TMI Blog1999 (10) TMI 744X X X X Extracts X X X X X X X X Extracts X X X X ..... y way of NRI participation. The Department of Industrial Development approved the NRI investment by Dr. Kamal K. Dutta and his other NRI associates of ₹ 8 crores of which ₹ 4 crores was to be by way of equity and other ₹ 4 crores by way of preference shares. Thus, the project envisaged 88.88 per cent NRI investment in shares and balance by residents the petitioner was named as one of the first directors of the company in the articles. As on 31-3-1995, the petitioners held 52.74 per cent of the equity shares in the company. The company was sanctioned a loan of ₹ 4.6 crores by IDBI towards the project. The 2nd respondent is the younger brother of the petitioner. In addition to the investment in the shares allotted to him, the petitioner had also contributed about ₹ 1 crore in cash as share application money and had also financed about ₹ 3 crores for import of medical equipments ( equipments ) for the hospital. The hospital was inaugurated by the Chief Minister of West Bengal on 25-4-1995. The petitioner claims that shares towards the value of equipments should be allotted to him, while the respondent contends that the same could not be done for var ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ners from the Board and by allotment of shares to the respondents group by which the 2nd respondent now controls majority both in the Board as well as in the shareholding. He submitted that by doing so the basic premises under which the hospital was conceived as an NRI hospital no longer exists. He pointed out that not only the application to the Industrial Development Department mentioned that the hospital will be an NRI hospital, even the approval by that Department indicates that the shareholding in the company by the NRIs more particularly of that of the petitioner would be 88.88 per cent. Any change in the shareholding pattern would mean that the company has not complied with the approval given by the Department of Industrial Development. He also pointed out that besides investing in cash of over ₹ 1 crore, the petitioner has also imported equipments worth around ₹ 3 crores for use in the hospital with the understanding that shares would be issued towards the investment made in the equipments. However, the company is refusing to allot shares on the ground that the equipments were second- hand equipments and that they were substandard or over priced. Thus, he submit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1) of the Act notices are to be issued at the usual address in India and as such notices were so issued to their addresses in India, is not correct inasmuch as the articles have been consciously framed, in view of NRI directors being in the company, to provide for issue of notices to their usual address omitting the word India . Since, the petitioner directors reside in USA, their usual addresses in USA, being known to the company, notices should have been sent to USA address only and not to their addresses in India. He also referred to article 121(b), according to which no notice of the meetings need be given to directors for the time being away from India, he submitted that this is not applicable to the petitioners as both of them live in USA. He also pointed out with reference to Annexure S, that the first item of the agenda used to be grant of absence of leave and the petitioners used to be granted absence of leave. He further submitted that even assuming that the stand of the respondents is legally correct that notices are to be sent to their addresses in India, yet, since the petitioner directors are first directors of the company and one of them being the chief promoter, eq ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in the EOGM does not arise. In this connection, he also pointed out the letter dated 28-8-1996 received from IDBI at Annexure K in which even the IDBI had questioned the allotment of shares to the associate companies of the respondent. He submitted that by illegally allotting shares to his own associate companies, the respondent has reduced the majority holding of the petitioners into minority which is a grave act of oppression. Accordingly, he prayed that the allotment of shares to the 3 companies of the respondent should be declared as null and void. 6. He further pointed out that after having increased his shareholding by allotment of shares to his associate companies, the respondent ensured the removal of both the petitioner directors from the Board by which now the control of the management of the company is with the respondent. In the AGM on 30-12-1996, the 2nd petitioner was purportedly shown to have vacated the office of director in terms of the provisions of section 283(1)(g). In the case of this petitioner also, no notices for any of the board meeting were given, even though according to the company, notices for the meetings were sent to him at his address in India. