TaxTMI 
TaxTMI 
2006 (7) TMI 705
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....her records; (h) statutory violations: (i) irregularities in relation to the Investigation Center in the hospital premises of the Company etc.. invoked the provisions of Sections 397 and 398 of the Companies Act. 1956 ("the Act") seeking the following reliefs: i) to appoint an Administrator for - a) regulating the future affairs of the Company; b) leasing/licensing the area earmarked for the Investigation Centre: and c) realizing the outstanding amounts due from the respondent Nos. 2 to 4. 22 and 23 in respect of the Investigation Centre; ii) to declare that the annual general meeting held on 29.09.2005 and the resolutions passed thereon are invalid: iii) to declare that the respondent Nos. 2 to 4 vacated the office as directors under Section 283 of the Act; iv) to declare that the further issue of shares is illegal and void. v) to declare that the election of the respondent Nos. 16 to 23 as directors is invalid; and vi) to declare that the petitioner Nos. 1 to 4 and the respondent No. 14 shall be deemed to have been re-elected as directors 2. Shri T.K. Seshadri. learned senior Counsel, while initia....
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....ing directors of the Company. The petitioners being natives of Thrissur. but settled down abroad have contributed with their family members to the tune of Rs. 1.28 crores by way of share capital. The fourteenth respondent and his family members have invested more than Rs. 44 lakhs towards the share capital and further extended financial assistance for the development of the hospital. The petitioners invested huge amounts ten years back, but no dividend has so far paid by the Company. The petitioner Nos. 1 to 4 and the respondent Nos. 2 to 15 were directors, apart from the existence of two vacancies in the board of the Company till the impugned annual general meeting held in September 2005. The petitioner Nos. 1 to 4 and other Non-resident Indians have been reposing trust and confidence on the second respondent for bringing up the multi specialty hospital, whereas there has been a change subsequently in the attitude of the second respondent to enrich himself and gain exclusive control over the Company to its detriment, as borne out by the following acts of oppression and mismanagement in the affairs of the Company: • The proposal to set up a special Investigation....
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....sharing the profits of the Investigation Centre in terms of the agreement of lease dated 29.12.2001. The partners of West fort Hospital who are directors of the Company deprived the Company of its legitimate share in the income from the Investigation Centre as well as the lawful claim towards monthly rental by taking untenable stand that the payment of monthly rent would arise only, if there is a profit in the Investigation Centre and that the agreement would be considered only in the profit sharing ratio of 80:20. in terms of a communication dated 27.08.2004 of the third respondent. This willful default by West fort Hospital is adversely affecting the profitability of the Company. The conducts of the partners of Westfort Hospital, who are also directors of the Company is against the interest of the Company especially when they owe a fiduciary duty to the Company as directors. Westfort Hospital further failed to meet the electricity consumption charges in respect of the Investigation Centre, which apart from the controversy in sharing the profits of the Investigation Centre, as per the lease agreement came to be deliberated in the board meetings held on 02.04.2004 and 22.12.2004. T....
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....cond respondent as Managing Director of Westfort Travels, without any sanction from the board of directors and without even disclosing his interest, in a manner prejudicial to the interest of the Company and treated the Company as his own. The second respondent by his non disclosure of interest suffered disqualification under Section 299 and therefore, stands vacated the office of director and consequently as Managing Director under Section 283(1 )(i) of the Act by operation of law. • The CLB by an order dated 26.10.2005 restrained the Company from issuing further shares, which came to be modified on 13.02.2006 permitting issuance of further shares on rights basis and further directed the respondents to intimate the petitioners regarding agenda of any board meeting with at least seven days prior notice. This modified order has been released on 14.02.2006. In the meanwhile, the second respondent issued a notice dated 14.02.2006 to the respondent Nos. 7 & 9 convening a meeting of the sub-committee on 15.02.2006. without giving seven days notice to the petitioners as per the order dated 13.02.2006. to transact the issues relating to (i) rights issue : and (ii) share tran....
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....t any justification. The second respondent could not have been issued additional shares by the sub-committee in the absence of any decision by the board of directors on renounced shares. In this connection reliance has been placed on (a) Senthamarai Munusamy v. Microparticle Engineers Private Limited and Ors. and S. Munusamy v. Micromeritics Engineers Private Limited and Ors. (2001) 105 CC 526, wherein this Board held that if further issue of shares results in conversion of a majority into minority or creation of a new majority, then such issue of shares is an act of oppression: (b) Micromeritics Engineers Private Limited v. S. Munusamy (2002) 38 SCL 846 {Madras High Court) to show that directors of a company are in a fiduciary position vis-a-vis the company and that the relationship between the directors and the company is of trustee and cestuique trust. Therefore, the directors must exercise their power for the benefit of the company. If the power to issue further shares is exercised by the directors not for the benefit of the company but simply and solely for their personal aggrandizement and to the detriment of the company, the Court will interfere and prevent the directors fro....
