppression' by the majority shareholders within the meaning of section 397 it is further stated that having regard to the conduct of Mr. P.U. Rana and Mr. H.A. Shinde it was decided at the AGM of 20-12-1990 that it was in the interest of the company that they should not continue on the board of directors of the respondent No. 6 company. In the meanwhile, the respondent No. 4 Mr. P.S. Gaekwad had issued notices under section 190 and section 284 of the Act, proposing resolutions for their removal. These were placed before the board of director on 5-1-1991, when it was decided to convene an Extraordinary General Meeting of the company at a short notice on 14-1-1991. The Extraordinary General Meeting had on its agenda, also a resolution for appointment of respondent No. 1 Shri Sangramsinh Gaekwad as the permanent director and Chairman of the company, a resolution for shifting the registered office of the company to Surat, and a resolution for amendment of the articles of association of the company. It is stated that this meeting was held on 14-1-1991 and the en....
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....P.U. Rana to give xerox copies of the register of members, register of transfers the last recorded minutes of the meeting of the board of directors and minutes of the committee meetings of 21-3-1988 and 10-12-1988 duly certified by a Notary Public. It is further stated that Shri Rana took the documents and got the same xeroxed and thereafter Shri M.C. Vaidya, Notary was called to the office, who then verified the said copies and after comparing the same with the originals, certified the same to be true copies. These copies were handed over to the petitioner No. 1 and the certified copies of the minutes of board of directors of 30-3-1990 and the minutes of the Committee meetings held on 21-3-1988 and 10-12-1988 are produced at Annexures A/1, A/2 and A/3 of the affidavit-in-rejoinder. It is indicated in the minutes of the meeting of the Managing Committee held on 21-3-1988, which is at Annexure A/2 to the rejoinder that only two persons, i.e., the respondent No. 1 and one Shri P.H. Chinoy were present at the meeting, while the respondent No. 1 in his affidavit-in-reply II(2)(vi) had stated that at a meeting of the Managing Committee held on 21-3-1988, he requested Shrimant Fatehsinhr....
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....than 15 lakhs free of interest to respondent No. 6 and Smt. Mrunalinidevi Puar had also advanced Rs. 15 lakhs free of interest, and that no interest has been paid to her. 4.3 As regards the meeting of 20-12-1990, she has stated that the minutes produced by the respondent No. 1 are fabricated and has annexed at Annexure "5" collectively, affidavits of other persons who had attended the meeting to show as to what transpired at that meeting. It is further pointed out in paragraph 22 of the rejoinder that the affidavit in the Baroda Court which is said to have been filed on behalf of these respondents as well as the 'purshis' were filed only after the general meeting of 20-12-1990. It is stated that they were filed after the respondent No. 1 and his wife took physical control of the register of members and other documents and papers and spirited them away. It is also stated that after the respondent Nos. 1, 2, 9 and 11 ceased to be directors, remaining board of directors filed their annual return and form 32 to the Registrar of Companies and had also written letters to Baroda Rayon Corporation, Banks and others intimating to them that the said respondents had ceased to be the director....
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....otted the shares. According to her, she was intimated by the respondent No. 1 that certain funds were required for the respondent No. 6 company and she had sent him two separate cheques dated 23-3-1988 and 19-5-1988 for Rs. 20,000 and Rs. 80,000 respectively under the forwarding letter dated 19-5-1988 and the share certificates were issued to her by the respondent No. 1 on or about 30-5-1988. She has denied that she was given 500 equity shares from 8000 shares kept apart and allotted to her late brother Shrimant Fatehsinhrao Gaekwad. She has stated that she had made no application for any of these 1000 shares. As regards the AGM of 20-12-1990, she has stated that at the said meeting all the resolutions except the resolution for appointment of the auditors, were defeated by majority of 1122 to 66. She has stated that she gone through the affidavits made by Shri P.U. Rana and others in this regard and that what is stated therein as regards what transpired at the said meeting was true and nothing said to the contrary by the respondent No. 1 was true. The appellant No. 4 Shri Rajnitsinh Gaekwad has also given similar version as regards the meeting of 20-12-1988, stating that after coun....
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....the register. As regards the appointment of Dr. G.M. Oza as the director, he has produced at Annexure 'D' to the sur-rejoinder letter dated 11-3-1991 written by Dr. Oza to the respondent No. 2, who was the executive director, in reply to her letter dated 28-2-1991, which was delivered to him in person by Shri Khoth, stating that he was surprised that the respondent No. 2 had not received his original letter dated 17-12-1990 and the copies addressed to other directors, which were left by him on the table of Mr. M.N. Khade Company Secretary of the respondent No. 6. It is stated in the said letter by Dr. Oza that he still confirmed and maintained that he had already resigned on 17-12-1990 from the Directorship of the respondent-company and that he had no intention to be re-elected as a director. He has annexed copies of his letter dated 17-12-1990 which was addressed to the respondent-company. He has stated that he had not offered for re-election nor did he wish to be re-elected as a director of the said company. This was his response to the notice of the AGM, which was to be held on 20-12-1990, in which the resolution for his re-election was proposed. Another letter dated 17-12-1990 ....
