NIRAD AMILAL MEHTA Vs. GENELEC LIMITED

JUDGEMENT

(1.) Heard. By consent, the motion is heard finally at the stage of admission itself.

(2.) By this motion the plaintiff who is a shareholder of the defendant no.1 company, seeks relief of injunction restraining the defendant no.5, who is the purchaser of the company s property under a deed of conveyance dated 13th December 2007 from selling, alienating, creating third party rights, developing or carrying out any construction or parting with the possession the property purchased by it (hereinafter referred as suit property ) till the disposal of the suit.

(3.) The facts giving rise to the dispute are that defendant no.1 is a company incorporated registered under the Companies Act, 1956. The defendant nos.2, 3 and 4 are its directors. The defendant no.5 is the purchaser of the suit property which formerly belonged to the defendant no.1 company. The defendant nos.6 and 7 are the directors of defendant no.5. The defendant no.1 company is said to be a Sick Industrial undertaking. In view of the accumulated losses, the defendant no.1 approached the Board of Industrial and Financial Reconstruction (for short "the BIFR"" under Sick Industrial Companies Act. The BIFR came to the conclusion that defendant no.1 was not viable and has recommended its winding up. However, no formal order of winding up has yet been passed by the Court and the defendant no.1 still continues to be managed by its Board of Directors which consists of 3 directors viz. the defendant nos.2, 3 and 4. The defendant no.1 company has its undertaking at the suit property. On 23rd March 2007, a resolution was purportingly passed by the defendant no.1 company in its general meeting to sell the suit property. In pursuance of the said resolution, the defendant no.1 company sold and transferred the suit property to the defendant no.5 for a consideration of Rs.6 crores 95 lakhs. The defendant nos.2, 3, and 4 as the directors of the defendant no.1 company signed the conveyance as vendors in favour of the defendant no.5. The plaintiff who is a shareholder of the defendant no.1 company has field this suit, as a derivative action, challenging the said conveyance.