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the removal of the petitioner as the Chairman and director, Shri Chaudhary pointed out that with a view to oust the petitioner, the respondent had manipulated various records of the company to show that the petitioner had not attended board meetings held on 12-3-1996, 27-3-1996, 13-4-1996, 25-4-1996, 24-7-1996, 5-9-1996, 2-12-1996 and 3-3-1997 without obtaining the leave of absence and as such vacated the office of director in terms of section 283(1)(g). It is a fact that the petitioner had not attended any board meeting after February 1996 since no intimation of any meeting had been given to him, as board meetings used to be held whenever he was present in Calcutta. He submitted that the company was never in the habit of issuing notices by UPC. The board meetings used to be convened after ascertaining the convenience of the petitioner through faxes till the disputes started. Even the UPCs produced by the respondents indicate that notices were sent to the address of the petitioner in India while the respondent is fully aware that the said petitioner was NRI residing in USA. Even assuming that the petitioner had not attended 3 consecutive meetings or all Board meeting, in a contin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was stationed at Calcutta, got all the equipments cleared from the Customs. Further, he pointed out that all the equipments were in working condition and were extensively used in the hospital. He also pointed out that when permission was sought from the RBI by the petitioner for allotment of shares, the RBI desired to have an inspection certificate from an authorised agency of the DGFT and accordingly all the equipments were inspected by Superintendence Company of India (P.) Ltd. an authorised agent and the agency had certified the equipments being in good order as late as in March, 1997. He also produced a copy of the certificate dated 7-3-1997. Referring to the annual accounts of the company for 1994-95 to 1996-97, he pointed out that during these years, the turnover of the company was going up and the investment in equipments during these years is negligible indicating very clearly that the equipments imported by the petitioner were extensively used by the hospital. He also referred to copies of various faxes during 1995 annexed with the rejoinder, which were sent by the hospital to the petitioner wherein details of number of patients, surgery carried out etc. had been given. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) who had reportedly installed all the equipments in the hospital, wherein they have mentioned that the hospital was only functioning with this imported equipments. Likewise, he also referred to a letter dated 4-1-1998 from one Dr. Himansu K. Dasmahapatra who had worked as the Cardic Surgeon in the hospital, wherein he has stated that all the equipments relating to his department had worked very well during his time. With these documents on hand relating to the worthiness of the equipments, Shri Chaudhary submitted that the stand of the respondents that the equipments were unusable cannot be sustained. 9. According to the learned counsel, all the imported equipments in the hospital were in use till April, 1997 and fearing that the company would have to allot shares to the petitioner in terms of the RBI approval dated 22-3-1997 (Annexure A-18) against value of the equipments, the respondent along with the 3rd respondent started manipulating the records of the company relating to allotment of shares, vacation of office by the petitioner directors etc. He submitted that if the equipments were un-usable as contended by the 2nd respondent, he has not explained as to why the same was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red even now to bring in ₹ 3 crores by way of cash towards allotment of shares as he would like to fulfil his ambition of providing good hospital facilities to the poor and down trodden. 12. He relied on the following case laws to substantiate his various arguments : u M. Moorthy v. Drivers Conductors Bus Service (P.) Ltd. [1991] 71 Comp. Cas. 136 (Mad.). When notices for board meetings have not been given to all directors, appointment of additional directors in such meetings is invalid. u Gluco Series (P.) Ltd., In re [1987] 61 Comp. Cas. 227 (Cal.) and Bhubaneshwar Singh v. Kanthal India Ltd. [1986] 59 Comp. Cas. 46 (Cal.). Board cannot issue shares in a manner by which an existing majority is reduced to minority and the Court will not allow the existing balance of power in the company to be disturbed. u R.N. Jalan v. Deccan Enterprises (P.) Ltd. [1992] 75 Comp. Cas. 417 (AP). Change in the pattern of shareholding by increasing the shares and subsequent changes in the board of directors would prejudicially affect the interest of shareholders warranting action by the Court. 13. Shri S.B. Mookherjee, senior advocate for the respondents, initiating his argumen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of notice. In a board meeting held on 12-3-1996, 2,21,000 shares were allotted to 3 private companies and relevant Form No. 2 was filed with the Registrar of Companies on 4-4- 1996. All these allotments were made against cash and the cash so realised was utilised to pay the instalments of loan due to IDBI. Therefore, he submitted that not only the company followed legal provisions in this regard but also mobilised funds only for the benefit of the company and not for the purposes of excluding the petitioners from allotments espe-cially when the petitioner himself had expressed his inability to invest more funds. He also pointed out that by a letter dated 13-4-1996, the advocate for the petitioner complained about change of shareholding and the management (Annexure R-1) for which a reply was sent by the advocate for