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.... bankers recalling the loans, as could be ascertained from the minutes of the meeting of the board of directors held on 09.07.2005. The notice of annual general meeting does not speak of the funds requirement and the alleged pressure from the Company's bankers. The letters dated 05.12.2005 and 08.12.2005 of the Company's bankers demanding regularization of the loans are procured by the respondents subsequent to the holding of the disputed annual general meeting and filing of the petition and must, therefore, be ignored. No such letters issued, if any. at any prior point of time have been produced by the second respondent. There is no pressure from the bankers, as sought to be made out by the second respondent. • The respondent Nos. 7 & 9 were elected as members of the subcommittee in terms of the minutes of the meeting of the board of directors dated 23.01.2006 and accordingly served with notice regarding a meeting of the sub-committee on 15.02.2006 to consider share allotment and transfer. However, the sub-committee which reportedly allotted further shares is constituted only by members of the respondent group namely, the respondent No. 2, 3, 16, 18 to 20 and....
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....rnakulam, Kochi, Richur, Mumbai etc. which is quite improbable without any supporting evidence. Any proof of service of notice by certificate of posting must be viewed with suspicion in view of the fact that certificates of posting are notoriously "easily" available and that the certificate of posting is suspect and it does not amount to conclusive proof of service of the notice on any of the addressees mentioned therein, as held in M.S. Madhusoodhanan v. Kerala Kaumudi (P) Ltd. The apex court in Mst. L.M.S. Ummu Saleema v. B.B. Gujral and Anr. - held that the certificate of posting might lead to a presumption that a letter addressed and posted, reached in due course the addressee concerned, which is only a permissible and not an inevitable presumption. In S. Narayanan and Ors. v. Century Flour Mills Limited and Ors. (1987) 1 CLJ 25 - it has been held that it is not always safe to trust mere certificate of posting. It will only show that certain postal envelopes were put into the post office. Mere posting by itself will not necessarily mean that there was service on the address concerned. It is highly risky to place reliance upon the mere certificate of posting. A notice may be pro....
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....oving the issue of further shares by a simple majority is contrary to law and invalid. Even if the annual general meeting has been conducted lawfully, it is oppressive of the petitioners and liable to be set aside. • There are sixteen directors excluding the respondent Nos. 2 & 3 who are permanent directors. By virtue of article 88 one third of the sixteen directors are liable to retire at each annual general meeting. While the notices for the 7th. 8th. 9th and 10th annual general meetings, containing the business in relation to appointment of directors consistently give details of the retiring directors, their eligibility and willingness for re-appointment, the notice dated 24.08.2005 convening the eleventh annual general meeting does not disclose such details, in terms of Section 173 enabling the shareholders to form their judgment to elect their directors. However, the director's report gives the names of the directors who retire by rotation at the eleventh annual general meeting. At the annual general meeting, eight directors were appointed as against the six directors retired. The election of directors to the two vacancies has been conducted without any notic....
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....oting. Thus resolution arises from a motion moved at a meeting. A.M. Chakraborti on '"Company Notices, Meetings and Resolutions" reports that a motion is proposed by one member and seconded by another. It does not. however, require a seconder unless required by the articles. To put it in a nutshell, there is no resolution without motion. These requirements are not satisfied in any of the impugned resolutions. The eight directors so appointed in contravention of the statutory provisions are harsh and illegal adversely affecting the affairs of the Company. By virtue of proviso to Sub-section (2) of Section 263. the retiring directors shall be deemed to have been automatically re-appointed as directors of the Company. The petitioners grievance is improper election of directors and not in relation to any directorial complaints. The rights of a shareholder would include the right to elect directors and thus to participate in the management through them, as held in Life Insurance Corporation of India v. Escorts Limited and Ors. (1986) 59 CC 548. In this context, conduct and motive of the parties assume relevance. The respondent Nos. 16 to 21 became shareholders by unlawful means. One....
