MALLESWARA FINANCE AND INVESTMENTS COMPANY P LIMITED AND SHOE SPECIALITIES PRIVATE LIMITED Vs. COMPANY LAW BOARD

JUDGEMENT

(1.) WRIT Appeal No. 806 of 1994.--This writ appeal is by the petitioner against the judgment of the learned single judge in WRIT Petition No. 19256 of 1993, dated May 10, 1994. This writ appeal was heard along with C. M. A. Nos. 743 of 1993 and 875 of 1994, since they are connected with the same matter. C. M. A. No. 743 of 1993 is by the third respondent in the writ petition and C. M. A. No. 875 of 1994 is by the eighteenth respondent.

(2.) THE relevant facts in the writ appeal are as follows : According to this appellant, as per the resolution dated April 30, 1992, of the third respondent-company, it was resolved to increase the share capital from 5, 000 equity shares to 25, 000 equity shares having a value of Rs. 10 per share. As per article 6 of the articles of association, the same was offered to all the shareholders of the company. Since two shareholders did not agree to purchase the same within the period, the same was offered to the eighteenth respondent, another shareholder, who agreed to purchase the same. It was originally offered 8, 000 shares according to the proportion of its holding. But it wanted an additional allotment of 12, 000 shares more which was also agreed to be allotted. On that basis, all the 20, 000 additional shares were allotted to the eighteenth respondent.

(3.) ON June 15, 1992, the third respondent informed the petitioner that the 20, 000 equity shares which stood in the name of the eighteenth respondent stood transferred in the name of the petitioner and directed that the name of the petitioner be recorded in the registers. The said fact was informed to the petitioner by the third respondent by letter dated June 16, 1992.It is the case of the petitioner/appellant that respondents Nos. 4 to 7 filed an application before the first respondent herein under sections 397 and 398 of the Companies Act against the third respondent and others seeking the intervention of the Board. In that proceeding, the petitioner was not made a party. The petitioner was informed about the pendency of such a proceeding by the first respondent on the basis of a notice asking it to produce certain documents stated therein. In compliance with the direction, the petitioner/appellant produced the documents. In spite of the production of the documents, the petitioner was not discharged. The petitioner engaged an advocate to be present in the proceedings as a spectator since it was interested in the proceedings.