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....scrutiniser at the said meeting and the affidavits of Capt. V.K. Raichand, who is respondent No. 11 in this appeal, Mr. Pirojshah Hiraji Chinoy, who was one of the directors of the company, and, Mr. K.V. Khoth, who is said to have written the letter dated 11-6-1988 under the directions of Shrimant Fatehsinhrao P. Gaekwad, renouncing the additional shares offered to him in favour of the respondent No. 1 and his children. 7. In the background of the above broad contours of the controversy between the rival groups, the learned single Judge by his judgment and order dated 17-4-1995, came to a finding that there was a mandate of the Extraordinary General Meeting which was held on 17-12-1987 for issuance of 25,000 equity shares of the company. It was also found that the board of directors at its meeting held on 8-1-1988 decided to issue only 15,000 shares in the first instance, leaving its managing committee to carry out the mandate. It was further held that so far as the allotment of 6475 shares to the respondent group in concerned, the petitioners had not earlier objected though they had objected to the issue of additional 3,000 shares in favour of the respondent Nos. 4 and 5. It was ....
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....quired to be considered and in his opinion, such oppression should be subjectively felt and objectively established and according to the learned Judge the oppression, if any, related to the control that had slipped into the hands of respondent No. 1 and nothing else. His Lordship took note of the fact that there were prayers found in the present petition as well as other two proceedings before the CLB that the shares transferred to Indreni be offered to other shareholders except the respondents' group and that the transfer to Indreni were invalid. It was held that the additional issue of 15,000 shares was to be dealt with after keeping apart 8,000 shares for Shrimant Fateshsinhrao P. Gaekwad and the rest were to be issued in different names. It was observed that 51 per cent of shares referred to in the minutes of the meeting dated 21-3-1988 will work out to 7650, but the difference of about 350 shares on the basis of 51 per cent on one side and the round figure of 8,000 on the other was in the opinion of His Lordships, of no consequence. The learned Judge opined that the resolution of the Board dated 8-1-1988 continued to hold the field and the business of allotment as continued al....
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....place in the month of January 1991 and more than 4 years having passed and more particularly because the fate of BRC is inextricably linked up with that of GIC, in larger public interest, keeping in mind BRC, I would not give any relief to the petitioners. If reliefs were to be given it would have been to strike down the said EGM and its entire proceedings and declared the directors removed thereat to be continuing as directors from that order onwards till the remaining time of the tenure." It was finally held that the petitioners had failed to make out a case of oppression. It was held that as regards mis-management, if at all, the case of the petitioners was only an apprehension that the respondents' group coming in majority will mis-manage the company, but this apprehension was belied. It was held in paragraph 167 of the judgment that there was no question of aggrandisement on the part of the petitioners and "Except for getting 9481 shares for themselves, they had done nothing". The learned single Judge therefore, dismissed the petition, with no order as to costs, having regard to the relationship between the parties. 8. The learned senior Counsel appearing for the appellant, i....
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....aft minutes at Annexure "C" collectively to the petition, even the name of Shrimant Fatehsinhrao Gaekwad was mentioned as the Chairman present in the meeting. It was also submitted that this conflicting version put under cloud the entire process of allotment of shares to the members of the company by the Managing Committee. It was also submitted that since the Managing Committee admittedly consisted of three persons, namely Shrimant Fatehsinhrao P. Gaekwad, the respondent No. 1 and Shri P.H. Chinoy, the decision taken by two of the three numbers of the Managing Committee was not a decision of the Managing Committee. It was further contended that since Rs. 15 lakhs, were already standing to the credit of the petitioner No. 1 in the books of account of the company, there was no fear of not being able to recover from her the face value at which the shares were to be allotment to the members. It was submitted that there was, under the law, no time limit for getting entitlement transferred to the name of the heir and therefore, even when the letter dated 29-11-1990 was written by the petitioner No. 1 to the company, the shares could have been registered in her name on the basis of such ....
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....pondent Nos. 1 to 5. It was also argued that the respondent Nos. 1 and 2 had removed the registers and other documents of the company and shifted the office of the company from Baroda to Surat and also removed the longstanding directors of the company by convening an extraordinary meeting on 14-1-1991 and thereby they gained a complete control over the company. It was submitted that the course of conduct of the respondent Nos. 1 and 2 clearly indicated that they acted in self-interest, with a view to enhance power and control to the detriment of the interest of the company and its other shareholders and in breach of the fiduciary duties of the directors. 8.1 In support of his above submissions, the learned counsel relied upon the following decisions:- 1.Decision in Needle Industries (India) Ltd. v. Needle Industries Newey (India) Holding Ltd. AIR 1981 SC 1298 was cited for its prosecution that if the conduct of the directors lacks in probity and is unfair and causes prejudice to the exercise of shareholders' legal and proprietary rights, it would amount to oppressive conduct. It was held therein that such conduct must be continuous acts on the part of the majority shareholders sh....
