RATTAN CHAND JAIN Vs. UBEROI LIMITED

JUDGEMENT

(1.) This appeal is directed against the order dated 18 February 1981 passed by the learned Company Judge in CA No.647/79, reviewing his earlier order dated 24 October 1979, made in CA No.318/79 and giving certain directions. The appeal is preferred by one Shri Rattan Chand Jain, who claims to be a majority shareholder alongwith other shareholders of his group, (hereinafter referred to as the Jain Group) in i M/s oberoi Ltd a Public Limited Company. Respondents No.2 to 11 are the other shareholders of the company; respondents No. 2 to 8 being the members and friends of the Uberoi Group, respondent No.9 is one Shri i O.PTaneja and respondents No. 10 and 11 are S/Shri R.P.Jaggi and D.L.Jaggi respectively, the two main members of the Jaggi Group.

(2.) To understand and appreciate the controversy involved in the appeal it will be necessary to recapitulate some material facts.

(3.) M/s Uberoi Ltd., respondent No. 1, was incorporated sometime in the year 1913 with a nominal capital ofRs. 10 lakhs divided into 10,000 equity shares of Rs.100.00 each. The issued and paid up capital of the company was Rs.5 lakhs and all the 5,000 shares were exclusively held by members of the Uberoi Group. It appears that on account of certain difficulties in (he management of the affairs of the company and lack of interest in the enterprise or financial inability to provide the working capital, in March 1972 Uberoi Group transferred 3695 shares in favour of Jaggi Group for a consideration of Rs.4 lakhs and on the basis of an arrangement, inter alia, providing that Uberoi Group would have the majority on the Board of Directors of the Company notwithstanding the transfer and would provide a sum of Rs.4 lakhs by way of working capital. Thereafter Uberoi Group continued to dominate the Board even though representative of the Jaggi Group was the Managing Director of the Company.