STATE OF RAJASTHAN Vs. I. K. MERCHANTS LIMITED

JUDGEMENT

(1.) The respondents/plaintiffs, in the early 70s, held ordinary shares in a company Bikaner Gypsums Ltd (the company).

(2.) The company, for its operation, increasingly became dependent on the appellant No.1/defendant no.1 (the appellant) for loans, advances and other forms of assistance. The latter accommodated them but insisted that it should have more control over it and that it should become a public sector undertaking. It informed the share holders of the company about its intention to buy their shares. A vast majority of them agreed to sell their shares. By April, 1973 the appellant had acquired 50% of the company's issued and paid up share capital and by 14th June, 1973, 97% of its issued share capital. The Company's name was changed to Rajasthan State Mines and Minerals Ltd, the appellant No.2/Defendant No.2.

(3.) The agreement between the parties was that the consideration for the sale of the shares would be determined by a reputed valuer to be nominated by the Institute of Chartered Accountants. Immediately, the face value of Rs.10/- per share would be paid to the shareholders and the balance amount would be paid on determination of their value. Rs.5,58,780/- (Rs.6,53,780/- in the amended plaint) was received by the respondents/plaintiffs as such consideration in 1973.