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.... reduce a majority shareholder to minority would be void for mis-management. 6. The decision of the Supreme Court in John Tinson & Co. (P.) Ltd. v. Mrs. Surjeet Malhan AIR 1997 SC 1411 was referred to for the proposition that it was well settled that articles of association of a private company was a contract between the parties. This was cited in context of the minors being allotted the shares of the company at the instance of the respondent Nos. 1 and 2, who were their parents. 7. The decision in Life Insurance Corpn. of India v. Escorts Ltd. AIR 1986 SC 1370 was cited for the proposition that while a transfer of shares may be effective between the transferor and transferee from the date of transfer, the transfer is truly complete and the transferee becomes a shareholder in the true and full sense of the term, with all the rights of a shareholder, only when the transfer is registered in the company's register. 9. The learned Senior Counsel appearing for the contesting respondents supported the judgment and order of the learned Single Judge and contended that the oppression on the part of the petitioners was neither subjectively felt by them, nor was it objectively established.....
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....Investments (P.) Ltd. ("Alaukik"). It was submitted that by letter dated 17-5-1990, the respondent No. 6 was suddenly informed that Alaukik was no more its subsidiary and since this was done behind the back of the respondents' group, the Suit was filed against the petitioners' group. It was submitted that nobody in fact had any objection to issuance of 9481 shares to the respondent Nos. 1 to 5 and it was only because the said was Suit filed that the petitioners retaliated by a flurry of Suits and this petition in which they had not questioned the allotment of 9481 shares, but questioned only 3000 out of them, though by an amendment in the petition they had thereafter questioned everything. It was also submitted that petition under sections 397 and 398 should not be entertained by the Court where civil proceedings were filed and pending, and which covered the reliefs claimed in the petition or a part of them. It was submitted that since the reliefs in respect of the transfer to Indreni of the shares of respondent Nos. 1 to 5 were also claimed in the Suits filed by some shareholders who supported the petitioners' group, the present petition ought not to be entertained when alternativ....
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.... respondent Nos. 1 to 5 to Indreni. It was argued that Mr. M.N. Khade who was supposed to circulate the notice in respect of the transfer had misinformed the respondent Nos. 1 to 5 as a result of which the transfer to Indreni was later on rescinded. It was submitted that the real object of the petition was to exert pressure for restoration of power, which shows the mind-set of the petitioner. Since the petition is filed for a collateral purpose, it constitutes an abuse of the process of the Court. He submitted that since the respondent Nos. 1 to 5 were in majority, they were entitled to take the decisions in the board of directors in respect of the affairs of the company and such decisions cannot be assailed on the ground that they were oppressive to the minority. 9.1 In support of his submissions, the learned Senior Counsel referred to the relevant material on record and also the following citations:- 1.He referred to Pennington's Company Law, Seventh Edition p. 901 for the proposition that a petition for relief from oppression under the statutory provision would be dismissed, if it was not presented in good faith solely in order to obtain such relief. 2.Decision in Hungerford ....
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....ransferred to a person who is not a member so long as any member was willing to purchase the same at the fair value. The purpose of such restriction, common in the articles of a private company, is to preserve the proportionality of the other members' shareholding as between themselves. A member cannot evade such provision for pre-emption by contracting to sell his shares to an outsider. It was therefore, incumbent on a proposing transferor to give a transfer notice in writing to the company that he desires to transfer the share. Such notice shall specify the fair value and shall constitute the company as agent for the sale to any member of the company. A transfer notice could not be revoked without the sanction of the directors as provided by article 8 of the articles of association. The company was required, within 28 days after being served with the transfer notice to find out the purchasing member to whom the proposing transferor was bound to transfer the share upon payment of its fair value as per article 9. The transfer rules incorporated in article 13 provided that the share specified in any transfer notice shall be offered by the company to the members other than the propos....
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....ing Committee was authorised to issue these shares to members in such proportion as it deemed fit. As per the admitted break-up of the original 425 shares held by the members, before 15,000 equity shares were offered to the members at par by letter dated 12-2-1988 out of 425 total number of equity shares, 301 stood in the name of Shrimant Fatehsinhrao P. Gaekwad, 7 in the name of his mother the petitioner No. 1 Smt. Shantadevi Gaekwad, 10 in the name of his brother Shri Ranjitsinh Gaekwad the petitioner Nos. 4, 1 in the name of Smt. Devyanidevi Chandrasen Gaekwad - the petitioner No. 2, 10 in the name of the petitioner No. 3 Capt. V.S. Hazare, 5 in the name of the petitioner No. 5 - Smt. Lalitadevi Kirdatt, 10 in the name of the supporting respondent No. 12 Dr. (Mrs.) Mrunalinidevi Puar and 5 in the name of the supporting respondent No. 13 Smt. Shubanginidevi Raje Gaekwad. The respondent No. 1 Shri Sangramsinh P. Gaekwad and his wife respondent No. 2 Smt. Ashraraje S. Gaekwad had 1 and 5 shares respectively in the company. Thus, prior to the disputed fresh allotments of shares, according the appellants, their group owned 348 shares out of 425 while the respondent Nos. 1 and 2 toget....
