TMI Blog2010 (5) TMI 694X X X X Extracts X X X X X X X X Extracts X X X X ..... gust, 1988, R1 became a deemed public company pursuant to section 43A of the Act. The shareholding pattern of the parties are : the petitioners hold 17 per cent (approximately) and the petitioners sister hold 13 per cent, the Rebello group hold 4 per cent and the respondents group hold remaining 66 per cent of the total paid-up capital of the company. Before incorporation as a company, the R1 was a partnership firm consisting of the 2nd respondent, the 2nd petitioner's late grand mother, the 1st petitioner's husband and the 2nd petitioner's father and late Mrs. Coomi Warden. The firm came in existence on 28th April, 1962 by name and style Gharda Chemical Industries. On the death of Late Bai Ratanbai H Gharda on 30th November, 1962, a fresh deed of partnership was executed on 14th January, 1966. As stated above the R1 was formed and incorporated on 6th March, 1967 with the principal object of taking over the partnership firm Gharda Chemical Industries as a going concern and with a view to obtain the benefit of corporate personality and the advantage of a limited liability. The first directors of the company were/are Shri K H Gharda and Shri R M Kavasmaneck who were/are also the subs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 1987. As stated above the R1 became a deemed public company on 17th August, 1988 under the provisions of section 43A of the Act. However, a resolution was proposed in a meeting to continue to keep it as a private company. The resolution was defeated on 5th May, 2001 with the result that the R1-company continues to be deemed public company and unlisted deemed public company. From the year ended 30th June, 1988 onwards, the 2nd respondent with a view to squeezing out the Kavasmaneck family and compelling them to sell their shares in the R1-company departed from the earlier understanding/practice of distributing profits to the shareholders through dividend/bonus shares and deliberately commenced a policy of wrongful withholding of dividends/distribution of profits, etc. During the period 1989-90 whilst commencing the unfair dividend squeeze policy, the 2nd respondent despite being fully aware that the petitioners and their family members were the only heirs of the late R.M Kavasmaneck wrongfully delayed transmitting the shares on various pretexts. At the same time R2 convened an EGM and proposed drastic change in article 57 which would destroy the shareholders' existing rights of pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en at para 6.65.2 shows the details of income, profit, funds available, dividend declared from the year 1986 to 31st March, 2009. Also at para 6.65.3 in the petition shows the reserves of the R1-company from the year 1986 to 2009. On 5th May, 2001 the R1-company proposed to convene an EGM. However, the petitioners opposed the proposed resolution. The 2nd respondent being at the helm of the control and management of the affairs of the R1-company is only ensuring that he gains and enjoys the benefits which the other shareholders cannot get the same. For the year ended March 2004 the 2nd respondent also siphoned the huge amounts of Rs. 4 crore in the guise of alleged compensation for alternative accommodation. 4. While matter stood, thus, on 11th January, 2005 the Godrej Industries Ltd. with whom the petitioners had pledged some of their shares, lodged 3,119 shares with the R1-company from being transferred in their name without the knowledge and consent of the petitioners. The 1st respondent declined to register the transfer of the said shares vide their letter dated 10th March, 2005 on the ground that the Godrej Industries Ltd. being engaged in an allied field of activity, such tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the CP 77 of 1990. Accordingly, on 8th September, 2005 these petitioners made a statement in the Bombay High Court that they were not interested in prosecuting the CP 77 of 1990 and may be permitted to withdraw from the proceedings. The said request was accepted by the Bombay High Court and accordingly these petitioners withdrew from the CP 77 of 1990 on 8th September, 2005. The reason for withdrawal was on the basis of oral assurance given by respondent No.2 (para 6.77 vol. 1 of petition). The CP 77 of 1990 was adjudicated between the two petitioners therein and the respondents therein but not the current petitioners, since they withdrew from the petition. After the said withdrawal the relationship between the petitioners and the 2nd respondents started improving. The 2nd respondent stated that it may not be possible to declare a dividend for the year ended March 2007. The R1 had enormous accumulated reserves and, hence, one year's bad performance should not result in dividends being withheld. The 2nd respondent agreed to declare the dividend of Rs. 300 per share as against the agreed amount of Rs. 400 per share. In terms of the agreement reached between the minority shareholders ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contact the 2nd respondent to seek a dialogue with him but the petitioners efforts have been unsuccessful. The petitioners now understand that