INDOWIND ENERGY LTD Vs. WESCARE I LTD

JUDGEMENT

(1.) Leave granted.

(2.) The appellant and respondents 1 and 2 are companies incorporated under the Companies Act, 1956. Wescare Care (I) Ltd., the first respondent (for short 'Wescare'), is in the business of setting up and operating/managing windfarms and generation of power from Wind Electric Generators. Subuthi Finance Ltd - second respondent ('Subuthi' for short) is a promoter of the appellant company - Indowind Energy Ltd., (referred to as 'Indowind'). On 24.2.2006 an agreement of sale was entered into between Wescare and Subuthi. The agreement described "Wescare (India) Ltd. including its subsidiary RCI Power Ltd" as the "seller/Wescare". It described Subuthi Finance Ltd. and its nominee as "buyer" and as the "promoters of Indowind Energy Ltd." Under the said agreement, the seller agreed to transfer to the buyer certain business assets of the seller for a consideration of Rs.98.19 crores, of which Rs.24.19 crores was payable in cash and Rs.74 crores by issue of 74 lakhs shares (of the face value of Rs.10/- at a premium of Rs.90/- per share). Clause 10 of the agreement relates to arbitration. Clause 11 of the agreement relates to approval. The said clauses are extracted below :

(3.) The Board of Directors of Wescare at its meeting held on 28.2.2006 accorded approval to the agreement dated 24.2.2006. The Board of Directors of Subuthi at its meeting held on 1.3.2006 approved the said agreement. There was however no such approval by the Board of Directors of Indowind.