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.... as laid down in regulation 28. In the present case, therefore when Shrimant Fatehsinhrao P. Gaekwad died intestate on 1-9-1988, his mother, i.e., petitioner No. 1 who was the only class one heir succeeded to the shares which were already held by him and became entitled under regulation 28 to the same dividends and other advantages to which she would be entitled if she were the registered holder of the shares of Shrimant Fatehsinhrao P. Gaekwad. This statutory entitlement did not depend upon the mercy of the board of directors which could have, at the best, given a notice as required by the proviso to regulation 28. There is no time limit provided in regulation 28 for exercising the option given to such successor to get registered as holder of the share or to make transfer of the share as the deceased could have made. In other words, there is no contingency provided by which the rights which devolved on the heir would lapse, and the attribute of a vested right in the share of the deceased member devolving on the successor is duly recognised. Therefore, if there was a valid decision taken to allot new shares and such shares are earmarked for such allotment to a member who became ent....
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....nd his children. This story has surfaced in the affidavit-in-reply of the respondent No. 1. According to the respondent No. 1, after the company resolved in its Extraordinary General Meeting held on 17-12-1987 to increase the share capital, it was resolved in the Board meeting of 8-1-1988 that 15,000 equity shares of Rs. 100 each be issued at par to the members of the company and that the Managing Committee of the company be authorised to issue equity to members in such proportion that it may deem fit. The Secretary of the company Mr. M.K. Khade thereupon issued letter dated 12-2-1988 as per Annexure '16' to the affidavit-in-reply of the respondent No. 1, communicating the decision to increase the equity share capital of the company by issuing to its member 15,000 equity shares at Rs. 100 each at par and requesting them to convey their acceptance for the number of shares the member would like to subscribe, with a cheque for the full amount on or before 10-3-1988, failing which it would be presumed that the member was not interested in the offer and the shares will be offered to the other members. There is some dispute over the fact whether this letter was sent to all the members, b....
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....be to these 8,000 shares and renounced the offer in favour of the respondent No. 1 and his children. In para II(2)(viii) of the affidavit-in-reply filed in this company petition it is stated by the respondent No. 1 that ultimately on 11-6-1988 addressed a letter to him through his personal Secretary renouncing the offer made to him "in my favour and in favour of my children". A copy of the letter dated 11-6-1988 said to have been addressed to the respondent No. 1 by the Secretary to Shrimant Fatehsinhrao P. Gaekwad, Mr. K.V. Khoth is annexed at Annexure 10 of the said affidavit-in-reply. Much reliance is placed on this letter on behalf of the contesting respondents to contend that the entitlement to get 8,000 shares which were kept apart for Shrimant Fatehsinhrao P. Gaekwad could not have been inherited by his mother the petitioner No. 1 on his demise, because, it was already renounced in favour of the respondent No. 1 and his children. Thus, even according to the respondent No. 1, Shrimant Fatehsinhrao P. Gaekwad was entitled to subscribe to the additional share capital, but he renounced his rights in favour of the respondent No. 1 and his children through his Secretary's letter. ....
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....s they liked and as soon as the application money of Rs. 3 lakhs for 3000 equity shares was received, the subscription of additional shares be closed at 10,500 equity shares. Shrimant Fatehsinhrao P. Gaekwad had passed away on 1-9-1988 and a meeting of board of directors was held on 26-10-1988 where the respondent No. 1 and Mr. P.H. Chinoy were present for a condolence resolution. The decision was taken therein for sale of Manav Mandir property of the company for not less than Rs. 50 lakhs and the respondent No. 1 was authorised to finalise the agreement. Similarly, for Kamalja property, it was decided to sell it for not less than Rs. 20 lakhs and it was left to the respondent No. 1 to finalise the agreement. Other important decisions were also taken in the said meeting, but there was no mention made at all to the letter dated 11-6-1988 by which Shrimant Fatehsinhrao P. Gaekwad was said to have renounced through his Secretary his entitlement to 8,000 shares in favour of the respondent No. 1 and his children which was to tilt the balance of power in his favour. Even in the meeting of the board of directors held on 14-3-1989 convened after the alleged allotment made by the Managing C....
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....uity shares, 8,000 equity shares would be allotted to Shrimant Fatehsinhrao P. Gaekwad, 500 equity shares to Smt. Mrunalinidevi, 25 equity shares to Smt. Shubhanginidevi and 6475 equity shares to respondent No. 1 Shri Sangramsinh Gaekwad. It will be seen that these averments were based on a note of Shri N.K.K. Mohammed, Personal Secretary of the respondent No. 1 and the letter dated 29-3-1988 of Shri M.N. Khade forwarding draft minutes of the meeting of 21-3-1988 on the basis of that note, which were annexed at Annexures 'B' and 'C' to the petition. In the type written draft minutes attached to letter Annexure 'C', the words 'and others' are added in hand after the name of the respondent No. 1. On the basis of these words, the respondent No. 1 seeks to derive authority to get shares for his family members also. Here however, it becomes important to see what were the final minutes drawn in respect of the meeting of the committee held on 21-3-1988. It will be noted from the draft minutes that the Managing Committee referred to therein consisted of (1) Shrimant Fatehsinhrao P. Gaekwad, (2) respondent No. 1 Shri Sangramsinh Gaekwad, and (3) Shri P.H. Chinoy. It was during their argumen....
