TMI Blog1985 (7) TMI 299X X X X Extracts X X X X X X X X Extracts X X X X ..... s issued by the aforesaid order. Accordingly, the official liquidator has submitted his report on May 16, 1983. The official liquidator has, in this report, raised objection only in respect of four transfer applications each of which is dated March 22, 1982, in favour of four investment companies, viz. , (1) Harit Investment Co. P. Ltd., (2) Haren Investment Co. (P.) Ltd., (3) Krishna Kumar Investment Co. Pvt. Ltd., and (4) Gokulesh Investment Co. (P.) Ltd., for 1,000 shares each. As regards the other transfer applications, the official liquidator has not raised any objection and has not sought to impugn the said transactions. In this state of affairs, by the order of this court of September 21, 1984, the applicant company was permitted to register the transfers according to the transfer applications other than the aforesaid four impugned transfers as prescribed in annexure "B" to the affidavit in support of the summons. In respect of the impugned four transactions, the affidavit of Shri Haren K. Mehta dated August 29, 1984, has been filed on behalf of the four investment companies. In the course of the hearing of the objections raised by the official liquidator against these fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the brokers, contract notes in respect of the impugned transfers, extracts from the bank accounts of the transferee companies, the counterfoils from the cheque books of these companies and the original transfer applications executed between the parties and attested by the brokers, as well as the oral evidence in the nature of affidavits of the concerned directors of the transferee companies to show and satisfy that the impugned transfers were effected in April and May, 1979, at the prevalent market price as on April 23, 1979. Mr. Vakharia has taken me through this documentary as well as oral evidence which was produced before the official liquidator, and which has now been produced on the record of this application. On perusal of the advice notes of the brokers, the contract notes of the impugned transactions, the statement from the bank accounts of the concerned respective transferee companies, and the counterfoils from the cheque books of these companies and the original transfer applications as executed between the transferor company and the transferee companies, and attested by the brokers through whom these transactions were entered into, the following facts emerge : 1.M/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t also the transfer applications were executed at the relevant dates. In the circumstances, the first objection is clearly unwarranted. It is no doubt true that so far as the second objection is concerned, neither the share certificates nor these transfer applications were lodged immediately after they were effected with the Reliance Textiles Industries on March 29, 1982. The explanation given on behalf of the transferee companies in the affidavit of Shri Haren Mehta is that since Siddhpur Mills Co. Ltd. ceased functioning from February 12, 1979, the transferee companies could not lodge these transfer applications together with the necessary share certificates with the registered office of the company which was also not functioning from that date, and it was only when they received a letter from the Reliance Textile Industries on March 8, 1982, that they lodged the transfer applications together with the necessary share certificates. It is an admitted position that Siddhpur Mills Co. Ltd. had closed down and ceased functioning with effect from February 12, 1979. It does not require, therefore, much of imagination or evidence to agree with this explanation advanced on behalf of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anies, which were investment companies, thought it fit to purchase the shares of Siddhpur Mills Co. Ltd., no serious exception can be taken that this was not a bona fide transaction or that it was unfair, unjust or unreasonable. There is another aspect of the matter which should also be borne in mind. The additional affidavit of Shri Haren K. Mehta disclosed that the market price of Bharat Vijay Mills at all relevant times between March 31, 1979, and December 31, 1979, was ranging between Rs. 685 to Rs. 475 per share, while that of New Gujarat Cotton Mills, was ranging between September, 1979, to December, 1979, between Rs. 840 to Rs. 485. If, therefore, these investment companies thought it fit to purchase the shares in anticipation that some scheme of amalgamation would be moved and on such scheme being sanctioned, the shares of the company taking over the sick unit would be offered to the shareholders of the sick unit, they could not be accused of chasing a wild goose. It should be remembered that the transferee companies before me have purchased these shares of the face value of Rs. 100 each at Rs. 95.25 each. The investors in the stock market ordinarily would know about whic ..... X X X X Extracts X X X X X X X X Extracts X X X X
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