MAHINDRA AND MAHINDRA LIMITED Vs. UNION OF INDIA

JUDGEMENT

(1.) The two questions of some importance which arise for determination in this case are :

(2.) The first petitioner, Mahindra & Mahindra, is a company incorporated under the Indian Companies Act. It was originally incorporated as a private company, under the provisions of the Indian Companies Act, 1913. It became a public limited company later on and by any standard is a public company of good standing and has had commendable growth. Its total income for the financial year 1975-76 was Rs. 61 crores, for 1976-77 Rs. 69 crores, for 1977-78 Rs. 102 crores and for 1978-79 Rs. 143 crores. Its profit after tax for the financial year 1975-76 was Rs. 1.16 crores. for 1976-77 Rs. 1.58 crores, for 1977-78 Rs. 3.08 crores and for 1978-79 Rs. 9.15 crores. The Company has been paying dividends regularly varying from 9 per cent to 22 per cent per annum ever since it became a public limited company in 1955. The figures of total managerial remuneration paid to the highest paid whole-time director of the first petitioner as percentage of the net profits in accordance with the provisions of the Companies Act, 1956, hereinafter referred to as the Act, for the financial years ending on 31st October of each year has been as follows : <FRM>JUDGEMENT_1232_ILR(DEL)2_1980Html1.htm</FRM>

(3.) Prior to November 1, 1977 the Company's business consisted mainly of manufacture of jeeps, utility vans and trucks. The Company had on its Board to act as Executive Directors the following :