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.... Gaekwad who was shown present as the Chairman of the meeting in the draft minutes, said to have been forwarded under the signature of Shri M.N. Khade, the Company Secretary, on 29-3-1988 to N.K.K. Mohammed, Bombay who was the Secretary to the respondent No. 1, is conspicuously absent in the final minutes. (b)The final minutes of the Committee held on 21-3-1988 show that the respondent No. 1 was in the Chair and the minutes were signed by the respondent No. 1 as the Chairman of the meeting while in the draft minutes Shrimant Fatehsinhrao Gaekwad was shown to be the Chairman of the meeting. (c)In the draft minutes there was no specific reference made to the resolution passed at the Board meeting on 8-1-1988 for issuance of 15,000 equity shares and about the offer letters dated 12-2-1988 having been sent to the shareholders, while in the final minutes these are specifically mentioned. (d)In the draft minutes it was stated that after the discussion the allotment was decided as under:- (i)Shrimant Fatehsinhrao P. Gaekwad - 8,000 shares of the value of Rs. 8 lakhs; (ii)Shrimant Sangramsinh Gaekwad and others (these last two words "and others" are written in hand) 6475 shares of the....
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.... version, the respondent No. 1 has stated in para 11(2)(vi) of his affidavit in reply in the present petition that: "despite his (i.e., Shrimant Fatehsinhrao Gaekwad's) reluctance, 8000 shares were kept apart for him if he chose to subscribe for the same. It is for this reason that the committee meeting of 21st March, 1988 (draft minutes whereof are annexed at page 102 of the petition) specifically recorded that the shares would be allotted as and when amounts are received. At the said meeting it was further decided that 6475 shares would be kept apart for myself 'and others'. Since I was basically handling Baroda Rayon Corpn. and in this company, I was given liberty to either subscribe in my own name or through others including family members, whereas as far as others were concerned they, could be considered only if they themselves made the application personally and not by others". It is further stated by him:"...pursuant to the decision taken on 21-3-1988 by the Managing Committee I and my family members subscribed for 6475 shares which were available to me for subscription. I actually put in the subscription monies and was allotted shares in the period between April and June 19....
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....he meeting of the Managing Committee said to have convened on 10-12-1988. A notarised true xerox copy of these minutes is produced at Annexure "A/3" of the affidavit-in-rejoinder of the petitioner No. 1, read with para 14 thereof. Heavy reliance was placed on behalf of the respondent Nos. 1 to 5 on these minutes in context of letter dated 11-6-1988 written by the Secretary to Shrimant Fatehsinhrao P. Gaekwad, which is referred to therein, by which Shrimant Fatehsinhrao P. Gaekwad is said to have declined to accept the offer of shares contained in the letter dated 12-2-1988, as well as, in respect of allotment of 3,000 shares to the respondent Nos. 4 and 5. These hand-written minutes bear the signature of the respondent No. 1 as the Chairman of the meeting at which the same two directors, namely the respondent No. 1 Shangramsinh Gaekwad and Shri P.H. Chinoy were present. It is recorded in these minutes that in terms of the offer letter dated 12-2-1988 sent to all the shareholders of the company pertaining to the issue of 15,000 equity shares of Rs. 100 each of the company, the response was received only from the four existing shareholders of the company. The Chairman of the company ....
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....ent No. 2 therein) with the sole object of gaining control of the company, that: Although the shares were to be allotted as and when the money came these minutes were written on 10-12-1988". He has denied in para 31(g)(i ) of the said reply the allegation that these minutes of 10-12-1988 were fraudulent or fabricated. In para 31(g)( ix) the respondent No. 1 in response to the allegation that the alleged decision of the Managing Committee of 10-12-1988 was not placed before the Board meeting held on 14-3-1989 and that it was not ratified by the Board has stated thus: "I submit that as the very power of allotment of shares was given to the Managing Committee the question of ratification by the board of directors did not arise. The decision was, therefore, not required to be placed before the board of directors for its ratification or approval". When as per these minutes of the Managing Committee said to have held on 10-12-1988, the Committee took the decision to allot the shares for the first time at that meeting, the theory of the respondent No. 1 that 6475 shares were already allotted by the committee to the respondent Nos. 1 to 5 earlier, stands badly exploded. In the Board's meet....
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.... in view his other signatures on record it is clear that these are rightly not disputed. In fact as noted above the minutes dated 10-12-1988 have been admitted by the respondent No. 1 to be true in his affidavit-in-reply filed on 11-4-1992 in the company Petition No. 7 of 1992 before the CLB. It is obvious that being confronted by the notarised xerox copy of these minutes the respondent No. 1 has tried to avert his embarrassment that they caused as much as possible in the said affidavit-in-reply dated 11-4-1992 after having taken a different stand in the affidavit-in-reply dated 21-3-1991 and his sur-rejoinder dated 22-4-1991 filed in the petition before this Court. 13.3 It will be noted that in the minutes of 10-12-1988, there is no reference to the type of allotment referred in the draft minutes of 21-3-1988 which were forwarded to the Secretary or respondent No. 1 Mr. N.K.K. Mohammed under note dated 29-3-1988 of the Company Secretary. In the minutes of 21-3-1988 which were signed by the Chairman, there was no mention that the shares would be allotted as and when the amounts were received as was contained in the draft of the meeting. There was a firm decision to issue 51 per ce....