the 2nd respondent is at a very advanced stage of divesting his shareholding in the R1-company contrary to the agreements with the Kavasmaneck family, assurance made to the petitioner and the articles of the company and in breach of the preemptive rights of the petitioners. It is further submitted that the unfairness of the R2's conduct is further writ large on the fact that on the one hand he has filed a suit against the petitioners to acquire the petitioner's shares at a price prevailing in 1990, i.e., Rs. 6,599.48 per shares whilst at the same time the R2 desires to sell his shares in the R1-company at Rs. 1,800 crore which is equal to Rs. 2,80,000 per share. It is submitted that the fundamental basis of the R1-company and its continuous existence has been destroyed and the only just and equitable course would be to wind up the R1-company. The R2 has indulged in improper, mala fide, illegal, fraudulent, iniquitous and unjust conduct seriously impairing the petitioners legitimate rights and expectations as shareholders. The R2 usurped comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o purchase the same at the fair value as hereinafter provided. Article 57 (b) provides notice of transfer, where a member proposes to transfer any share shall give notice in writing to the company that he desires to transfer the same. It is an admitted fact that a resolution was proposed, however, the same was defeated on 5th May, 2001 thereby the company remains to be a deemed public company. From 2005 to till date the company and the majority shareholders are acting under article 57 and interpreted that article 57 binds on the shareholders, and no member can be permitted to transfer of shares to strangers but not inter-transfer. Despite an oral assurance, subsequently recorded in writing the R2 continuously squeezing the dividend. On the point that article binds on the company and constitutes contract the learned senior counsel relied upon the following judgments: (1) In the matter of Smt. Claude-Lila Parulekar v. Sakal Papers (P.) Ltd. [2005] 65 CLA 317 /[2005] 11 SCC 73 paras 23, 25, 26 and 27, it is held at para 25 that : "The AoA constitute a contract not merely between the shareholders and the company but between the individual shareholders also. (2) In the matter of M M Dua ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ically averred that R1 is a deemed public company. Based on the application, the Registrar of Companies ('RoC') issued certificate of incorporation in which the word 'private' was deleted by virtue of section 43A of the Act, with effect from 17th August, 1988 and became deemed public company. Since it is a deemed public company section 111A has no application to the R1-company. Section 111A(1) expressly excludes the company which is a deemed public company is to be read with section 111(4). The relevant provision is extracted herein: "(1) In this section unless the context otherwise requires company means a company other than a company referred to in sub-section (14) of section 111 of this Act." "(14) In this section company means a private company and includes a private company which had become a public company by virtue of section 43A of this Act." Section 111 A was introduced on 20th September, 1995 is not applicable to the R1-company in view of section 111A(1) to read with section 111(14) of the Act. It is clear from the above provisions that the shares are not freely transferable. Section 111(14) was also introduced on 20th September, 1995. As stated above R1-company is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 43A of the Act deleted in the year 2000. By virtue of section 43A, R1 became a deemed public company could not revert back as private company nor would become public company. The distinction of deemed public company and public company is given in section 111A(1) of the Act. As stated supra, the Legislatures have intentionally and deliberately retained and not deleted nor amended section 111A(1) and 111(14) of the Act. 13. On the third alternative submission on article 57, the learned senior counsel submitted that the R1-company is a unlisted public company. Therefore, this company can be equated with a private company. Hence, there is restriction on free transferability of shares. On this point he relied upon a passage from Palmers Company Law at para 40-12/13. He submitted that there is a different treatment in case of unlisted companies. In this regard he cited the relevant rules, namely, Private Limited And Unlisted Public Company (Buy-back of Securities) Rules, 1989. 