K B WAS Vs. COCHIN REFINERIES LTD

JUDGEMENT

(1.) THE petitioner, a share-holder of the Cochin refineries Ltd. , Ambalamugal (which will hereinafter be referred to as the company) prays for an order winding up the company under sub-sections (e) and (f) of S. 433 of the Companies Act, 1956. THE company was incorporated on September 6,1963 with a nominal capital of Rs. 15 crores divided into 15 lakhs shares of Rs. 100/- each. THE issued, subscribed and paid up capital of the company is 7 crores of rupees made up of 7 lakhs equity shares of Rs. 100/- each. On April 27,1963 a formation agreement was entered into between the President of India (Government of India) of the first part and phillips Petroleum Company of U. S. A. (Phillips) of the second Dart and Dunken Brothers and Company Ltd. (Dunkens) of the third part. Certain clauses of this agreement were modified on December 20,1968.

(2.) THOUGH several allegations and averments are made in this petition, at the time of the hearing, the learned advocate appearing for the petitioner submitted that he is pressing the petition only under the just and equitable clause of S. 433 on the following grounds: (i) As per the formation agreement referred to above, 2 directors were to be taken from the group of 'other share-holders' and till now this stipulation in the agreement has not been complied with and thereby the company has violated the terms of the agreement. (ii) The company has entered into sole selling agreement with Indian Oil Company since the beginning and the said agreement has not been renewed in accordance with the provisions in S. 294 of the Companies Act, 1956. (iii) The petroleum products are sold by the company to the Indian Oil Company on credit basis. The company borrows capital on a very high interest and sell its products on credit to the Indian Oil Company on a lesser rate of interest thereby resulting in loss. (iv) The company is indebted to Phillips Petroleum company to the tune of three crores of rupees and this debt has not been paid so far.

(3.) APPLICATION No. 229 of 1975 was filed by the company stating that the advertisement of the petition will seriously prejudice the company and therefore the petitioner may be restrained from advertising the petition and proceeding further with the petition.