2005 (1) TMI 409 - SUPREME COURT

Whether the Appellant No. 1 in his capacity as Director of the Company had a fiduciary duty towards the shareholders?

Whether there has been a valid decision to broad-base the company by issuing additional shares?

Whether the allotment of 6475 shares and 3000 shares in favour of the Appellants herein was valid in law?

Whether the Respondent No. 1 herein could claim title in respect of 8000 shares in the petition filed under sections 397 and 398 of the Companies Act?

Whether transfer of 9415 shares in favour of Indreni by the Appellants was valid and if not the effect thereof?

Whether the issue of oppression and/or mis-management on the part of the Appellant No. 1 herein in running the affairs of the company towards the Respondent Nos. 1 and 12 have been proved?

Held that:- Appeal allowed in part. The allotment of shares from the additional share capital had been increased pursuant to the resolution of the Extraordinary General Meeting held on 17-12-1987, and the resolution of the Board of Directors dated 8-1-1988 shall be treated as valid and effective except the allotment of 3000 shares in favour of Pratapsinh S. Gaekwad and Priyadarshiniraje S. Gaekwad and 500 shares in favour of Respondent No. 12 herein. The register of the members and other records of the company will stand rectified accordingly.

The Board of Directors shall consider the question as regard shifting of the office of the Company to Surat from Baroda. The records of the company, if any, in possession of any of the members or any other director shall be restored to the Registered Office of the Company with defined meeting will be conducted under the Chairmanship of a nominee of the Registrar of the Companies.

All the shareholders will be entitled to vote by themselves or through their proxies at the said meeting for appointment of the directors of the company. The Registrar of the Companies shall for the purpose of holding the said meeting shall issue notices thereof to the shareholders and may get the said notice published in newspapers one in English and one in Gujarati having circulation in the area.

Costs of publication and issuance of such notice shall be borne by the company. Appellant No. 1, however, shall deposit a sum of ₹ 30,000 before the Registrar of the Companies within two weeks from date for meeting the requisite expenditure thereof.

The Appellant No. 1 shall further supply the names and addresses of the shareholders of the company to the Registrar of company within two weeks from date.The Registrar of the Companies or his nominee shall be entitled to seek assistance for peaceful conducting of the meeting from such authority or authorities as may be considered necessary.No adjournment motion may be entertained.