the respondent (Annexure R-2). Later, by a letter dated 30-4-1996, the advocate for the petitioner informed that the disputes between his client and the respondent had been amicably settled and resolved (Annexure R-3). Therefore, as on 13-4-1996, the petitioner had no complaint as far as the shareholding and management of the company were concerned even though now he t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ven though as per article 121(b), no notice need be given to directors who are away from India, yet, notices under UPCs were given to both the petitioner directors for every meeting held after 9-2-1996. Regarding entry of the name of the 2nd petitioner in the annual return made upto 13-12-1996, he submitted that it was an error committed by the person who prepared the report and as a matter of fact Form No. 32 indicating the vacation of office by this petitioner was filed with the Registrar of Companies on 4-3-1997 (Annexure R-10). Therefore, he submitted that the 2nd petitioner vacated office due to his own conduct of not attending the Board Meetings in spite of notices and as such cannot be considered to be an act of oppression. 16. In regard to the vacation of office by the petitioner, the learned counsel submitted that the petitioner did not attend board meetings held on 12-3-1996, 27-3-1996, 13-4-1996, 25-4-1996, 24-7-1996, 5-9-1996 and 2-12-1996 even though notices for these meetings were sent by UPCs to his address at Calcutta. In view of this, in terms of section 283(1)(g), he vacated his office. He further submitted that all the arguments that had been advanced in regar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the RBI approval only through a letter written by Shri Arun Saini dated 6-4-1997. He also referred to the Inspection Report of SGS India Ltd. dated 6-4-1999, an agency suggested by the IDBI to carry out the inspection of the secondhand equipments, to state that this agency has given a report that all these equipments were outdated, out of order and unusable. He also stated that many of the equipments are over invoiced. He submitted that even though the allegation of over invoicing with details was made, yet, the petitioner has not contested the same clearly indicating that some of the equipment were over invoiced. Thus, the learned counsel contended that the petitioner is trying to enrich himself by getting allotment of shares in excess of the actual value of imported equipments. He also submitted that as per export/import policy of the Government, secondhand machinery/equipments could be imported subject to their having a minimum of 5 years residual life, which in this case, has not happened. Therefore, he submitted that no shares could be allotted to the petitioner against the value of the imported equipments. He also submitted that the petitioner fraudulently showed that in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ital with new equipments both by purchase as well as by taking on lease and that under this control, the company has earned tremendous reputation. He further submitted that when the advocate for the petitioner had written to the company on 30-4-1996 that the disputes between the parties had been settled amicably, the petitioner cannot now ventilate any grievance relating to the shareholding and the management. He further pointed out that in view of the strained relationship between the parties, the only way by which the interest of the company could be protected is that there should be parting of ways between the parties. Since the respondent is the majority shareholder, in line with the decision of the CLB that the majority should purchase the minority, we should direct the petitioner to sell their shares to the respondent on a value to be determined by an independent valuer. 19. Shri Mookherjee relied on the following cases in furtherance of his arguments : u Sm. Hemangini Dassee v. Sm. Sarnalatika Dassee AIR 1940 Cal. 227. u Sm. Kanak Lata Ghose v. Amal Kumar Ghose AIR 1970 Cal. 328. u Harihar Banerji v. Ramsashi Roy XLV Indian Appeals 223. u Steamship Belgia, In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cement and that the company would not go to the public. It is also stated that shares worth ₹ 800 lakhs would be issued to NRI resident promoters and others on repatriable basis and the balance to Resident Indian promoters and others. SIA gave its approval dated 6-8-1993 (A-11) in which the name of the foreign collaborator is shown as Dr. Kamal Kumar Dutta in para (i). In para (iv) it is stated that the foreign equity participation would be ₹ 800 lakhs amounting to 88.88 per cent on repatriable basis out of the paid-up capital of the company of ₹ 900 lakhs. It is also noted that the project envisaged import of capital goods worth ₹ 420 lakhs to be financed out of the NRI investment. In para (vii) it is stated that the approval was to be made a part of the foreign collaboration agreement to be executed between the company and the foreign collaborator. In para (xi) it is stated that the approval would be valid for a period of 2 years within which the collaboration agreement was to be filed with the RBI. In the list of additional conditions, it is also stated that any change in the NRI investment or paid up capital, an intimation was to be given to SIA, RBI etc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with reference to the stand of the company that it is no longer an RI hospital in view of no collaboration agreement having been entered into, that, when the acts complained of took place, the approval of SIA was still in force up to March, 1998 and as a matter of fact the company itself had asked for extension of time vide its letter dated 17-10-1997 (Annexure A-7). Thus, if the complaint of the petitioner, being the chief promoter that the company has been hijacked, if established, would definitely merit grant of appropriate relief. 