14. It is further argued that section 28 of Securities Contracts (Regulation) Act, 1956 ('SCRA') controlled trading of the shares on the stock exchange. The Securities Act which regulated the transfer of sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ii) The petitioners have entered into agreements to sell their shares whilst respondent No. 1 was a private limited company with a restriction on transferability of its shares. On the other hand, the petitioners purport to allege that a purported intention to sell shares is violative of the articles. (iii) The petition is premature. There is no basis for presuming that the 2nd; respondent's shares will be sold or that the company will not abide by law and/or its articles. (iv) Assuming without admitting that the 2nd respondent acted in breach of articles, it will not constitute an act of oppression or mismanagement. (v) The company is bound by the judgment of the hon'ble Bombay High Court in Company Petition No.77 of 1990 and is bound to act in accordance therewith. There is no scope for this Bench to reconsider that issue whether the petitioners consider themselves bound by the same, or not. He submitted that in 1990 the Kavasmaneck, Rebello group filed Company Petition No.77 of 1990 in the High Court, Bombay. Unknown to the respondent the Kavasmaneck/Rebello group entered into a memorandum of understanding dated 3rd June, 1992 with Godrej Soaps Ltd., inter alia, to acquire ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te company can only be a private company if it meets the conditions prescribed in section 3(1)(iii) of the Act. It must incorporated those conditions in its articles and follow the conditions. Section 43A, however, permitted deemed public limited companies to retain' the provisions referred to in section 3(1)(iii) of the Act. Pursuant to the Companies (Amendment) Act, 2000 section 3 of the Act was amended to add a further requirements, viz., ( d) prohibits any invitation or acceptance of deposits from to persons other than its members, directors or their relatives' ; and section 43A became inoperative. Consequently, the third category of companies, i.e., deemed public limited companies which continued to be permitted to include provisions applicable to private limited companies ceased to exist. As of that date, a company could be either a public limited company or a private limited company. Further, in order to attract the privileges of a private limited company, it is necessary not only to incorporate the provisions mentioned in section 3(1)(iii) in the articles, but also to actually comply with them: Without compliance with both, the Act applies to a company its if it were not a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its members Mr. B E Daruwalla and Mr. S C Gandhi to intimate an offer to existing shareholders, which were circulated amongst all its members as requested. Petitioner No.2 by his letter dated 6th June, 2001 stated that he was unable to understand as to how the company continues to circulate transfer notices under article 57 especially in view of the recent turn of events. Petitioner No.2 has recorded his objection and stated that he would be ignoring the transfer notices, if any, circulated by respondent No. 1 under article 57 of the AoA. The petitioners are estopped from raising any allegation regarding non-circulation of transfer notices or relying on article 57 and/or from requiring any notice of any transfer. In any event, no such situation has arisen. Further, it is submitted that as a result of transfer applied for by petitioner No.2 the strength of members of respondent No. 1 has increased to 54, which is inconsistent with respondent No. 1 being a private limited company. 18. Further the petition is lacked on the ground of cause of action. It is submitted that the petition does not in any manner set out any cause of action nor does it make out any case for the purpose of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thdrawal and abandonment is, that the law confers upon a man no rights which he does not desire Invito beneficium non dature. The said principle has been reiterated by the hon'ble High Court in paragraphs 6, 9 and 13 of its judgment dated 14th November, 2008 while dealing with the effect of the unconditional withdrawal by the present petitioners from Company Petition No.77 of 1990. In the said order it was held that, by withdrawing from the said petition the petitioners herein have given up their challenge with regard to all the alleged acts of oppression and mismanagement therein (which included identical allegations as set out in the present petition) and that the petitioners had consciously acquiesced in the acts complained in the earlier petition. In the circumstances, the present petition is barred by the principle underlying order 23, rule 1 of the CPC and rule 88(2) of the Court Rules, i.e., the law confers no right which a person does not desire. 20. The petition is barred by the principles of res judicata on the ground that the petitioners previously instituted CP 77 of 1990 on the similar grounds as set out in the present petition. The hon'ble High Court of Bombay vide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e dismissed on this ground alone. 