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....eeting be prepared on this basis and that the Chairman of the meeting (i.e., the respondent No. 1) had okayed this, has clearly emanated for the first time from the respondent No. 1 through his Secretary who caused the draft minutes being prepared on the basis of that note. Therefore, while in the final minutes of the meeting on 21-3-1988 there was no decision recorded for allotting any shares to the respondent No. 1 or that shares will be allotted in the names as stated in any such requisition note, it appears that by sending the requisition note with a direction issued by an endorsement made thereon by his Secretary at his own instance the respondent No. 1 got the minutes prepared by the Company Secretary Mr. Khade, which were forwarded under a note (Annexure "C" to the petition) to Mr. N.K.K. Mohammed, Secretary of the respondent No. 1 on 29-3-1988 by the Company Secretary, as can be seen therefrom. This course was not open to the respondent No. 1 on the basis of the decision taken at the meeting of 21-3-1988, as recorded in the minutes of that meeting (Annexure A/2 to the petition), which were signed by the respondent No. 1 as its Chairman. 13.4 The minutes book of the Managin....
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....Shri P.U. Rana which were verified by Shri M.C. Vaidya after comparing the same with the original and certified by him as true copies, is a version which deserves to be accepted in view of the notarised copies not only of these minutes but also of the register of members and other documents duly notarised on 10-12-1990 having been produced on the record of this petition. It is clear that on that day all these registers and minute books including the minutes book of the Managing Committee were lying in the Registered office of the company at Baroda even though they may have been sent earlier to the Secretary of the respondent No. 1 on 20-11-1990. The director of the company Mr. P.U. Rana in his affidavit produced at Annexure "5" collectively with the rejoinder of the petitioner No. 1 has stated in paragraph 2 that he did allow the petitioner No. 1 who was a seniormost member of the Royal family to inspect the Register of members, the Register of transfers, the minutes book of the meetings of the board of directors of the respondent No. 6 company, and the minutes book of different committee meetings on 10-12-1990. He also states that he had got the required documents xeroxed and call....
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....pondent No. 1 as per the minutes of the meeting of the Managing Committee dated 21-3-1988 signed as chairman by him the respondent No. 1 who was the director of the company brought about the allotment of such shares to himself and his family members, which were later transferred by the respondent Nos. 1 to 5 to Indreni. Such issuance of shares coupled with blocking of 51 per cent equity shares from devolving on the sole heir of Shrimant Fatehsinhrao P. Gaekwad was obviously intended by the respondent No. 1 to enhance his power and position by allotting shares to himself and his family members. The exercise was obviously intended for destroying the existing majority and creating a new majority of his group. The transfer of the new shares in the Register and issuance of share certificates in favour of the respondent Nos. 1 to 5 was clearly not warranted by any valid decision of the Managing Committee or the board of directors. 13.6 Self-interest is the commonest instance of improper motive leading to abuse of power. Where the question is one of abuse of powers the state of mind of those who exercised power as reflected from the surrounding circumstances and the materials which throw....
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.... be considered to be greater. This precisely was done by the respondent Nos. 1 and 2 who were the directors of the company for their self-aggrandisement and in breach of their fiduciary duty to the company and the shareholders. 14. In the meeting held on 27-12-1989, the respondent No. 1 who chaired it and the other director Mr. P.H. Chinoy took some interesting decisions as reflected from the minutes. The Chairman 'informed' in the meeting where these two alone were present that it was necessary to expand the Board by appointing additional directors "so that the company can get the benefit of their guidance and experience". The chairman, i.e., the respondent No. 1 was authorised to invite his wife - the respondent No. 2 Mrs. Ashra Raje, Mr. Dilipbhai Thakker, Mr. Bhupat Singhji Jadeja and Capt. V.K. Raichand to join the Board as directors. These minutes also indicate that the Board approved the transfer of shares by the respondent Nos. 1, 2 and their son P.S. Gaekwad. There is an indication that no objections were received from the shareholders in response to transfer notices but no particulars regarding the nature of transfer or number of shares of the transferee were mentioned. ....
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....es of the company be approved. By this resolution the transfers of, 1495 shares of respondent No. 2 Smt. Asha Raje, of 2740 shares of the respondent No. 4 Mr. Pratapsinh, 1975 shares of the respondent No. 1 Shri Sangramsinh Gaekwad, 1465 shares of his HUF and 1740 shares of his daughter the respondent No. 5 Priyadarshini were approved and necessary entries in the transfer register and issuance of certificates was authorised to be made by the respondent No. 2 the executive director. These 9415 shares were transferred to a company named Indreni Holdings Pvt. Ltd. (Indreni for short) by the respondent Nos. 1 to 5. 14.2 The minutes of the meeting held on 30-3-1990 are said to have been confirmed at the meeting held on 29-6-1990. At that meeting it was resolved to remove the name of the respondent No. 1 as the guardian of Pratapsinh who had become major. It was resolved to maintain a new share transfer register as directed by the Chairman on the ground that the share transfer register of company was not traceable at the company's office. It was further resolved to approve purchase of 4,000 equity shares of the Baroda Rayon Corporation Ltd. by the company. The meeting of the Board held ....
