TMI Blog1982 (1) TMI 160X X X X Extracts X X X X X X X X Extracts X X X X ..... the consent of the petitioner at the meeting to be held on December 9, 1981. This court issued emergent notice to the respondent regarding admission of the petition and, in the meanwhile, issued stay of the operation of any resolution passed at the general meeting of the company held on December 9, 1981, relating to the amendment of the aforementioned articles of the articles of association of the company. The respondent company has entered appearance and filed its counter affidavit by way of objections. It is not necessary to traverse in detail the averments made in the counter affidavit. The main points made out by Sri A.N. Jayaram, learned advocate for the respondent company, are: (1)That the petition is not maintainable under sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssued right shares in the ratio 1:1 permitting its shareholders to buy ordinary equity shares in proportion to their existing holding and that the Government (petitioner) did not act on that offer while the other shareholders did. In the result, as on the date of the petition the Government held equity shares amounting to 19.6% of the total subscribed capital. It was in these circumstances having regard to the altered capital ratio between the Government on the one hand and the other shareholders on the other hand that articles 70( a ) and 97 of the articles of association of the company were required to be amended. It is useful to state that article 70( a ) of the articles of association of the company provides for the State Govt. to nom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Equity Shares : ( i )Right to vote, ( ii )Right to receive dividends, ( iii )Right to maintain its face value, and ( iv )Right to transfer freely, without restriction, the share to another. ( 2 ) Cumulative Preference Shares : ( i )Right to receive the prescribed dividend, ( ii )Right to transfer, and ( iii )Right to vote in case the company has not paid the prescribed dividend in respect of that class of shares. Beyond these rights, nothing else is provided for in the memorandum and articles of association of the company. It is not disputed that there are no other class of shares which the Government holds by virtue of which they have the right of nomination of directors and the chairman of the board of directors. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntinue a state of affairs which no longer is warranted having regard to the pattern of shareholders and the proportion of shares held by the Government and the other shareholders. If the Government has 1/5th of the shares only, then it cannot certainly have the right to nominate the directors or appoint the chairman of the board of directors of the company unless the other shareholders permit the same. Evidently other shareholders are not willing to continue the existing provisions of article section 70( a ) and 97 of the articles of association of the company. I, therefore, hold that this petition is not maintainable under section 106 or section 107 of the Act. The learned counsel for the petitioner has not pointed out any other provis ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
