TMI Blog2005 (4) TMI 599X X X X Extracts X X X X X X X X Extracts X X X X ..... to 28 in the company, in terms of Section 250(2) of the Act. 2. The case of the petitioners is : The company is a part of M.P. Birla Group and has always been known as a Birla company. The respondents 1 to 28 hold, collectively among themselves, 63.8% -shares in the company. Respondents 1 to 19 are incorporated companies and respondents 20 to 28 are charitable institutions/societies. All these entities were under the control and management of M.P. Birla till 1990 when he expired. Thereafter, his wife Mrs. Primada Birla came to be in control of these entities. She died in July, 2004. Since these entities held more than 63% shares in the company, the person/persons controlling these entities would be financially interested in the success o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on is completed, restrictions should be imposed on the shares. 3. Most of the respondents have filed their replies questioning the maintainability of the petition more particularly in view of the pending proceedings before the Calcutta High Court. 4. Shri Sarkar appearing for the petitioners submitted: It is an undisputed fact that respondents 1 to 28 collectively hold more than 60% shares in the company and that they were under the control and management of late Mrs Birla before her demise. The company, being a Birla company had always been under the control and management of Birlas. Even in the annual report for the year 2003-2004, her name is shown as promoter non executive Chairman. In the same report, it is also shown that the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... High Court and the Inspector appointed under Section 247(1A) cannot decide this issue. There has been no change either in the management or in the Board of Directors of the company after the demise of Priyamvada Birla. The shares held by respondents 1 to 28 are intact and there has been no transfer of shares held by them in the company. In Gordon Woodroffe and Co. Ltd., UK v. Gordon Woodroffe, Chennai (97 CC 582), it has been held that as long as there is no change in the shareholding or in management, provisions of Section 398(1)(b) cannot be invoked. Similarly, in the present case, since there is no alteration in the shareholding or in the management of the company, the question of investigation in terms of Section 247(1A) of the Act does ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to who controls the majority shares in the company. Even though, the petitioners have alleged in the petition that Shri Lodha is claiming control of respondents 1 to 28, the same has been denied in the replies filed by these respondents. Their denial itself would indicate that investigation is necessary to find the correct position relating to the shares. Further, this petition has nothing to do with the Will and none of the respondent companies is a party to the proceedings before the Calcutta High Court. 7. I have considered the pleadings and arguments of the counsel. I had reserved the order on this petition to be delivered along with the order on CP 57 of 2004. However, the petitioners filed CA No. 68 of 2005 seeking for issue of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out by the counsel in Bakhtawar Construction Co. Private Ltd. v. Blossom Breweries Ltd. ( 88 CC 859) and Padma Taparia v. Assam Brook Limited(88 CC 838). In the former case, this Board declined to order an investigation on the ground that the petitioners themselves had admitted that the persons in the management of the company had held controlling interest by virtue of holding more than 40% shares and that the petition had been filed on unfounded apprehensions and suspicions and not with a view to protect the public interest. In the later case, this Board dismissed the petition on the ground that the ownership of shares sought to be investigated related only to about 10% of the total shares of the company. In the present case, the facts so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Priyamvada. As rightly pointed by Shri Sundaram, from the averments of the petitioners in the petition it is seen that their own case is that Shri Lodha is controlling the interests of late Mrs Birla and that is the reason why they have raised the issue of Take Over Code. Likewise, while denying that Shri Lodha is controlling the interests of the estate, the learned counsel for the respondents contended that provisions of the said Code are not applicable to a case of transmission of shares. In other words, both seem to have advanced their arguments on the basis that Shri Lodha is controlling the interests of late Mrs Birla. If it is so, then there is no need for investigation in terms of Section 247(1A). Even on facts, it is seen that after ..... X X X X Extracts X X X X X X X X Extracts X X X X
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