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....ld on 22.12.2004 would indicate that directors noticed the discrepancies recorded in the minutes book and those circulated to the members. However, such recording of discrepancies appearing in the minutes dated 22.12.2004 produced by the petitioners are not reflected in the very same minutes dated 22.12.2004 produced by the second respondent (page 1 17 of vol. A1). The copy of the minutes of the board meeting held on 24.08.2005 produced by the second respondent along with the application No. 145/2005 does not contain any serial numbers, while the copy of the very same minutes produced by the respondent Nos. 1 & 2 at the time of hearing of the company petition bear serial numbers, which evidences the extent of manipulation indulged by the second respondent. The board of directors at the meeting held on 22.12.2004 decided (a) to sign the minutes book by all the directors present and (b) circulate a copy to the directors within 24 hours in order to avoid discrepancies in the recorded minutes. The second petitioner, therefore, suggested at the board meeting held on 29.03.2005 for appointment of a separate Chairman to avoid any such controversies. The grievances of the respondent Nos. 6....
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....ioners both in the board and at the general meetings of the Company thereby tightening the grip of the petitioners on the management of the company in a manner not resorted to before would amount to an act of oppression: (c) even if the oppression is not of long duration but its effect is continuous and persistent, intervention of the Court is warranted: (d) where the majority is eclipsed both on the board and at the general meeting of the company, by the manipulations of the respondent, it is a fit case of winding up under the just and equitable grounds: and (e) any visible departure from the standards of fair dealing, and a violation of the conditions of fair play on which each shareholder who entrusts his money to a company is entitled to rely would constitute oppression. • Shanti Prasad Jain v. Kalinga Tubes Limited (1965) Vol. 35 CC 351 - to show that (a) where conduct is burdensome, harsh and wrongful: and (b) lack of confidence between the majority shareholders and the minority shareholders springs from oppression of a minority by a majority in the management of the company's affairs, involving an element of lack of probity or fair dealing to a member....
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....anced on behalf of the petitioners and further submitted that his client has already withdrawn the civil suit challenging the further issue of shares and election of directors at the eleventh annual general meeting of the Company. 5. Shri K..P. Dhandapani. learned Counsel appearing for the respondent Nos. l & 2 submitted: • Westfort Hospital constituted by the second respondent and his family members have been running a hospital since the 1989 independently, while the Company has been promoted in the year 1994 establishing a high specialty hospital by the respondent Nos. 2 & 3. who are the promoter directors. These respondents are permanent directors and are not liable for retirement and cannot be removed from the board as envisaged in article 87. At each annual general meeting one third of the remaining directors for the time being are liable to retire by rotation. Section 397 does not define "oppression". The acts complained of in the present petition do not in any way constitute oppression, in the light of the decision of the apex court in Shanti Prasad Jain v. Kalinga Tubes Limited -. Accordingly, what is oppression is left to Courts to decide on....
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....nath Swarup Mathur and Ors. v. Har Swarup Mathur and Ors. (1970) 40 CC 282 held that interference in internal management of companies should take place only on good and compelling grounds. The powers of the court under Sections 397 & 398 are designed for removal of an existing and not past oppressive or prejudicial course of conduct of the affairs of the company. They are primarily intended for preventive purposes. The object of the exercise of those powers is either to prevent a winding up or to remove the continuation of harm or reasonable probability of injury to the interests of the company or to the wider public interest. • The purported acts even if illegal may not be oppressive, in support of which reference has been made to Needle Industries (India) Ltd. v. Needle Industries Newey (India) Holding Limited - (1981) 51 CC 43, wherein it has been held that (a) every action in contravention of law may not per se be oppressive for the purpose of Section 397 of the Companies Act. 1956; (b) a resolution passed by the directors may be perfectly legal and yet oppressive and conversely a resolution which is in contravention of the law may be in the interests of the share....
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....f the company in accordance with the provisions of the Companies Act. Whereas the petitioners have been pressurising the second respondent to induct their own nominees on the board of the Company. ? The first petitioner approved the draft notice of the annual general meeting and the petitioners have sent consent letters to act as directors, which would show that they are aware of the eleventh annual general meeting as well as the proposal for election of directors and further issue of shares, which was necessitated on account of the pressures exercised by the bankers to regularise the loans. The shares to which the petitioners are entitled are kept in abeyance, which can be subscribed by them. • The proposal for issue of duplicate share certificates to Purushottaman and transfer of shares by Purushottaman to others were unanimously approved at the board meeting held on 24.08.2005. to which the first petitioner was a party and therefore, estopped from questioning these transactions. The concurrence of the first petitioner would amount to consent given by other NRI directors. There is no proof of violation of any statutory provisions of law. When the proposal t....
