(1.) Petitioner no. 1 - Cibatul Limited is a Company registered under the previsions of the Indian Companies Act, 1956. Petitioner no 2 is working as the Managing Director of petitioner no. 1. Petitioners nos 3, 4 and 5 are the shareholders of petitioner no. 1. Petitioner no 2 is the professional Managing Director. He, after having passed and obtained M. Sc. decree in Organic Chemistry obtained Doctor's Degree in Switzer land in the vear 1949. Thereafter in the year 1950 he joined service and" started his career with petitioner no. 3. Thereafter in the year 1960 peti tioner no. 1 -Company was incorporated. In the year 1966 petitioner no 1 -Company started manufacturing business. Petitioner no 2 thereafter in the year 1967 joined petitioner no. 1 - Company and became its Managing Director for the first time. He was appointed for a period of five years Again he was appointed in the year 1972 as the Managing Director for a period of five years and he continued to serve petitioner no. 1 in that capacity upto 1977. Thereafter petitioner no. 1-Company decided to re appoint petitioner no. 2 again for a period of five years and for that our pose the terms and conditions were settled and an application was sub-nutted to the Government of India for the purpose of obtaining sanction and that petition was submitted on 16-8-1977.
(2.) Thereafter on 28-1-1978 the Government of India sanctioned and gave approval for a period of two years and the terms and conditions which were set out by the Company were revised. Under these circumsta nces the petitioners ultimately filed this Special Civil Application. It may be stated here that the terms and conditions which were agreed showed that the appointment was to be made for a period of five years. The salary which was fixed was Rs. 5,000/- per month with annual ircrement upto Rs. 500/-at the discretion of the Board of Directors payable from January of each calendar year. It was also agreed to give commission upto one percent of the net profits of the company computed in the manner laid down in sec. 309(5) of the Act subject, however to a maximum of 50% of the annual salary, the amount of commission payable to be determined by the Board of Directors at its sole discretion within the above limit. Perquisites were also agreed between the parties and a special mention may be made to gratuity, medical benefits and residential accommodation. Gratuity fixed was not exceeding three-forth of a month's salary for each ccmpleted year of service, as per the scheme of Approved Gratuity Fund applicable to the Officers of the Company. Medical benefits for self and family included reimbursement of expenses actually incurred, the total cost of which to the company shall not exceed three months salary, for a period of every three jears of service. So far as residential accommodation is concerned it was agreed that the rent will be recovered at the rate fixed by the company and the cost of the same to the company will not exceed 25% of the salary. The monetary value of this perquisites will be evaluated as per Rule 3 of the Income Tax Rules, 1962. The other terms included Company's contribution towards Provident Fund, Pension, Leave, free use of car, personal accident insurance and leave travel facility. When the Government of India granted approval under Secs. 269 and 198(4)/309(3) of the Companies Act, 1956 what was done was that reappointment of petitioner no. 2 was approved not for a period of five years, but for a period of two years...As regards the salary though Rs. 5,000/ ~ per month were approved, increment of Rs. 500/- per year was not approved and a substantial reduction was made in commission and the commission approved was one percent of the net profits of the Company computed in the manner laid down in sec. 3C9 (5) of the Act subject however, to a maximum of Rs. 10,000/- per annum. This was a substantial reduction inasmuch as an amount of Rs. 20.000/- atleast would be payable less to petitioner no. 2 in view of the revised terms. In gratuity also the revision was made which stated as under :-
(3.) It was submitted in the petition that Secs. 269 and 637AA of the Indian Companies Act, 1956 impose unreasonable restrictions on the rights of the shareholders of petitioners nos. 1 and 2 to carry on business on terms offerred and accepted and results in hostile and discriminative treatment qua management personnel and public limited companies and their subsidiaries and are violative of the petitioners' rights under Articles 14 and 19(1) (g) of the Constitution of India.
ABOUT US "REGENT COMPUTRONICS PVT. LTD." is a Company incorporated in 1991 under the provisions of the Companies Act, 1956. Since its inception to 1995, the Company was busy in carrying out the activities related to various Banks' Job Work..
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