TaxTMI 
TaxTMI 
2016 (4) TMI 615
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....ated by Mr. Jyoti Basu, the Chief Minister of West Bengal. In its application to the Secretary, Department of Industrial Development, Ministry of Industry made on 31st May, 1993 for approval of Foreign Non-resident Indian Investment in the public company which owned the hospital (Ruby General Hospital Limited), it was stated that the Non-resident Indian (NRI) shareholding in the company would be subject to a ceiling of Rs. 8,00,00,000/-, not exceeding 88.88% of the total shareholding and was to be on repatriable basis. Now, "repatriable basis" and "non-repatriable basis" are different. According to Sajal who is now prosecuting this writ application, the investment had to be on repatriable basis. These expressions assumed significance at the time of allotment of shares of the company between Kamal and Sajal. Kamal, being a doctor was interested in causing to be sent to the company second hand medical equipments to be used in the hospital. The value of the equipments was stated to be as Rs. 3,05,53,290/-. Kamal wanted this money to be treated as share application money on the basis of which shares in the company would be allotted to him. This, in foreign exchange terminology was inv....
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.... challenging the permission granted by the Reserve Bank of India. On 20th May, 1998 the permission was withdrawn. This Court directed personal hearing to be given to the parties before passing any order. The Reserve Bank of India once again endorsed its earlier approval of allotment of shares in favour of Kamal. A second writ followed. Once again the High Court directed re-hearing by the Reserve Bank of India. Once again, the bank on 7th May, 2004 confirmed its order granting permission to allot shares to Kamal against supply of second hand medical equipments. The present writ is the third writ. This Court directed, as an interim order, that any allotment of shares to Kamal would abide by the result of the writ. It was filed in the year 2004. For thirteen years it is pending. Meanwhile, Kamal on or about 12th November, 1997 moved the Company Law Board complaining against Sajal that his action was oppressive to him. It inter alia held that allotment of shares to Kamal on account of importation of second hand medical equipments would abide by the result of the pending writ application in the High Court. On 29th October, 1999 the Company Law Board allowed the petition before it by i....
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....ime, he was only a shareholder in the company. In 2007, the respondent no. 6 made an application in the writ being no. (G.A 360 of 2007) wanting dismissal of the writ in the changed circumstances. One of the grounds taken in the application was that Sajal as the shareholder did not have the locus standi to maintain the writ. In the case of Calcutta Gas Company (Proprietary) Limited, Versus State of West Bengal and others reported in AIR 1962 SC 1044, Mr. Justice Subba Rao said that a person could prefer an application under Article 226 of the Constitution of India to enforce a fundamental or a legal right. The right should belong to the petitioner. It should be a personal or individual right (See Paragraph 5). In the famous case of Rustom Cavasjee Cooper (in W. ps Nos. 222 and 300 of 1969). 2. T.M. Gurubaxani (in W.P. No. 298 of 1969) Versus Union of India reported in AIR 1970 SC 564, Mr. Justice Shah analysed the status of a company as a legal person and that of a shareholder as merely having an interest in the company under its articles and a director being an agent for managing it. Hence, a shareholder did not have the right to move a writ application on behalf of the company ....
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....another reported in AIR 1973 SC 602 also cited by Mr. Mookherjee (see also Bennett Coleman and Co. Ltd. & Others. V. Union of India reported in AIR 1973 SC 106 also cited by learned Counsel). In The Press Trust of India and another v. Union of India and others reported in AIR 1974 SC 1044 the Supreme Court spelt out certain governmental actions which would affect the company as well as its shareholders. "It appears to us that though it may be that no specific mention has been made in the petitions of any of the Articles which are alleged to have been infringed by the impugned order, the facts stated and the contentions urged in the petition entitle the petitioners to invoke also Article 19. A shareholder can challenge the order if the restriction on his right under Article 19 (1) (f) is unreasonable. If the impugned order places a heavy burden on the resources of the company or the wage has been fixed without taking into consideration the capacity to pay, or where the higher wage than what the journalists asked for is fixed without hearing the employer, then that burden will affect the shareholders also. In such a case it will not be valid to contend that the right of a shareholde....
