Home Case Index All Cases Companies Law Companies Law + HC Companies Law - 2009 (7) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2009 (7) TMI 771 - HIGH COURT OF KARNATAKATransfer of as many as 2,392 shares of the company held by respondent Nos. 2 to 5 in favour of respondent Nos. 6 to 9 at a price of ₹ 7,031 per share - Whether is clearly in contravention of article 37 of the articles of association and the order of the Company Law Board is vitiated for not taking note of the specific provision? Held that:- Dual or conflicting stand adopted by the appellant-petitioner only indicates that, while on the one hand when it comes to buy shares by himself, to exercise pre-emptive right, the appellant-petitioner complaining of higher price and when it comes to the examination of the question of transaction in favour of the sixth respondent, the appellant-petitioner is complaining of under-valuation of shares. This is nothing but blowing hot and cold at the same time, which reflects on the conduct of the appellant-petitioner, who has not really availed of the pre-emptive right but is complaining without really making use of the right available in his favour. It is for this reason, the Company Law Board dismissed the petition. We find no reason to defer from the view taken by the Company Law Board. Insofar as the argument regarding mismanagement is concerned, on facts, the Company Law Board found lack of supporting materials in favour of the allegation of mismanagement and merely a complaint that the company had leased some part of its assets in favour of a sister concern of the sixth respondent while the sixth respondent was also a part of the management, whether here or there, that itself does not prove any mismanagement, which is based on such irrelevant aspect not based on any aspect as to how such leasing had resulted in prejudicial interest of the company. We are not impressed by the submission and the request of Sri Ramesh, learned counsel for the appellant that the matter should be remanded to the Company Law Board for further examination on the act of mismanagement, subject-matter for examination under section 398 of the Act.Appeal dismissed.
|