21. At the outset it is necessary to record that, there being only two large shareholders, viz., the petitioner and the respondent, the disputes are practically between the two and it is their conduct that has to be examined in this petition under section 397/398 as to whether the same is oppressive- being harsh, burdensome, lacks in probity and fair dealing and not so much as to whether the same is legal or illegal. 22. We shall first deal with notices for the board meetings as the same have a bearing on practically every issue before us. The respondent contends that notices were issued in accordance with law while the petitioner contends that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ure R-28 indicating that the petitioner used to stay in some hotel or guest house during his visit to Calcutta. Thus, we find even assuming that the notices are to be sent to local addresses in India, yet, the company has not ensured that adequate time is given and that the notices are sent to proper addresses. In equity also, we find that the action of the company to have posted notices for the meetings to local addresses of the NRI directors lacks in probity and fair play as the petitioners being not only the first directors of the company but also substantial holders of the shares, they should have been given notices to their addresses in the USA. Accordingly, we hold that no notices for the board meetings should be deemed to have been given to the petitioners. In view of this finding we do not propose to examine whether the notices were genuine or fabricated other than observing, in view of the contention of the counsel for the respondents, relying on various case laws that UPCs raise presumption of service, that in Mst. L.M.S. Ummu Saleema v. B.B. Gujaral AIR 1981 SC 1191 and in Gadakh Yashwantrao Kankarrao v. Balasaheb Vikhe Patil AIR 1994 SC 678, the Supreme Court has held o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and change in the management. Even assuming that the petitioner had authorised this advocate to send that letter (which is disputed by the petitioner), the circumstances have been changed afterwards. Further additional shares were issued, the petitioner directors were declared to have vacated their offices and allotment of shares against the cost of imported equipments denied. In the changed circumstances, by which the petitioners have been completely ousted from the company, which was not the position when the letter from the advocate of the petitioner was written, we do not think that it would be right to bind the petitioner to the terms of the said letter. 24. Regarding vacation of office by the 2nd petitioner, the company has applied the provisions of section 283(1)(g) on the ground that this petitioner had never attended any board meeting right from incorporation of the company in spite of notice. We have already held that neither in law nor in equity, it could be considered that due notices had been issued to this petitioner to invoke the provisions of section 283(1)(g). Even otherwise, we find that the company had not taken the stand that he had vacated the office when no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplied for leave of absence in case he received any notice for board meetings. 25. In regard to the vacation of office by the petitioner, the provision of the same section 283 (1)(g) were invoked. As per the Form No. 32 filed with the Registrar of Companies, the date of vacation of office by this petitioner was 24-2-1997 even though, if the contention of the respondent that the petitioner had not attended any meeting after 16-4-1996 is correct, he would have ceased to be a director much earlier. This Form No. 32 was filed on 14-3-1997. The company is purported to have informed the petitioner that he had vacated the office, by a letter dated 3-3-1997, the receipt of which is denied by the petitioner. It is on record that the petitioner had convened a board meeting on 3-3-1997 at 11.00 AM and was attended by the directors. It is not clear as to at which time on that day, a letter was issued indicating therein that the petitioner had vacated his office. If it had been written before 11.00 AM, then, the respondent should have been aware of it and should have refrain from attending the said meeting. If the letter was written after the meeting, then, the only conclusion that we could ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed even in the application made to SIA as indicated in paragraph 20 ante, the private placement being made to the petitioner/his associates and the respondent/his associates. However, the resolution passed in the EOGM on 17-2-1996 is an omnibus resolution authorising the Board to allot shares to various entities including mutual fund etc. which would not be possible in view of the stipulation in the SIA approval that any change in the NRI investment was to