JYOTI C. RAHEJA Vs. AASIA PROPERTIES DEVELOPMENT LTD.

JUDGEMENT

(1.) These two appeals have been filed under Sec. 10F of the Companies Act, 1956, challenging the order dtd. 19/9/2006 passed by the Company Law Board, Principal Bench, New Delhi (hereinafter referred to as 'CLB'), taking exception to different parts of the same order. While the appellants in Appeal No.6 of 2006 are aggrieved by the direction contained in the impugned order of the CLB, declaring that the original petitioner before CLB i.e. Aasia Properties Development Limited (respondent No.1) in the said appeal was entitled to nominate one director on the Board of the Company - Juhu Beach Resorts Limited, the appellant in Appeal No.11 of 2006 i.e. the aforementioned Aasia Properties Development Limited, now known as Hinduja Realty Ventures Ltd., is aggrieved by the findings rendered by the CLB on the aspect of manipulations of records of the Company relevant for the date of acquisition of 1/3rd shares of the Company by the said petitioner, as also denial of prayer for representation on the Board of the Company. The appellants in both the appeals have made rival submissions on analysis of Sec. 397 read with Sec. 402 of the Companies Act, 1956 by the CLB and its effect on the question of alleged oppression suffered by the original petitioner before the CLB.

(2.) For the sake of convenience, the appellants in Company Appeal No.6 of 2006 are referred to as 'Rahejas' and the appellant in Company Appeal No.11 of 2006 is referred to as 'Aasia Properties'. Although Aasia Properties subsequently became Hinduja Realty Ventures Ltd., since the original petition before the CLB was filed by Aasia Properties, this order shall refer to the said party as 'Aasia Properties' for the sake of convenience.

(3.) It would be appropriate to briefly refer to the facts leading upto filing of these appeals. On 15/1/1974, the aforementioned Juhu Beach Resorts Limited, which is respondent No.2 in Appeal No.6 of 2006 and respondent No.1 in Appeal No.11 of 2006 (hereinafter referred to as the 'Company') was incorporated as a private limited company under the Companies Act. In 1978, two groups of shareholders i.e. Shah Group and K. Raheja Group took over the Company with the Shah Group holding 1/3rd shares numbering 633 shares and the K. Raheja Group holding the balance 2/3rd shares numbering 1267 shares. On 26/6/1981, Ashok Hinduja, who was a director of Aasia Properties (then known as 'Mecca Properties'), was appointed as an additional director in the Company. While Aasia Properties claims that the said Ashok Hinduja participated in the affairs of the Company on an oral understanding that the Hinduja Group would have proportional representation and equity of rights in management, the said claim is stoutly denied by Rahejas. It is an admitted position that there is no written document about such alleged oral understanding.