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....psed. Consequently, the second respondent could not produce the records for authentication by the Commissioner. There has been no manipulation of records as sought to be made out by the petitioners. • There were six directors retiring by rotation at the annual general meeting held on 29.09.2005 out of twenty directors and two vacancies were remaining unfilled. Special notices given by the eight directors showing their intention of candidature for directorship were received by the Company after the issue of notice of the annual general meeting but before 14 days of the date of annual general meeting. As per the provisions of the Act. what is required is advertisement in two newspapers, one in Malayalam and one in English having circulation where the registered office of the Company is situated. Malayalam daily Deepika and English daily Indian Express are the media of advertisers. The use of ballot papers, which has been the practice of the Company, is in no way illegal. The illegality pleaded in election of directors is not either explained or established. The respondent No. 14 attended the annual general meeting and none of the members who participated at the meeting ....
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.... of the Companies Act. (English Companies Act) • Re Bellador Silk Ltd (1965) 1 All E.R. 667 - to show that the presentation of the petition in order to bring pressure for achieving a collateral purpose is an abuse of the process of the Court. • Srikanta Datta Narasimharaja Wadiyar v. Sri Venkateswara Real Estate Enterprises Pvt. Ltd and Ors. (1991) 72 CC 211 - to show that the relief under Section 397 and 398 of the Companies Act. 1956. is an equitable relief which is entirely left to the discretion of the Company Court. Because of the equitable and therefore, discretionary character of the court's jurisdiction, the requirement of good faith on the part of the petitioner is necessary. The question of good faith has to be tested by the conduct of the petitioner as reflected not only in the proceedings before the company court but also in parallel proceedings in civil courts and in other civil litigations in other courts. Even if the allegations of the petitioners, if proved, do make out a case of oppression and mismanagement within the scope of Sections 397 and 398 of the Act. mere proof of those allegations would not entitle the petitione....
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....4.12.2001 the timely financial support rendered by the petitioner Nos. 1 to 4 and the respondent No. 14 in his following words: ...we have inducted eight Professionals considering the need for their expertise for the day-to-day running of our systems. After a lot of discussions as well as faith all these Directors invested more than what I expected. Of course you 6/7 Directors financially supported as and when problems arose in our Project. I am fully satisfied and thankful to each one of you Directors especially Dubai & Sharjah Directors and I cannot forget the timely support extended by Sharjah & Dubai Directors. The board of directors at its meeting held on 04.07.2005 after due deliberations decided to induct two directors, who can contribute Rs. 50 lakhs each towards share capital of the Company in order to case the financial crunch and develop facilities in the hospital. It is thus, far from doubt that the second respondent has been heavily depending upon the financial backup provided by the Non-resident Indians on the understanding to offer directorship to such contributors. The articles do not envisage any concept of NRI directors, but the correspondence on....
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....cording to the respondent Nos. 1 &. 2 the share allotment and transfer committee convened a meeting on 14.02.2006 and allotted further shares to the tune of 9,72,400 on rights basis in favour of the second respondent, his wife and children and 25000 shares to his brother-in-law, apart from allotting 4,76,000 shares in favour of 21 other shareholders, including the newly inducted directors being the respondent Nos. 16 to 23. It has been asserted at the time of arguments that the respondent Nos. 7 & 9 being members of the share allotment and transfer committee were not associated at the time of allotment and transfer of shares reportedly transacted on 14.02.2006 by the committee. This assertion has neither been repudiated nor explained by the respondent Nos. l & 2. It is absolutely relevant to observe that when the petitioners mentioned on 15.02.2006 for stay of operation of the order dated 13.02.2006. the respondent Nos. 1 & 2 never even whispered about the purported allotment of further shares on 14.02.2006 to the tune of Rs. 147 lakhs and the transfer of shares. The Company did not choose to forward a copy of the agenda of the meeting of the share allotment and transfer committee ....
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.... decided to hold the annual general meeting on 29.09.2005 and approved the draft notice incorporating the particulars as to date, place and time of the meeting. The petitioner Nos. 1 to 4 forwarded their consent letters in favour of the second respondent offering themselves for re-appointment, if elected at the annual general meeting. The petitioners felt that "the annual general meeting of the Company was a routine affair" as borne out by the averments made in the company petition. The respondent No. 14. who has been apparently acting in association with the petitioner Nos. 1 to 4 in the affairs of the Company and the respondent Nos. 6 to 9. reportedly the neutral directors, participated in the annual general meeting held on 29.09.2005. The sequence of events would indicate that the petitioner Nos. 1 to 4 must be aware of the annual general meeting held on 29.09.2005. However, whether mere knowledge of the meeting would tantamount to serving notice in terms of Section 172 has to be considered. This section provides that notice of every meeting shall be given, among others, to every member of the Company whose name appears on its register of members. It is settled law that the prov....