22. The petitioners have also suppressed the fact that Godrej Industries Ltd. had recently filed Arbitration Petition No.346 of 2009 in the hon'ble High Court of Bombay against the Kavasmaneck/Rebello group enforcing the MoU dated 3rd June, 1992 and obtained an ex parte order dated 12th May, 2009 restraining the petitioners from transferring their respective shareholdings and/or creating any 3rd party rights in respect of the same. It is pertinent to note that the petitioners have stood by and not contested the said petition. Petitioner No.2 has, therefore, specifically reaffirmed his agreement to sell his shares to Godrej. The hon'ble High Court of Bombay, vide its order dated 6th October, 2009 was, inter alia, pleased to confirm the said ex parte order dated 12th May, 2009. The petitioners have themselves purported to transfer shares to an outsider (non-member) after 5th May, 2001 and are, therefore, estopped from raising any grievance about any member transferring their shares to an outsider, contrary to articles 57 of the AoA of respondent No. 1. On 11th January 2005, the company received 3119 shares from Godrej for a transfer executed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... transaction. On this point he relied upon the decisions: In the matter of Laxmi Raj Shetty v. State of Tamil Nadu [1988] 3 SCC 319 para 25, 26 it is held that is now well settled that a statement of fact contained in a newspaper is merely hear say and, therefore, inadmissible in avoidance in absence of the maker of the statement appearing in court and deposing to have perceived the fact reported. In the matter of Sunil Ramdas Kotkar v. State of Maharashtra [2005] 4 Bom. CR 117 paras 18 and 19 whereas on the averment regarding partnership and quasi-partnership the petitioners made similar averments in CP 77 of 1990. Hence, any issues raised in CP 77 of 1990 cannot be raised on those allegations in the present CP. On this point he relied upon a judgment C. In the matter of Hind Overseas (P.) Ltd. v. Raghunath Prasad Jhunjhunwalla AIR 1976 SC 565 paras 32 and 34, it is held when more than one family or several friends and relations together form a company and there is no right as such agreed upon for active participation of members who are sought to be excluded from management, the principles of dissolution of partnership cannot be liberally invoked. Further, the averment on salary a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, relied upon the judgments LRMK Narayanan v. Pudhuthotam Estates Ltd. [1992] 8 CLA 140 (Mad.) adn S Narayanan v. Century Flour Mills Ltd. [1985] 3 Comp LJ 209 (Mad.) para 13. In reply to the issue of deemed public company the learned senior counsel submitted that the petitioners opposed and got defeated the special resolution in the year 2001 thereby the company became public company and no action has been taken by the petitioners till 2005. There is a finding in respect of R1 became public company by the High Court in CP 77 of 1990 at para 60 of its judgment. The judgment is binding on the petitioners and they never challenged this judgment in appeal. Section 3(1)(iii) of the Act defines a 'private company' and section 3(1)(iii) defines 'public company'. In the Act there are only two categories of companies, i.e., private company and public company. There is no deemed public company as per the provisions of the Act. After defeating the resolution, the company became public company as per section 3(1)(iii) of the Act. To remain a private company all the provisions of section 3(1) (iii) (a), (b ), (c), (d) have to be fulfilled. But the R1-company has not fulfilled all those above ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of law also upheld by the High Court of Bombay in the matter of Western Maharashtra Development Corporation (supra), which is binding on this Bench and (c) the company ceased to be a private company. The second relief of the petitioners that any of the petitioners can be taken on the Board is concerned the directorship issue is the discretionary power of the shareholders. Further, the petitioners argument that just and equitable ground is made out to wound up the company and the company can not be wound up instead the CLB can pass orders to put and end to the oppression. The oppression is concerned the petitioners have not made out any case to wind up the company and the company can not be wound up when it is making huge profits. 28. The respondent No. 1 filed counter which is similar to the counter of respondent No.2 which was already dealt in supra. Shri Sen learned counsel appearing for the respondent No.l adopted the arguments put forth by the learned senior counsel for respondent No.2. However, he submitted that to file a petition under section 397 there must be three ingredients, viz., ( a) the acts must be continuous, (b) it must relate to the affairs of the company, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out the case for just and equitable to wind up the company. Even if the case is not made out for winding up of the company, the petition is maintainable. In support of his case relied upon the judgments. In the matter of M S D C Radharaman v. M S D Chandrasekara Raja. [2008] 84 CLA 361 (SC) and Kamal Kumar Dutta v. Ruby General Hospital Ltd. [2006] 74 CLA 91 (SC)/[2006] 7 SCC 613 para 30. He further contended that the petitioners have made out a clear case on the issues of (a) violation of article 57, ( b) mismanagement, (c) dividend. In response to the judgment of the High Court in CP 77 of 1990 is concerned, it emerges three things from it (a) Petitioners are not parties to me judgment and no res judicata applies to the petitioners, (b) article 57 reiterates in the judgment and enforceable, and (c) the petitioners cannot urge the grounds ; which made in the CP 77 of 1990 and they have not urged any grounds in present petition. 