VIVEK GOENKA Vs. MANOJ SONTHALIA

JUDGEMENT

(1.) APPLICATIONS Nos. 841 and 5129 of 1992 were filed by the sixth defendant in the suit for the following reliefs : Application No. 841 of 1992 : To pass an order of injunction restraining the plaintiff/respondent herein from exercising any powers or functions in excess of what has been conferred upon him by resolution dated September 5, 1992, by the board of directors of the third defendant company, pending disposal of the above suit. Application No. 5129 of 1992 : To vacate the order dated October 1, 1992 , passed by this court to the extent that an interim direction has been made to maintain the status quo as on October 1, 1992 , so far as the office and powers of the plaintiff as the joint managing director of the third defendant is concerned. The plaintiff in C. S. No. 1246 of 1992 is the only respondent in these two applications. Application No. 5998 of 1992 was filed by the plaintiff for the following relief : This court should be pleased to ensure that the applicant's powers as joint managing director of the third defendant company as on June 24, 1992 , are maintained pending disposal of the above suit. The sixth defendant is the only respondent in that application. The short facts are as follows : The plaintiff has filed C. S. No. 1246 of 1992, against the first defendant company (in short "npbs"), four other newspaper companies and six other persons. There are in all 14 defendants. This suit is primarily concerned with the validity of a board meeting of the second defendant, Indian Express ( Bombay )Limited, held on January 23, 1991 , and certain resolutions for appointing additional directors. The plaintiff also prays for declaration and permanent injunction in respect of various acts committed by the sixth defendant along with other directors, particularly Nusli wadia, the seventh defendant and Venu Srinivasan, the eighth defendant. Many interlocutory applications have been filed by the plaintiff in this suit. The plaintiff has also filed C. S. No. 1247 of 1992 against NPBS and nine others. The defendants include Nusli Wadia, Venu Srinivasan and Mrs. Saroj Goenka and her three daughters. This suit challenges the transfer of shares in the aforesaid board meeting held on January 5, 1991, and also seeks for a declaration that 24. 32 per cent. shares have been held in trust for the benefit of the plaintiff's brother.

(2.) SERIOUS allegations have been made regarding the holding of the board meeting on January 5, 1991, and the extraordinary general meeting on January 23, 1991. According to the plaintiff, no notice has been given in respect of these meetings and the same were conducted clandestinely. The resolutions passed therein were filed before the Registrar of Companies through the office of Sundaram Clayton Ltd. , of which the eighth defendant is the managing director. According to the plaintiff, this was done with the intention to suppress from the plaintiff and his mother the fact of the illegal share transfer. The reasons as to why the meetings and the resolutions passed are invalid have been set out in detail in the plaint. Therefore, I am not repeating the same here. Similarly, in the other suit (C. S. No. 1247 of 1992), it is stated that the shares were neither intended to be, nor were transferred as there was no consideration for the same. According to the plaintiff, the shares were retained only in trust. The reasons as to why the share transfers are null and void have been set out in the plaint in that suit, with which we are not presently concerned.

(3.) ON August 28, 1989, the late R. N. Goenka (hereinafter in short called "rng") transferred 24. 32 per cent. retained by him in favour of the plaintiff and the sixth defendant. The shares were transferred in two parts. In the first part, the sixth defendant is the first joint shareholder and in the second part, the plaintiff is the first joint shareholder. The plaintiff along with his letter dated November 12, 1990, addressed to the seventh defendant enclosed 6, 240 equity shares of the first defendant, 3, 040 equity shares of the first defendant, standing in the joint names of the plaintiff and the sixth defendant, and 4, 000 preference shares of the first defendant. It is mentioned in the said letter, the share certificates were enclosed to the seventh defendant as desired by the late R. N. Goenka on september 26, 1990, in the presence of the seventh defendant. It is also mentioned in the said letter that sending the share certificates as mentioned therein would restore the faith and trust that seemed to have been lost by the grandfather. Incidentally, it must be pointed out that this letter is found in the compilation of the plaintiff's additional documents at page 55. There is also no dispute or denial of execution of the said letter and in fact, the plaintiff would also place reliance on the said letter. It is thereafter, a meeting of the board of directors of the first defendant company was held on january 5, 1991, at Bombay. At the said meeting, defendants Nos. 7 to 9 were appointed as additional directors and they participated in the said meeting after their appointment. The late R. N. Goenka and the sixth defendant had participated. In the said meeting, certain shares were transferred in the name of R. N. Goenka, which were standing in the names of the plaintiff and the sixth defendant either individually or jointly. According to the plaintiff, the said meeting is invalid because he had no notice of the said meeting and, therefore, there was no occasion for granting leave of absence. It is relevant to notice that the whole case of the plaintiff rests on the validity or otherwise of the aforesaid meeting held on January 5, 1991. It is rightly pointed out by Mr. P. Chidambaram that the controversy between the parties started only from January 5, 1991. There is also no controversy that the sixth defendant has been holding 50. 40 per cent. shares of NPBS even in 1986 and 50. 56 per cent. in September, 1989. It is also not in dispute that he became the first joint shareholder of 12. 16 per cent. in 1989, and is entitled to exercise his rights as the first joint share holder in respect of the said 12. 16 per cent. In fact, the plaintiff and the sixth defendant had also signed the annual return of NPBS made up to March 31, 1988, and December 27, 1989, evidencing the aforesaid shareholding. These annual returns are found in pages 1 to 16 of compilation'B'furnished by the sixth defendant. The return as on november 30, 1991, has been sent to the Registrar of Companies on December 30, 1991, by one Rajendra Kumar, secretary of the company. In this return, the plaintiff has not signed but the sixth defendant and the company secretary had signed.