TaxTMI 
TaxTMI 
2007 (8) TMI 467
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....putes with the appellants. In the month of December, 2001, the respondent files a petition No. 2 of 2002 under sections 397 and 398 of the Companies Act, 1956 before the Company Law Board, New Delhi against the Appellants. 3. On 27-1-2005, by the impugned order the CLB though holds that no case of oppression has been made out by the respondent, yet directed the appellants to purchase the shares of the respondent. Hence the appeal. 4. The relevant conclusion as arrived at by the CLB is as under :- "36. I find that the petitioner has been indulging in forum shopping and she was aware of everything happening in the company till the dispute arose after March, 2000. Now when the relationship in the two groups have soured, the petitioner has r....
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....ling to part with her shares, the shares will be bought by the respondent at the fair price to be fixed by a valuer to be appointed by this Board. The valuation will be based on the balance sheet of the respondent-company as on 31-3-2001. In case the petitioner desires to go out of the company, then on an application made by her, a suitable valuer will be appointed by this Board in consultation with both the parties." 5. The learned counsel appearing for the appellant has relied on the following cases :- 1.Hanuman Prasad Bagri v. Bagress Cereals (P.) Ltd. [2001] 33 SCL 78 (SC). 2.Jaladhar Chakraborty v. Power Tools & Appliances Co. Ltd. [1994] 79 Comp. Cas. 505 (Cal.). 6. The learned counsel appearing for the respondent has relied on th....
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....t-company. All directors of the company and Mr. Rajesh Shah, the husband of the respondent, had given their personal guarantee for repayment of the loans. The respondent, however, moved the petition on allegation of siphoning and misusing funds by the appellant-company after March, 2000. 9. After considering the material placed on record and written submissions filed by the parties, the CLB has dealt with all the aspects which culminated by answering four major issues, viz., 'breach of collateral security given to MSFC', 'alleged misappropriation of sale price of DEPB licensee', 'diversion of company business to M/s. Vardhaman Impex (P.) Ltd.', and 'allegation of unsecured loans and advances'. 10. The undisputed position on record as righ....
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....ll as her husband who was acting at the relevant time, as a Chartered Accountant, were fully aware of all the transactions and in fact participated in all such transactions, cannot agitate the same foundation for the relief as prayed in the petition. The operative part, therefore, in view of the above facts and reasoning is contrary to the provisions of sections 397 and 398 of the Companies Act. The appellant, therefore, has made out her case to interfere in view of the directions as given by the CLB. 13.The directions compelling the company to purchase the shares of the respondent/petitioner, in the facts and circumstances of the case, is abuse of the process of the CLB. Such directions are, therefore, contrary to the law and impermissibl....
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....isions and examine the position, i.e., to see as to whether a particular allegation is oppression under section 397 or of the mismanagement under section 398. (c )Even if case under section 397 is not made out and the allegations are such as which would bring the case under section 398, appropriate directions under section 398 read with section 402 can be issued. (d )Even if a case of oppression is not made out, in exercise of its equitable jurisdiction, the court can grant relief and pass the necessary orders. This would normally be in those cases where two sets of shareholders cannot do business together and have been fighting litigation for years and there is lack of probity amongst the parties and the court is of the opinion that a pe....
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....18.The Apex Court judgment relied by the learned counsel appearing for the appellant in Hanuman Prasad Bagri's case (supra) squarely covers the submissions as raised that 'if the facts fall short of the case set out for winding up on just and equitable grounds, no relief can be granted to the petitioners.' Further Jaladhar Chakraborty's case (supra) also supports the case of the appellant specially the observation in the following para :- "The last question to be decided in this matter is whether the Court can compel the company or the respondents to purchase the shares of the petitioner. As noted above the petitioners are willing to sell their shares in the company at market value. The offer is not acceptable to the company or the respond....