30. Further clarifying the legal position on deemed public company. It is submitted that section 43A envisages deemed public company. Section 111A(1) came to be introduced in 1995 by the Depository Act. However, free transferability provides only in secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he present case there is no single act. In view of the facts and legal position as explained the learned senior counsel prayed this Bench to dismiss the petition. 33. Heard the learned senior counsel appearing for the respective parties extensively on various dates and perused the pleadings, documents and various authorities relied upon by them. Even though various reliefs were sought in the petition, the learned senior counsel for the petitioners prayed this Bench to grant two reliefs, viz., ( a) restrain respondent Nos.2 and 3 from selling and transferring shares in R1-company except after following the procedure laid down in article 57 of the AoA and must offer shares to the existing shareholders, and (b) any amongst petitioners shall be taken on the Board, since they hold 17 per cent of shares of the issued, subscribed and paid-up capital of R1-company since incorporation. In determining the entitlement of reliefs as prayed by the petitioners the following issues are need to be answered (i) whether Rl is a deemed public company or not; (ii) if the R1 is a deemed public company whether all characteristics of a private company does possess; (iii) if the R1-company is not a deem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny, (b) has a minimum paid-up capital of Rs. 5 lakh or such higher paid-up capital, as may be prescribed, (c) is a private company which is a subsidiary of a company which is not a private company. The R1-company issued notice dated 2nd April, 2001 calling an EGM to pass special resolutions to amend article 3 ef the AoA to insert clause (d) prohibiting acceptance of deposits from persons other than members, directors or their relatives and also to change the name of the company from Gharda Chemicals Ltd. to Gharda Chemicals (P.) Ltd. However, the said resolution got defeated in the EGM held on 5th May, 2001 by the petitioners and their group who approximately hold more than 32 per cent of the paid-up capital. The Government of India, Ministry of Finance, Department of Company Affairs, vide, its General Circular dated 30th September, 2002 made it clear that those companies which do not approach the RoC, seeking reversion back to private company's status are deemed to have chosen to remain as public companies. The R1-company has not approached the RoC seeking reversion back to private company's status as provided under section 43A(2A). By virtue of amendment to the Act in the year 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... back the company to the fold of private company but the petitioners and their group got defeated the said resolution thereby the company remained as public company. The other characteristics of public company as defined in section 3(1)(iv) of the Act has been fulfilled, viz., the number of members of the company are 54 and the status of deemed public company done away in the year 2000. Further as per the general circular dated 30th September, 2002 the companies which do not approach the RoC seeking reversion back to private company status are deemed to have chosen to remain as public companies. From the records it is clear that the R1-company did not approach the concerned RoC for reversion back to status of a private company as per section 43A(2A) of the Act. Further, the learned counsel for the R1-company informed that the company has in turn approached the Central Government for permission to pay the remuneration to the directors in excess of what is permitted in the Schedule XIII read with sections 198 and 309 of the Act. The legal position on this aspect is that the permission is required only in the case of a public limited companies and the provisions of Schedule XIII read w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or all of such members of the said shares at the fair value he shall within 15 days of the offer ; be entitled to apply for the purchase and transfer of the same and the company shall be bound/ upon payment to the transferor of the fair value of such shares to transfer the shares of member applying. From the above clauses of the articles there is no doubt that the articles does contain the pre-emption clause, i.e., restriction on transfer of shares other than members. The petitioners strongly contend that since there is preemption clause in the articles and the articles bind on the company and constitutes contract between the shareholder and the company and the respondents are abide by the articles. In this regard the learned senior counsel for the petitioners relied upon the authorities of the hon'ble Supreme Court and the CLB. The hon'ble Apex Court in the matter of Sakal Papers (supra ), it is held that the AoA constitute a contract not merely between shareholders and the company but between individual shareholders also. The Apex Court therein was