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....alk about transfer of shares to Indreni in the Board meeting of 13-7-1990 and that there was no Board meeting held on 9-8-1990. He states that he had taken the minute book of the Board meetings to the auditors in or about October/November 1990 and till that time the last minutes written were of the Board meeting held on 3-3-1990 and that no minutes were written in the minutes book of the Board meetings after 30-3-1990 till he went on leave on or about 5-12-1990. He has categorically denied that there was any talk about transfer notices to the shareholders on 13-7-1990. He has denied the allegation of wilful default made by the respondent No. 1 against him and has stated in para 7 of his affidavit that the minutes as now produced were neither true nor correct. He also states that he was present in the meeting of the board of directors held on 29-6-1990 and there was no mention about the transfer register being not traceable or about maintaining a new transfer register. He states in para 9 of his affidavit that he had sent the minute books of the General Meetings, Board Meetings and Committee Meetings under the forwarding letter dated 20-11-1990 to Mr. N.K.K. Mohammed, the Secretary ....
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....nsfer the shares back. All these hurdles were conveniently crossed by resorting to the device of so-called rescission retrospectively recorded in the minutes of 9-8-1990 which is not borne out from the entries in the Register of members even up to 10-12-1990 as is clear from the certified copies taken out on that day of the register of members. Even if Indreni was a company controlled by the respondent No. 1 and his family, in the eye of law it was a separate legal entity and not an existing member of the respondent No. 6 company to whom the shares could have been transferred or by whom they could have retransferred back without a transfer notice. Therefore, transfer of shares to Indreni by the respondent Nos. 1 to 5 was not a transfer to a member. Such a transfer was therefore, clearly impermissible and in violation of the transfer rules contained in the articles of association. This aspect has significance in the present case not from the view point as to who is the owner of these 9415 shares, i.e., respondent Nos. 1 to 5 or Indreni but it has a great bearing on the conduct of the respondent Nos. 1 to 5 and shows that the provisions of articles of association were being violated ....
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....and the share certificates for this purpose on behalf of the company. There was no mention made in the minutes about any instruction to Mr. Khade to make any entries in the register. The version of Mr. Khade is that no such meeting was held on 9-8-1990 and the true copies of register shows that when it was inspected on 10-12-1990, there were no entries of rescission made therein and the shares which were transferred in favour of Indreni by the respondent Nos. 1 to 5 stood in the name of that company which was also paid dividend. In paragraph 9(y) of the affidavit- in-reply of the respondent No. 1 in company petition No. 7 of 1992, it was stated that the register of the members was rectified with retrospective effect from 9-8-1990 before the AGM of 20-12-1990. There is however, no mention of any such retrospective amendment of the register even in the minutes of the Board meeting said to have been held on 10-12-1990, in which the minutes of the previous alleged meeting of 9-8-1990 were confirmed it will be significant to note that though it was recorded in the minutes of the meeting held on 9-8-1990 that leave of absence was granted to the directors Shri P.U. Rana, Shri H.A. Shinde ....
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.... that company by the respondent Nos. 1 to 5. It is obvious from the facts on the record that the story of rescission on 9-8-1990 is thought out with a view to meet with this situation which had reduced the voting power of the respondent Nos. 1 to 5 to only 66 shares at the AGM scheduled to be held on 20-12-1990. 16. It will be seen from the minutes of the AGM convened on 20-12-1990 that the petitioner Nos. 1, 4, 5 and their supporting respondent Nos. 12 and 13 were present at the meeting with Mr. Ajit Gaekwad. Two of the directors Shri P.U. Rana and Shri H.A. Shinde, who according to the respondent No. 1 supported them were also present. The proxy holders of other members supporting that group were allowed to exercise their rights as stated in the minutes. The opposition against the resolutions for electing respondent No. 1 Shri Sangramsinh Gaekwad as the director, proposed by the respondent No. 2 Smt. Asha Raje and seconded by their son (Resolution No. 3), Shri P.S. Gaekwad, for electing Dr. G.M. Oza as a director (Resolution No. 4), for electing respondent No. 2 Asha Raje as director (Resolution No. 5), for electing Dilip Thakkar, Shri Bhupatsinh Jadeja and Shri V.K. Raichand as....
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....s. 3 to 10 and whose members had accepted the ballot papers would, for no apparent reason, refrain from voting so as to bring about a resounding victory for the respondents' group by enabling that group to get the resolutions passed without any opposition. The affidavits of the directors and shareholders who were present at that meeting state that they had all voted at the meeting and the resolution Nos. 3 to 10 were defeated by 1122 to 66 votes. The minutes however, record that shareholders holding 9481 equity shares had cast their votes in favour and none against which is obviously wrong. This means that despite the Court injunctions preventing participation in respect of 9415 shares which stood in the name of Indreni, there was a purported exercise of votes in respect of that share-holding also. The entire exercise reflected from these minutes smacks of a desperate attempt on the part of the respondent Nos. 1 to 5 to tilt the power in their favour in total disregard of the fiduciary nature of the directors powers and to serve their self-interest. 16.1 The minutes of the AGM dated 20-12-1990 record on agenda item No. 4 that a resolution was proposed for reappointing Dr. G.M. Oza....
