MALABAR INDUSTRIAL COMPANY LTD Vs. JOHN ANTHRAPPER

JUDGEMENT

(1.) This appeal is directed against the order passed by the learned Company Judge in O. P. No. 33 of 1982, overruling the preliminary objection raised by the appellant Company, the Malabar Industrial Company Ltd, about the maintainability of the petition filed under S.433(f) and 439(c) of the Companies Act, 1956 by the respondent, a contributory, on various grounds. The learned Judge disagreed with the petitioner before him on most of the grounds but felt that there was a prima facie case that by the sale of the only estate belonging to the company the substratum of the company would disappear and ordered advertisement of the petition.

(2.) Notice was ordered on 21st June 1982 after the petition was admitted. The appellant Company entered appearance and filed its counter affidavit and moved Application No. 262 of 1982 for revoking admission and for dismissal of the petition in limine. This petition was rejected with the observation that the question of maintainability could be gone into before ordering advertisement. Thereafter the preliminary question whether the averments in the petition disclosed a prima facie case for ordering winding up was heard and the order under appeal was passed.

(3.) The company was incorporated in 1918. It has a paid up capital of Rs. 4.5 lakhs divided into 45,000 shares of Rs. 10 each. Ever since its incorporation the company had engaged itself in the plantation business only. The only estate owned by it is the Skinnerpuram Rubber Estate. It appears that three years before filing of the petition, there was continuous labour unrest in the estate and that in 1981 the labour trouble assumed serious proportion on account of unreasonably high demands made by the workers for Onam advance. The company had to seek police protection and lockout had to be declared in the estate for more than six months. During the period of lockout the then General Manager who is the present Managing Director was attacked a number of times by the workers. Under these circumstances the Directors of the company decided on 4th May 1982 in the best interest of the company, to sell the estate. In fact, even before this, sale of the estate was under the contemplation of the company and the company had received certain offers from impending buyers. On 17th May 1982 an advertisement was made in a newspaper inviting offers for the purchase of the estate. An extraordinary meeting of the members of the company was convened on 15th June 1982 for amending some of the Articles of Association and for getting the consent of the members for the proposed sale. The members who attended the meeting consented to the sale and the Articles of Association were amended imposing further restriction on the transfer of shares and lifting the minimum share qualification required for being appointed as Director. It was against this background that the petition was filed on 18th June 1982 by the respondent before us for the reliefs mentioned above.