be approved by the SIA. Therefore, passing the resolution in the EOGM does not give the authority to the Board to allot shares as it liked since the private placement has to be in line with the SIA approval which was current on that day. Even assuming, even though contested by the petitioner, that he had expressed his unwillingness to invest further funds in the company, there was the 2nd petitioner, a shareholder, and two other NRIs who had contributed to the shares as application money. Therefore, the Board should have considered seeking their willingness or otherwise for subscribing to additional shares. One aspect which was not made clear to us, as pointed out by Shri Chaudhary, as to in which board meeting, the decision to h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was made on 24-7-1996, the IDBI nominee director was not present and that IDBI was represented by an observer. An overall assessment of this issue leads us to the conclusion that the allotment of shares was not completely bona fide and as such deserves to be set aside. However, we do not propose to set aside the allotment in view of our directions hereinafter. 27. In regard to allotment of shares against the value of imported equipments, the major objections of the respondent are - neither the approval of the SIA nor the RBI covers allotment of shares against import of equipments, the company was never aware that the equipments were secondhand, as per import policy secondhand equipments cannot be imported, there is no contract or agreement in terms of section 75(1)(b) for allotment of shares other than for cash, the equipments were outdated, overpriced, and unusable and the IDBI had refused to finance the secondhand equipments. 28. We shall examine each of these objections. It is true that there is no mention either in the application to the SIA or in the approval by SIA or the RBI that the NRI investment would by way of supply of equipments. However, the application to SIA a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... charged, being an MBA Graduate and managing some companies, he would have definitely examined the documents connected with the import. According to him, he came to know that these equipments were secondhand only in April, 1996 after being informed by the IDBI about the letter of the petitioner dated 7-2-1996 to the IDBI that all the equipments except one were demonstration equipments and as such could be consi-dered as secondhand equipments for funding purposes. According to the petitioner, the declaration before the Customs indicated that these equipments were secondhand while according to the respondent, no such declaration was made. Even though in the reply, at page 23, the respondent has stated that relevant Bills of entry would be produced, nothing was produced during the hearing. These are of the most relevant documents, in the possession of the company, which would have settled the issue as to whether the company/respondents were aware of that the equipments were secondhand or not when the same were received by the company. The non-production of these documents lead us to presume that the respondent might have been aware that these equipments were secondhand equipments, eve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cedural formalities for import of these secondhand equipments. Thus, it is apparently clear to us that on the day when this board meeting allegedly took place, the equipments were in working condition and those who attended the meeting had no grievance about the functioning of the equipments as it is stated in the resolution Replacement would be considered, if necessary . Thus, there can be no dispute regarding the good working condition of the equipments at least up to April, 1996. Now regarding the later period. The respondent has not produced any Board minutes where it was brought to the notice of the members of the Board that the equipments subsequently became unusable, even though, according to the company Board meetings were held on 25-4-1996, 24-7-1996, 5-9-1996, 2-12-1996 and 3-3-1997. On 15-4-1997, the respondent wrote to the petitioner a letter (Annexure R-20) enclosing therewith a list of 32 equipments, asking the petitioner to take them back as they were lying unused being second hand, defective, outdated and beyond repair and this view was shared and confirmed by the doctors. Whether such a letter was written with the authority of the Board or not has not been clear t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eating the patients, the doctors would have definitely complained as and when they found the equipments malfunctioning. This gives us an impression that at least till the doctors complained in March 1997, the equipments were functioning properly which is also supported by the certificate given by Supind. The respondents rely on the inspection report given by the authorised agency approved by IDBI, viz., SGS India Ltd. dated 6-4-1999 wherein this agency has given a complete adverse report against the equipments. During this inspection, however, the petitioner was not associated as it happened when the petitioner had the equipments inspected by Supind, none from the company was associated. In view of this report of SGS India Ltd. it is clear that by April, 1999, these equipments had become useless. This is, whether due to the deliberate neglect of the equipments by the