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TMI Blog1958 (9) TMI 44X X X X Extracts X X X X X X X X Extracts X X X X ..... e increased by Rs. 35,000. The resolution which is annexure 'A' runs as under: "After detailed discussion it was unanimously resolved that in order to improve the financial position of the company and to meet the liabilities of the company 350 shares of Rs. 100 each be alloted. The shares may, in the first instance, be offered to the present shareholders in the ratio of one share for every four shares held by each shareholder, fraction up to 1/2 share to be ignored and more than 1/2 share to be counted as one share. The existing shareholders may be asked to send their applications within 15 days of the date of the notice and to pay Rs. 10 per share with application. They should be informed that the balance amount of Rs. 90 per share will h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . It was prayed that the resolution and the notices issued to some of the shareholders of the company be quashed and the respondents be directed not to act upon the said resolution, and an interim stay order be also passed staying the operation of the resolution till the final disposal of this petition. On behalf of the company and the managing director the petition was opposed on merits as well as on preliminary grounds. It was stated that the minority was not being oppressed by the majority, that no case for the winding up of the company was made out in the petition, and that increase of the capital was necessary as the number of buses owned by the company were insufficient and therefore the fleet had to be augmented as ordered by the Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shares in terms of the said resolution. There were 13 shareholders who had purchased 177 shares offered to them in accordance with the above resolution. There were 11 persons named in the application, who are said to belong to the petitioner's group and who have not purchased the shares. It was also stated that the company required additional capital in order to complete its fleet of vehicles as required by the Regional Transport Authority. In the meeting of the Regional Transport Authority held on the 19th of August, 1958, the company had been required to maintain a fleet of 23 transport vehicles, and one month's notice was given to the company to complete the fleet of 23 vehicles and by way of punishment one permit and two return trips o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... invitation shall be treated as made to the public by virtue of sub-section (1) or sub-section (2), as the case may be, if the offer or invitation can properly be regarded, in all the circumstances- (a)as not being calculated to result, directly or indirectly, in the shares or debentures becoming available for subscription or purchase by persons other than those receiving the offer or invitation; or (b)otherwise as being a domestic concern of the persons making and receiving the offer or invitation." This provision corresponds to section 55(2) of the English Companies Act of 1948. In Buckley on the Companies Acts, 12th Edition, at page 138, after reproducing sub-section (2), it was observed: "As to (a) note that it is not necessary to sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith and kin cannot be considered to be an invitation to public. An offer to buy shares made to an individual as such is not within the prohibition of the word "public" as used in section 67 of the Act. In the case of a private company, the maximum number of its members cannot exceed 50. Where a company offers shares to selective persons, it cannot be said to be extending an invitation to buy shares to the "public". In all cases the determination of the question of an offer being made to the public, depends upon the facts and language of the notice on the particular circumstances of each case. If the attitude as has been adopted by the petitioners in this case, can be deemed to be permissive in law, then it will be virtually impossible for a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... company." "Transfer" means transfer by the acts of a member. It does not apply to further issue of capital by purchase of new shares. I do not think that any article of the articles of association of the company has been contravened in this case. Lastly, it was argued on behalf of the company that the provisions of section 397 of the Act cannot be attracted on the allegations made in this petition. Relief can be given in cases of oppression where the court is of the opinion that the company's affairs are being conducted in a manner oppressive to any member or members; and that to wind up the company would unfairly prejudice such member or members, but that otherwise the facts would justify the making of a winding up order on the ground th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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