VAISHNAV SHORILAL PURI Vs. KISHOR KUNDAN SIPPY

JUDGEMENT

(1.) All these appeals under the Letters Patent raise by and large common questions of law and facts and are therefore heard and are being decided together. These appeals arise principally as a result of a dispute between two groups of business magnets, i. e. Puri Group and Sippy Group, to claim the general agency business with an International shipping company by name Contship containers Lines Ltd. (for short "contship") which is engaged in operating vessels for transport of cargo. These Sippy Group and Puri Group are having equal shares and equal number of directors in two Indian Shipping companies by name Samrat Shipping Company Ltd. (for short "ssco") and Samrat Shipping and Transport Systems ltd. (for short "ssts"). Both these companies are private companies. The appeals arise out of the allegations of oppression and mismanagement by the Sippy group against the Puri Group and the proceedings under the Companies Act on account of the diversion of the contship agency from SSTS to a company floated by the puri Group.

(2.) This SSTS was having principally two types of businesses; one was agency business and the other was charter business. The agency business included the business with and for Contship. The agency business was all throughout being looked after by Puris whereas the charter business was being looked after by Sippys. The major profit of the company was through the agency business. It is the grievance of the Sippy Group that puri Group diverted the agency business with Contship to another company floated by them and named as Samrat shipping and Logistics Ltd. (for short "samrat logistics") whose name was later on changed to Seaworld shipping and Logistics Pvt. Ltd. (for short "seaworld"). It was alleged by the Sippy Group that this diverting of business by Puris was in breach of their fiduciary obligation as directors and amounted to its oppression in SSTS as well as in SSCO within the meaning of section 397 of the Companies Act, 1956 (for short "the Act"). This grievance was the main cause leading to filing of two company petitions under sections 397, 398 and 399 read with 402, 403 and 406 of the Act by Sippy Group to the Company Law Board (CLB) and seeking a direction to make good the advantage gained as provided under section 88 of the Indian Trusts Act, 1882. The defence of Puri group was that there were other prior disputes on financial aspects between Puris and Sippys and there was no confidence subsisting between the parties. Besides, the agency agreement with SSTS had been terminated by contship itself as per the terms of the agreement by a three months' notice dated 1.9.2001 and had come to an end on 30. 11.2001. Therefore, no corporate opportunity was any longer available to SSTS to claim this business with Contship. Contship had changed their agents in india in the past also. Therefore, according to Puris, the grievance about the alleged diversion of business with Contship to Seaworld cannot amount to breach of any fiduciary duty and/or oppression or mis-management nor any direction to make good the advantage be passed. These company petitions were substantially allowed by the CLB leading to four appeals by Puri Group to a single Judge of this Court under section 10-F of the act. The appeals have been substantially disallowed by a common judgment and order dated 23rd February 2004 and this common decision on those appeals has led to the present group of appeals under Letters Patent. The appellants have taken out Notices of Motion for stay. Apart from Motions for stay and other interlocutory reliefs, a notice of motion concerning one property of the companies occupied by a third party has been taken out by that third party in these appeals. All these motions are also heard and are being decided along with these appeals.

(3.) The short facts leading to these appeals are as follows:-"this company-SSCO was incorporated in the year 1975 as a private shipping company with equal shareholding of Sippy Group led by one Kundan Sippy and another group known as Jaisingh Group. Vaishnav Puri of the Puri Group was employed at that time as a Senior manager with Tata Group of Companies and handled its shipping liner business. Some times in 1977-78, vaishnav Puri joined SSCO leading to Sippy Group, jaisingh Group and Puri Group each having 33% shareholding in SSCO. "