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....this company there are principally only two shareholders. Allotment of shares to Kamal would have tipped the balance of control of the Company in his favour. Therefore, Sajal was likely to be directly affected by the allotment of shares to Kamal. Therefore, even after deletion of the name of the company, continuance of the proceeding by Sajal was permissible. In other words, the Reserve Bank of India may have given permission to the company to import medical equipment on its application. It also may have allowed the company to issue shares to Kamal on a non-repatriable basis for financing this equipment. Undoubtedly, the Company would be affected by any decision of the Reserve Bank of India to grant licence or to revoke it. It is also equally true as held by the Supreme Court in LIC v. Escorts Limited reported in (1986) 1 SCC 264 that the Reserve Bank of India is the sole judge of whether the licence is to be granted or not and no other authority can take this burden upon itself. But, on examination of the above facts the licence to import was vitally connected with the shareholding of Kamal Kr. Datta and the percentage shareholding of his brother Sajal Datta. If the number of sh....
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....the company, is oppression being squarely covered by Section 397 (1) (b) of the Act. These attempts speak volumes in the subtle design on the part of Respondent 2 to somehow see that the holding of Appellant 1 from the office of the Managing Director by purchasing majority of shareholding pursuant to the resolution passed on 19.4.1995; he wanted to con troll the entire company. The filing of repeated writ petitions in the Calcutta High Court at the expense of the company adversely affected the interest of the company. If this is not the oppression of the member under Section 397 and bringing material change in the management under Section 398 then what could be the better case than this. As we fail to understand the view taken by the learned single Judge of the High Court directing the appellants to file suit for redressal of all grievances, we cannot sustain this order. We are of the opinion that the view taken by the Calcutta High Court cannot be sustained. We are satisfied that this is the case of oppression of the member as well as would amount to bringing about material change in the management of the company." In my opinion, the Supreme court did not even go into the ques....
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....the Act hereby repealed shall, in so far as it is not inconsistent with the provisions of this Act, be deemed to have been done or taken under the corresponding provisions of this Act; Mr. Kapur submitted that after the sunset period of two years, which is long over, no irregularity or illegality in the purchase of second hand medical equipments by the company could be alleged or proved. Moreover, after repeal of FERA, no permission was required to import medical equipments. Therefore, assuming that any equipment was illegally imported before that period, in the absence of any action it became legally imported after the sunset period. Mr. Mookerjee, learned Senior Advocate appearing for the writ petitioner submitted that the rights of his client under Section 6 of the General Clauses Act, 1897 were preserved despite the sunset provision. There is no dispute that no permission is required from the Reserve Bank of India to allot shares on importation of capital goods to Non-Resident Indians, under the Foreign Exchange Management Act, 1999. Now, even if I assume that the decision dated 7th May, 2004 was wrongly made by the Reserve Bank of India and also assume that the Foreign E....
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.... under FERA, 1973 were preserved and for how long need to be investigated. Neither adjudication of penalty nor criminal prosecution can be undertaken as the period of two years from the date of commencement of the 1999 Act has long elapsed. Either a civil proceeding for penalty had to be started by issuance of a show cause notice or cognizance of the offence should have been taken by a criminal court within two years of commencement of the Act, 1999, under Section 49 of FEMA, 1999. Since it came into effect on 1st June, 2000 any action should have been taken by 31st May, 2002. The preservation of old rights and liabilities under the FERA, 1973 was restricted for this period and to this extent only. At this point of time, even if it is assumed that the importation was wrongful, no action can be taken, by operation of law. If a new statute after repeal of an Act does not contemplate any action in relation a past illegal act under the repealed statute, then the new statute has the effect of legitimising that illegality. Mr. Justice Krishna Iyer said in Rameshwar and others v. Jot Ram and others reported in AIR 1976 SC 49 that the Court had to take note of the change in law. Further....