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....al meeting or any other meeting, an explanatory statement setting out the material facts concerning each such item of business shall be attached to the notice of the meeting. This requirement is mandatory and any disobedience to its requirement will lead to the nullification of the action taken in pursuance of such a resolution. Any bare knowledge of the petitioners and other shareholders filed by these respondents before this Bench on 15.03.2006 that the impugned shares have been allotted on 14.02.2006. Thus, the impugned allotment of further shares is not in strict consonance with the order dated 13.02.2006. The alleged irregularities in convening, holding and conducting the eleventh annual general meeting of the Company and the consequences thereof, being the main bone of contention between the parties are now being considered by me. The notice dated 24.08.2005 convening the annual general meeting, contains for transaction, the following business: i) to increase the authorized share capital from Rs. 9.20 crores to Rs. 12 crores divided into 1.20 crores equity shares of Rs. 10/- each: ii) to accord consent of the Company under Section 81( 1 A) to offer or issue ....
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.... addressees. It is not always safe to place reliance on mere certificate of posting, in the absence of any other corroborative evidence such as dispatch register, books of account, reflecting the expenses incurred in connection with sending of notices to the petitioners and other shareholders. It will only show that certain postal envelopes have been put into the post office and will not by itself necessarily mean that there has been service on the addressee concerned. The Supreme Court in (a) M.S. Madhusoodhanan v. Kerala Kaumudi (P) Ltd: (b) Mst. L.M.S. Ummu Saleema v. B.B. Gujral and Anr. and (c) S. Narayanan and Ors. v. Century Flour Mills Limited and Ors. (supra) refused to place any credentials on mere certificate of posting. It is. therefore, far from doubt that mere production of certificates of posting will not necessarily mean that there was service of notice of the meeting on the petitioners. By virtue of Section 173(1)(a) any business other than ordinary business transacted at an annual general meeting is called special business. Thus, the business relating to the further issue of shares transacted under Section 81(1A) at the annual general meeting held on 29.09.2005....
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....ory statement are general in nature and lack details. It will not be possible for the shareholders, without particulars of funds requirement as well as utilization of such funds to form their opinion in order to subscribe for the shares proposed to be issued by the Company. In this context, the Unlisted Public Companies (Preferential Allotment) Rules, 2003 assumes relevance. Rule 6 contemplates that any explanatory statement as required by Section 173 shall contain the following particulars: a) the price or price band at which the allotment is proposed: b) the relevant date on the basis of which price has been arrived at; c) the object/s of the issue through preferential offer; d) the class or classes of persons to whom the allotment is proposed to be made e) intention of promoters/directors/key management persons to subscribe to the offer f) share holding pattern of promoters and others classes of shares before and after the offer g) proposed time within which the allotment shall be completed; whether a change in control is intended or expected. The particulars as required u....
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.... 88: At each annual general meeting of the Company, one-third of remaining directors, i.e. other than the promoter directors are liable to retire by rotation. Article 89: The Directors to retire by rotation at every annual general meeting shall be those who have been longest in office since their last appointment, but as between persons who became Directors on the same day those to retire shall in default of and subject to any agreement among themselves, be determined by lot. Article 90: Even resolution of a general meeting for the appointment of the director shall relate to one-named individual only except as permitted by Section 263. Article 91: The Company at the annual general meeting at which the director retires by rotation may fill-up the vacated office by appointing the retiring director or some other person thereto. This article further prescribes the procedure in the event of the office of retiring director is not filled up at the meeting. As at the disputed annual general meeting of the Company, there were 18 directors on the board, out of which the respondent Nos. 2 & 3. being promoter directors are not liable for retirement. Thus, si....
