RAM PARSHOTAM MITTAL Vs. HILLCREST REALTY SDN BHD

JUDGEMENT

(1.) These Special Leave Petitions have been taken up for final disposal at the admission stage itself. SLP(C)Nos. 1069-1071 of 2009 have been filed by Ram Parshotam Mittal and Mrs. Sarla Mittal, who were the Respondent Nos.2 and 3 in FAO(OS)No.282 of 2005 and Appellant Nos.2 and 3 in FAO(OS)Nos.426 and 440 of 2008, against the common judgment dated 14th January, 2009 passed by the Division Bench of the Delhi High Court in the above-mentioned appeals. SLP(C)Nos.9212-9214 of 2009 have been filed by M/s. Hillcrest Realty Sdn. Bhd., which was the appellant in FAO(OS)No.282 of 2005 and the Respondent No.1 in FAO(OS)Nos.426 and 440 of 2008, against the same judgment.

(2.) Although, the Special Leave Petitions mainly involve the interpretation and application of Section 87(2) (b) and Section 90(2) and other connected provisions of the Companies Act, 1956, to the facts of this case, it is necessary to briefly set out the said facts to appreciate the background in which the said questions have arisen.

(3.) M/s. Hotel Queen Road Pvt. Ltd, which is the pro forma Respondent No.3 in all these Special Leave Petitions, was incorporated as a Special Purpose Vehicle from 23rd August, 2001 for taking over the assets of Hotel Ashok Yatri Niwas, which was a unit of the India Tourism Development Corporation (hereinafter referred to as 'ITDC'), and to manage the same as part of the disinvestment process initiated by the Government of India. After the transfer of assets was completed through a Scheme of Arrangement of Demerger between the ITDC and Hotel Queen Road Pvt. Ltd., which was sanctioned by the Government of India on 5th July, 2002, the Government of India invited bids for the purchase of 99.97% of the total voting equity share capital of Hotel Queen Road Pvt. Ltd. The requisite shares in the said Company were sold to the successful bidder, Moral Trading and Investment Ltd., by two share purchase agreements dated 8th October, 2002, entered into between the President of India, Moral Trading and Investment Ltd. and Hotel Queen Road Pvt. Ltd. On the same date an agreement was entered into between the President of India and Hotel Queen Road Pvt. Ltd., whereby the land on which Hotel Ashok Yatri Niwas was erected, was leased out to the Company for 99 years. Simultaneously, a meeting of the Board of Directors of the Company was convened in which Mr. Ram Parshotam Mittal, Mr. Ashok Mittal, Mrs. Sarla Mittal and Mr. C.S. Paintal were appointed as Additional Directors and in December, 2002, their appointment was approved at a meeting of the Company. A further resolution was passed to increase the share capital of the Company from Rs.90 lakhs to Rs.33 crores. The additional capital was divided into 71 lakh equity shares of Rs.10/- each and 25 lakh preference shares of Rs. 100/- each. The Articles of Association of Hotel Queen Road Pvt. Ltd. were amended to exclude preference shareholders from having any voting rights.