2011 (9) TMI 842 - SUPREME COURT

Oppression and mismanagement – Memorandum of Understanding was entered into between WBIDC and the Chatterjee Petrochem (Mauritius) Company - It was decided that both WBIDC and CP (M) C that in case of disinvestment by WBIDC, the disinvested shares would be offered to CP (M) C – violation of condition - HPL had approved the issuance and allotment of equity shares worth ₹ 150 crores at par to Indian Oil Corporation (IOC) - Company would continue to retain its private character and the Chatterjee group would have control over its management, such promises, although, reduced into writing in the form of agreements, not only remained unfulfilled, but even the character of the Company was altered with the transfer and sale of 150 million shares by the Company in favour of IOC - despite having transferred 155 million shares in favour of CP (I) PL, and having received the full price therefor, the Company had not registered the same in the Company's Register of Share-holders, thereby depriving the Chatterjee Group from exercising its right to vote in respect of the said shares - transferring 150 million shares in favour of IOC, the character of the Company was altered from a Private Company into a Government Company and also reduced the Chatterjee Group to a minority – Held that:- failure of WBIDC and GoWB to register the 155 million shares transferred to CP (I) PL could not, strictly speaking, be taken to be failure on the part of the Company, but it was the failure of one of the parties to a private arrangement to abide by its commitments. The remedy in such a case was not under Section 397 of the Companies Act. No acts of oppression had been made out against the Company. Directions given to WBIDC and GoWB to transfer 520 million shares held by them in HPL to the Chatterjee Group