A M VARKEY Vs. J R MOTISHAW

JUDGEMENT

(1.) This is an application under S.398 of the Companies Act, 1956 Drought by one of the 145 members of a company called the Udayagiri Rubber company Limited, with the written consent of 16 of the otter members for compliance with the requirements of S.399. A principal shareholder of the company, J. R. Motisaw by name, has, on his application, been impleaded as a respondent under S.405. Notice was issued to the Central Government as required by S.400, and the Central Government has made a representation confined to affirming or denying such averments of fact in the application as are within the knowledge of the Registrar of Companies and referring to an order made by It under S.409(2) on a complaint made by the managing agents of the company, another company by the name of A. V. George and Company Limited regarding a threatened change in the Board of Directors. The company itself has entered appearance through its Managing Agents and has lent strong support to the petitioner.

(2.) The company was Incorporated In 1937 for the purpose of acquiring certain rubber estates and carrying on the business of planting and of other allied Industries. A. V. George and Company Limited have been its managing agents from Its Inception. By 1952 the company had sold the rubber estates it had acquired; and with the proceeds it bought a tea estate called the Ashley Tea Estate for Rs. 7,50,000/-. It has since expended about Rs. 3,00,000/- on the estate on words of a capital nature so that its total investment on the estate is about Rs. 10,50,000/-. This estate is now its sole undertaking.

(3.) The dispute culminating in the present application has arisen out of the Insistence of the respondent who, as I have already said, is himself the holder of a large number of shares and, by reason of his influence over some other shareholders commands a majority of the votes, that the estate which is the sots undertaking of the company should be sold for a price of not less than Rs. 8,00,000/-. This is strongly opposed by the petitioner and by the managing agents (the petitioner, who holds 10 equity shares of the face value of Rs. 10/- each out of a total of 30,000 shares, is a first cousin -- once removed -- of the managing director of the managing agent company, and, it is said, is also an employee of a concern run by the managing agents) according to whom the sale of the sore undertaking of the company which is a profitable undertaking would be greatly projudicial to its interests.