NEW STANDARD COAL CO PVT LTD Vs. STATE

JUDGEMENT

(1.) THIS is an application by Provash Kumar Basu, a member of New Standard coal Co. Private Ltd. (hereinafter referred to as the company) for an order revoking, recalling or setting aside the order dated February 7, 1964, under which the Special Officer entered into an agreement dated February 11, 1964, for an order directing the Special Officer not to take any further action under the agreement dated February 11, 1964, for an order directing the Special Officer to make a full and proper inventory of all goods and articles of the Lodna Colliery, Suratand Colliery and Lodna Engineering Works, an injunction restraining Madhavji K. Varma and Sons Private Ltd. , the Respondent no. 6 from taking out any plant, machinery, stores etc. from the Lodna Colliery of the company, an order directing Madhavji K. Varma and Sons Private Ltd. to render account of all raising of coal from the colliery and also directing it to vacate the colliery and make over immediate possession to the Special Officer and for costs. The company was incorporated as a Private company for exploiting certain collieries in the district of Dhanbad.

(2.) THE shares in the capital of the company are held by the members of the family of one Bipinbehari Basu and also by a distant relative Harakali Basu. Particulars of shares held by the different members have been set out under paragraph 6 of the affidavit of the applicant affirmed on May 2, 1964. The applicant holds two shares in his individual and personal capacity and also holds 149 shares jointly with other members of his branch of the family. For sometime past disputes and differences arose between the members of the company with the result that the affairs of the company were not properly conducted, the liabilities of tine company kept on mounting from year to year. To solve-the difficulties the applicant along with other members of the company approached one Chotalal Madhavji Varma, a director of Madhavji K. Varma and Sons Private Ltd. , the respondent No. 6 with a proposal for lease of certain collieries which were then being exploited by the company. Negotiations took place and by letter dated September 4, 1963, an offer was made by the said Varma to hake over the collieries of the company and also the Engineering Works known as Lodna Engineering Company on a lease for thirty years. In October, 1963, two applications were made to this Court by Harakali Bose under sections 397, 398 and 402 of the Companies Act, 1956, regarding the New Standard Coal Co. Private Ltd. and North Burrakar Coal Co. Private Ltd. On October 3, 1963, interim orders were made on both the applications whereby Mr. K. C. Mukherjee, Barrister-at-Law, was appointed the Special Officer of the two companies. The board of directors of the companies was superseded and all powers and functions of the board were vested in the Special Officer. The Special Officer was directed to consider the offer made by Derma for lease of the collieries.

(3.) THEREAFTER the Special Officer carried on negotiations with Varma for lease of the collieries and for this purpose held several meetings of the shareholders of the company. The offer made by Varma was discussed and revised at the meetings held by the Special Officer. At one of such meetings held on November 13, 1963, the terms and conditions of Varma's offer were altered and modified at the suggestions of shareholders. This meeting was attended by the applicant. Subject to the alterations and modifications made at the meeting, the offer of Varma was accepted by all the shareholders including the applicant except four shareholders, namely, Sm. Chabirani Basu, chirakumar Basil, Jaladhi Basu and Bidyut Basu. Subsequently these four members sold and transferred their shares to two of the Varmas on January 15, 1964. On November 14, 1963, the Special Officer made a report to this Court recommending acceptance of the offer of Varma made on his behalf in the letter of November 13, 1963, as modified at the said meeting. On November 22, 1963, an order was made by me, in the application made by the Special Officer for confirmation of the reports made by him dated November 14, 1963, and november 19, 1963, This application was opposed on behalf of Sm. Chabirani Basu, Chirakumar Basil, Jaladhi Basu and Bidyut Basu. By this order directions were given to invite offers for lease of the collieries by advertisements in several newspapers and the Special Officer was directed not to accept the offer of Varma for a period of six weeks from the date of the order, to see if a better offer was received as a result of the advertisement, pursuant to this order, advertisements were made, but no better offers were received by the Special Officer. The said order of november 22, 1963, is of some importance and I shall revert to it later.