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....rved from copies of the ballot papers used at the annual general meeting held on 29.09.2005 that the resolutions for the appointment of directors were voted separately by members, but minutes of the annual general meeting reveal that the appointment was made by a single resolution, which reads thus: The poll was conducted immediately and after scrutiny, the results were declared as follows: Directors re-appointed: Nil Directors Appointed : Dr. V.K. Gopalan, Dr. Devi Mohan, R. Ragunandan, K.S.R. Chandran, P.A. Anirudhan, Adv. M.G. Rageev, Dr. M.G. Subramaniam Danesh Mohan. It is clear that the single resolution approving the appointment of eight directors is not in consonance with article 90 and Section 263 and cannot be valid. The resolution does not reveal the proposer or seconder, in line with the commonly accepted practice, as demonstrated by Shri T.K. Seshadri, learned Senior Counsel or who are the six out of the eight directors replaced the retiring directors or who are the remaining two directors appointed at the annual general meeting filling up the vacant situation. When the appointment of directors is discovered to be invalid, their subs....
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....nts. When a shareholder is deprived of his lawful privilege and right it will be an act of oppression on such shareholder as affirmed by the Madras High Court in Micromeritics Engineers Private Limited and Microparticle Engineers Private Limited and Ors. v. S. Munusamy and Anr. (supra). The Company leased out a portion of the hospital premises, by virtue of an agreement of lease dated 29-12-2001. in favour of Westfort Hospital to set-up and manage the Investigation Centre on certain terms and conditions. While the Company claims the lease rent of Rs. 50.000/- per month plus 20% of the net income from the investigation center, the third respondent as partner of Westfort Hospital made it categorically clear to the second respondent in her letter dated 27-08-2004 that the demand towards rent plus profit is totally contradictory to the agreement of lease. In this connection, it is relevant to observe that the second respondent in his communication dated 28-01-2002 reiterated that "the partnership firm would pay to the Company Rs. 50,000/- per month as lease rent and net profit not exceeding 20% from the total income of the Investigative Centre". The deliberations at the Board ....
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....mpany held on 24-08-2005, against execution of the indemnity bond by him. There is no record to show that duplicate share certificates were issued by the Company on the very same date namely. 24-08-2005. However, the resolution passed at the board meeting held on 24-08-2005 shows that the transfer of shares by Purushottaman to other shareholders including the respondent Nos. 16 to 21 was unanimously approved. The first petitioner is no doubt is a party to the proceedings of the board meeting held on 24-08-2005. Nevertheless, it has to be borne in mind that the transfer of shares without issue of duplicate share certificates would be in contravention of the mandatory provisions of Section 108 and cannot be valid in which case the election of the respondent Nos. 16 to 21 to the office of director would be hit by article 77. This article envisages that the directors of the Company are required to hold 2500 equity shares in the Company as qualification shares. It is not the case of the Company that these respondents apart from the impugned shares are holding any shares in the Company. There is neither material to show that they have acquired qualification shares within two months alter....
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....of the minutes of the very same board meeting produced by the Company does not contain such recitals regarding discrepancies noticed recorded in the minutes of the meeting of the board of directors held on 29-09-2004. The minutes of the board meeting dated 24-08-2005. a copy of which is filed along with the company application (C.A.No. 145/2005) does not carry any serial numbers. At the same time, the very same minutes produced along with the counter affidavit filed by the respondent Nos. 1 & 2 do contain serial numbers. Though Shri Dhandapani. learned Counsel submitted that what has been produced along with the company application is only draft minutes, yet I do not find any such stand taken by the respondents at the time of advancing arguments on the company application. Similarly, none of the minutes of any meeting forming part of the company petition do not bear any serial number. It is not the case of the respondents that all those minutes are not fair minutes. Article 98 stipulates that the minutes of the board meeting and general meetings shall be kept in accordance with Section 193 of the Act. Section 193 provides, inter-alia that within 30 days of the conclusion of the mee....
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....their legal and proprietary rights as shareholders, as held in Needle Industries (India) Ltd. v. Needle Industries Newey (India) Holding Limited (supra). It is far from doubt that the issue of further shares and the election of directors being violative of several of the statutory requirements, which could be characterized as unfair and improper warranting interference of the court and now the CLB under Section 397 or 398 as held V.J. Thomas Vettom v. Kuttanad Rubber Co. Ltd. and K.M.J. Joseph and Anr. v. Kuttanad Rubber Co.Ltd. (supra). This conduct complained of by the petitioners, without any doubt, does relates to their status as shareholders and all their grievances are in the capacity as shareholders, entitling them for appropriate relief as held by the English Court in Re Lundie Brothers, Ltd. and the Indian Court in R. Ramanathan Chettiar v. A. & F. Harvey Ltd. and Ors. (supra). In the light of the categorical statement made at the bar by Shri T.K. Seshadri. learned Senior Counsel that the petitioners are prepared to lose the office of director provided the election is properly and lawfully conducted by the respondents, the plea of the latter that the present petition has b....