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....oxy were taken to be the number of his votes, the particulars of which are mentioned therein. It was stated that all the resolutions put to vote, except the resolution in respect of re-appointment of Dr. Oza, which was dropped, were defeated by a majority of 1122 votes. It was further stated that on finding that all these resolutions including re-appointment of various directors including the respondent Nos. 1 and 2 were defeated by majority, the respondent No. 1 took in his possession the register of members proxy register, the appeal papers, proxy forms, attendance register, etc. and threatened others of dire consequences, if he was prevented. It was also stated by Shri P.U. Rana in that letter that he had done nothing wrong in supplying copies of various documents to the shareholders. This letter dated 30-1-1991 was preceded by special notice dated 5-1-1991 convening the Extraordinary General Meeting of 14-1-1991 for removal of Mr. P.U. Rana and Mr. H.A. Shinde. 16.3 In the meeting of the board of directors held on 5-1-1991, as per the minutes the respondent No. 4 Pratapsinh's notice of his intention to move a resolution in the General Meeting for removing the two directors Mr.....
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....ssued which proposed the resolutions for (1) appointment of respondent No. 1 Shri Sangramsinh Gaekwad as a permanent director and Chairman of the company, (2) shifting the Registered office of the company from Baroda to Surat, (3) amending article 14 of the articles of association to enable a member of the company to transfer any share to a company owned, managed and controlled by the existing member of the company or by himself together with members of his family, (4) removal of Shri P.U. Rana as a director of the company, and (5) removal of Shri H.A. Shinde as a director of the company. At the said Extraordinary General Meeting held on 14-1-1991, the respondent No. 1 was the Chairman and the executive director as well as other directors Shri Bhupatsinh Jadeja, Shri P.H. Chinoy, Shri Dilip Thakkar were present. Respondent No. 4 Shri P.S. Gaekwad was also present. No other member was present. At that meeting, as per its minutes, all the above resolutions were passed. This Extraordinary General Meeting was convened on 14-1-1991 by notice dated 5-1-1991 without giving a clear fourteen days notice. 17. It will thus be seen from the above discussion that the respondent No. 1 and his g....
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.... notice was given as per the articles of association nor was it recorded in the Register; (ix)The right of pre-emption guaranteed by the articles of association to the shareholders was thrown to wins by the group of respondent Nos. 1 to 5 and they effected transfers to Indreni without offering the shares to the members first or even without giving a transfer notice to the company which was a must; (x)The respondent No. 1 tried to adopt an ingeneous device for nullifying the effect of the decision to issue 51 per cent of the new shares to Shrimant Fatehsinhrao P. Gaekwad, taken at the Managing Committee meeting of 21-3-1988 which decision was also referred in the minutes of the meeting held on 10-12-1988, were chaired by the respondent No. 1, by creating a story that Shrimant Fatehsinhrao Gaekwad had renounced his allotment in favour of the respondent No. 1 and his children and on that footing managed to allot 3,000 shares to his minor children on 10-12-1988; (xi)The minutes of the meeting of AGM held on 20-12-1990 prepared under the signature of respondent No. 1 as Chairman, did not disclose the correct state of affairs about the outcome of voting by the shareholders and proxies....
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....for the purpose of altering a majority shareholding. Breaches of fiduciary duty by the controlling directors would entitle a minority shareholder to bring an action against them and the Court would be justified in redressing the wrong. If the persons in control of the company have acted in their own interest by allotting shares to themselves or to their associates so as to enable themselves to control the voting at the General Meetings or to enhance their power or position, the members who are unfairly prejudiced by such conduct would become entitled to have the affairs of the company properly conducted according to law. The Court's reluctance to examine business decisions would disappear if it were shown that the directors or controlling shareholders concerned did not make the decision in good faith in the interest of the members of the company as a whole. The Court has ample powers to make such order as it thinks fit to give relief in respect of the matters complained of, and can fashion the remedy to suit the circumstances of a particular case. The Court's jurisdiction in such matters is equitable in character although originating in a statutory provision. In a matter of this ty....
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....the company, in accordance with the articles of association. 5.The aforesaid meeting scheduled to be held on 14-10-2000 will be conducted under the Chairmanship of the Additional Registrar of the High Court Shri V.B. Gandhi. All the shareholders of 425 shares including the petitioner No. 1 as the sole heir of the deceased Shrimant Fatehsinhrao P. Gaekwad in respect of the shares which stood in his name in the register of the members of the company at the time of his demise out of the said 425 shares in respect of which he had voting rights, will be entitled to vote by themselves or through their proxies at the said meeting for appointing the directors of the company. No outsider will be allowed to remain present at the meeting except the Additional Registrar who will Chair and conduct the meeting with his official assistants. The Additional Registrar will be assisted by a Section Officer of the High Court of his choice in the said work. 6. All the shareholders who are parties to the present proceedings are hereby put to notice about the date of the said Extraordinary General Meeting to be held on 14-10-2000 at 11.00 a.m. at the Registered Office of the respondent No. 6 company at....