dealing the matter in respect to a private company. Hence, the judgment is not applicable to the facts of the present case. In the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nded that in the facts of the present case section 82 of the Act applies. Section 82, thus, reads as the shares or debentures or other interests of any member in a company shall be movable property, transferable in the manner provided by the articles of the company. The learned senior counsel further argued that there is pre-emption clause in the articles restricting transfer of shares to non-members (article 57) and also in view of non-applicability of section 111A and applicability of section 82 of the Act whereby transfer of shares restricts to non-member in a private company, the 2nd respondent must be restrained from transferring/selling their shares. It is further argued that even the listed public companies have made a right of pre-emption clause in the open offer. Now I would like to emphasise the submissions of the learned senior counsel for the respondents 38. It is argued that section 43A permitted the deemed public limited companies to retain the provisions referred to in section 3(1)(iii) of the Act, i.e., status of private company. Pursuant to the Companies (Amendment) Act, 2000, section 3 of the Act was amended to add a further requirement, viz., (d ) prohibits a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the learned senior counsel for the respondents further strengthened the legal position. It is clear from the sequence of events that the R1-company became a deemed public company in the year 1988 pursuant to section 43A of the Act. After the amendment to the Act, in the year 2000 the provision of deemed company was deleted. The R1-company diligently moved special resolution in the year 2001 to amend article 3 of the AoA by necessary clauses to revert the company to a private limited company. In the EGM held on 5th May, 2001 the petitioners group who collectively hold 32 per cent of the shareholding got defeated the special resolution and thereby the R1-company could not revert back as a private limited company, remained as public limited company. The petitioners acknowledged the company is a public limited company. The Bombay High Court in CP 77 of 1990 hold that the R1 is public limited company. I respectfully agree with the findings given by the hon'ble High Court of Bombay. Further an instance establishes that the petitioners admit and approve that the R1 is a public limited company and article 57 will not be applicable to the R1-company from petitioner No.2's letter dated 6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pany in the year 1988. However, the characteristic of private company continue to exist. After deletion of section 43A the company proposed to retain as a private company. However, the company could not succeed to revert back to private company. The company attained the status of public company in view of deletion of section 43A and defeat of special resolution and loss of characteristic of private company, i.e., possessing the characteristic of public limited company. Since R1 is a public limited company and section 111A is applicable whereby the company's shares are freely transferable. Though the company became a public limited company, however, the articles more particularly article 57 continued to exist in the articles. Mere existence of article which is contrary to the statute is void. Section 9 of the Act expressly made clear that the Act will override memorandum and articles of the company. Even though there is no amendment to article 57, the company remained as public company article 57 is not binding on the company and its shareholders and also unenforceable. Thus, it is clear that the statute prevails/overrides the articles. This legal position is further strengthened fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n status quo in respect of shareholding pattern of the R1-company and directed not to sell, transfer, alienate the immovable assets of the company without leave of the Bench. While granting interim order this Bench felt it necessary to deal with the controversy in respect of deemed public company at the time of final hearing. I have decided the issue (i) supra. Now I deal with issue No.( vi) i.e., whether petitioners are entitled to the relief as pressed in para (b) above 39. The petitioners in their one of the reliefs sought orders/directions for amendment of articles of AoA of the R1-company for providing a system of proportional representation under section 265 of the Act and for the appointment of 2nd petitioner as a director of the R1-company. The learned senior counsel for the petitioners during the course of arguments submitted that the petitioners are holding 17 per cent of the issued and subscribed paid-up capital and they are shareholders since incorporation of the R1 company and pressed this Bench that any one amongst the petitioners should be taken on the Board of R1-company. There is no dispute in respect of the shareholding of the petitioners and being members fro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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