respondents as alleged by the petitioner or due to inherent defects as alleged by the respondent is something which we cannot determine at this point of time. One aspect which we expressed during the hearing requires mentioning. We expressed our doubt as to whether the petitioner being not only the chief promoter but a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sent in that meeting. One was the appointment of the respondent as the managing director and the other was stripping the petitioner of all his powers. This meeting was held just a week before the arrival of the petitioner on 14-2-1996, the fact of which was known to the respondents as is evident from the Annexure R-28. On this day, excepting the respondent, none of the other directors had any personal stake in the company and on that day obviously the respondent was a minority shareholder. When these decisions would vest all the powers with the minority shareholder director and making the majority shareholder director as a dummy, the other directors should have played a restrained role and should have waited till the next board meeting which was to be held on 16-2-1996 after the arrival of the petitioner. Therefore, we feel that the action of the respondent and other directors reflect complete lack of probity on their part, in taking these decisions. 33. In regard to the meeting on 16-2-1996, even though the petitioner admits that he attended the meeting, his grievance is that the minutes do not reflect the correct proceedings in that meeting. In this meeting, the IDBI nominee i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to conduct any proceedings. In this letter, he has also stated that the proceedings of the meeting could not be incorporated in the minutes book. In other words, it was the third respondent, who is not a director on the board, seems to have assumed the authority to decide whether to minute the proceedings of the board or not. Though in the board meeting held on 23-4-1997, the board had taken a decision not to record the proceedings on 3-3-1997, it appears that this decision was influenced by the letter of the 3rd respondent dated 6-3-1997. Normally, whenever any board meeting is held, the minutes of that meeting are drawn giving factual position of what transpired in that meeting and it is very unusual to refuse recording the minutes of a board meeting. This action of the board gives credence to the complaint of the petitioner that the minutes were not recorded only with a view to nullify the stand by the petitioner that certain resolutions, including applying to the RBI purportedly taken in that meeting. 36. Further, when the board noted on 14-4-1996, the letter of IDBI dated 4-4-1996, fairness demanded that they should have taken up the matter with the petitioner. Not only i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dent cannot claim majority status. The conduct of the respondent in allotting shares to himself at the back of the petitioner and in declaring that the petitioner directors had vacated office etc. and thus taking over the company is highly unfair and lacks in probity. If we were to accept the suggestion/contention of the counsel for the respondent that the petitioners should be directed to sell these shares, it would only mean putting premium on the conduct of the respondent. In case the High Court decision goes against the petitioner, he would cease to be the majority shareholder. Therefore, our reliefs would be confined only to matters relating to those which do not have any bearing on the secondhand equipments. From the facts of the case, it is clear, that neither the allotment of further shares nor the declaration that the petitioner directors had vacated the office, has anything to do with the secondhand equipments. In regard to the allotment of further shares, the prayer of the petitioner is that the allotments should be cancelled or the respondent should be directed to sell all the shares held by his group to the petitioner. Cancellation of the allotments would adversely aff ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for various reasons, we declare that these petitioner directors will continue as directors of the company. To avoid any future controversy relating to issue of notices for the board mee-tings, we also stipulate that notices for all board meetings will be issued to all the directors by registered post with 21 days notice to the addresses of the NRIs directors at their usual addresses in USA/ other countries and to the Indian directors at their addresses in India. We also stipulate that NRI directors will have the right appoint alternate directors and if the right is exercised, then, the alternative directors will also be given notices as stipulated above. 2. The shares allotted in the board meetings on 12-3-1996 and 24-7-1996 will not have any voting rights till the outcome of the proceedings in Calcutta High Court is known. No further shares will be allotted against the share application money with the company either in the names of the NRI investors or in the names of the respondent s group. 3. The petitioner/respondent are at liberty to invest more funds in cash in the company towards sahre capital but the same will be kept as share application money till the disposal of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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