9911796707
TMI Blog2003 (3) TMI 549X X X X Extracts X X X X X X X X Extracts X X X X ..... Resolutions, contained in the Notice dated 18-2-2002 convening the said Extraordinary General Meeting or any other General Meeting containing the same and similar Resolutions; (c )That a decree of permanent injunction may be passed restraining the Defendant from declaring/informing the results of the Notice of Postal Ballot dated 1-2-2002; (d)That a decree of permanent injunction may be passed restraining the Defendant from acquiring the equity shares of Jaypee Hotels Ltd. from the persons and/or corporate bodies in the Promoter group including the companies namely Jaiprakash Enterprises Limited and Jaypee Ventures Ltd. (e )That cost of this Suit be awarded to the Plaintiff against the Defendant and such other relief or reliefs as may be deemed to be fit and proper in the circumstances of the case may also be granted to the Plaintiff against the defendant." 2. After the filing of the suit, the plaintiff sought an ad interim injunction and when the injunction was not granted and meeting was held, the plaintiff moved an application for amendment of the plaint with the allegations that the defendant has already acquired shares of M/s. J.P. Hotels Limited from the persons and the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he company but is seeking to undo the majority rule which majority rule being a creature of the Companies Act, 1956, no judicial order can be passed against the landlord (sic) of the provisions of the Companies Act. It was also contended that the court below lacks jurisdiction to interfere the conduct of the company meeting. The cause of action does not continue to arise to the plaintiff. In short the main objection of the defendant-revisionist against the application for amendment of the plaint is that the Civil Court has no jurisdiction to enter into the cause of action to the plaintiff-opposite party. 4. The learned trial court allowed the amendment without deciding the question of jurisdiction. On the point of jurisdiction the learned trial court recorded his finding as follows :- "In my opinion so far as the amendment of the present suit is concerned, it is matter of later on and it should be decided after incorporation of the amendment prayed for......" 5. In my opinion the issue of jurisdiction should have been decided at the first instance. In Pandit Rudra Nath Mishir v. Pandit Sheo Shanker Mishir AIR 1993 Pat. 53 (sic) after referring the view of the Allahabad High Cour ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as set out in the plaint which are as follows :- "6. That it is submitted that the present share capital of the Defendant Company, as per its Balance Sheet of the Defendant Company as on 31st March, 2002 is Rs. 158 crores against this the Promoters Directors of the Defendant Company have taken huge loans aggregating Rs. 1,399 crores from Banks and Financial Institutions, as Secured Loan or through Non Convertible Debentures on a very high rate of interest ranging up to 16.5 per cent per annum that while the Defendant Company is paying heavy interest, its funds have been diverted to purposes, where no income is there since several years. That besides investments and loans, the Promoter-Directors of the Defendant Company have also exposed the Defendant Company to heavy risks by giving Guarantees against loans taken by its subsidiaries, as otherwise the companies were not entitled to obtain any loan from Banks and financial institutions. The details of investments, loans and guarantees are given in the following paras. 7. That a summary of such investments made and loans and guarantees given by the Defendant Company, as per their Balance Sheet as on 31st March, 2001 are given as fol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny. By the above diversion of funds by the Defendant Company, the future of the company and its shareholders has been put at serious and grave risk, harzard and great peril. 12. That recently a news-item titled as "Something Rotten in JP Empire" was published in THE PIONEER dated 9-3-2002, which also speaks of the same truth. 13. That it is submitted that the various projects claimed to be undertaken by the defendant company through its subsidiaries are in shambles and their status has not been correctly disclosed by the Defendant Company. However, the facts about the subsidiary companies are summarized hereunder. 14. That it is submitted that in furtherance of the fraudulent, obnoxious and mischievous acts and conducts of the Promoter-Directors of the Defendant Company, the Defendant Company has issued a "Notice with Postal Ballot" to its shareholders seeking ex post facto approval/ratification for the unauthorized Guarantees of Rs. 167 crores and payment guarantees of 2.62 Million US Dollar given by the Board of Directors of the Defendant Company against Loans taken by M/s. Jaiprakash Hydro Power Limited. In addition, Security is also being provided by the Defendant Company by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ous exchange/swap of shares of the Defendant Company with the Shares of Jaypee Hotels Ltd. from the two companies owned by the Promoters, the Rules and Regulations have been grossly violated and Valuation Reports have been got prepared, without substance and without applying the established norms of valuation of shares. It is submitted that the defects and fraudulent aspects of valuation are summarized as under : ****** 25. That it is submitted that a Special Appeal has been filed by HB Stockholdings Ltd. as associate company of the plaintiff before the Division Bench of Allahabad High Court challenging the Scheme of arrangement of the Defendant Company, which is not the subject-matter of this Suit. The said Special Appeal has been admitted. 26. That it is submitted that from the above, it is apparently clear that the Promoter-Directors of the Defendant Company are deliberately, with mala fide intentions and by misuse of their fiduciary capacity as Director of the Defendant Company and ignoring all the norms and provisions of law, are perpetrating a fraud on the Shareholders of the company. This is a tyranny of the Promoter-Directors of the 'Defendant Company, who are majority s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of, registers and returns. Section 196 - Inspection of minute books of general meetings. Section 219 - Right of member to copies of balance sheet and auditor's report. Section 234 - Power of Registrar to call for information or explanation. Section 304 - Inspection of the register of Directors. ****** Section 307 - Register of [***] Directors shareholdings, etc. Section 614 - Enforcement of duty of company to make returns, etc. to Registrar." 10. The aforesaid provisions go to show that even the Central Government could not confer the jurisdiction to the District Court with regard to the provisions in sections 397 to 407 of the Companies Act. Section 397 of the Companies Act is as follows :- "Application to Company Law Board for relief in cases of oppression.-(1) Any members of a company who complain that the affairs of the company are being conducted in a manner prejudicial to public interest or in a manner oppressive to any member or members (including anyone or more of themselves) may apply to the Company Law Board for an order under this section, provided such members have a right so to apply in virtue of section 399. (2) If, on any application under sub-section (1), ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Companies Amendment Act, 1988, the provisions of sections 396 to 405 have been amended and in place of word 'Court' words 'Company Law Board' have been substituted. The result of this amendment is that now if the affairs of the Company are being conducted in a manner prejudicial to the public interest or in the manner prejudicial to the interest of any member or the Company as the case may be, it is the Company Law Board which has the jurisdiction to entertain such complaints of the members. 13. In its objection, the revisionist has also contended that M/s. H.B. Stock Holdings Limited of which the plaintiff-opposite party is the Director had also filed another Civil Suit No. 1722 of 2001 against the Defendant Company for the similar relief in the Delhi High Court and the Delhi High Court in its order dated 20-3-2002 has held that the prayer made by the plaintiff could not be allowed as she sought to restrain the defendant/revisionist from alloting its shares to anybody corporate or from investing in or pledging, selling, or otherwise disposing off his shares to anybody corporate in favour of any other person/body corporate and also from providing any loans to any other bod ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
