KANIKA MUKHERJI Vs. RAMESWAR DAYAL DUBEY

JUDGEMENT

(1.) THIS is an appeal against an order made by S. P. Mitra, j. , on the 22nd March, 1963 in an application made by Bameswardayal dubey under sections, 397 and 398 of the companies Act, 1956 (hereinafter referred to as the "said Act" ). The facts in this case are as follows: 1. There is a Cinema House situated at 67, Howrah Road in Howrah, the land and building originally belonged to Batanlal Chamaria and at present stands in the name of protap Properties Private Ltd. , of which the said batanlal Chamaria is the Managing director It is in 1949 that we come across the mention oi Durgapada mukherji, who at one time was working as rent collector for Ratanlal chamaria. On the 22nd November 1949, we tina Ratanlal writing to the District magistrate, Howrah, stating that he had let out the Cinema House to durgapada. who was to run the same under the name and style of "asoke Cinema", as the proprietor thereof. The letter was written for the purpose of obtaining a license for running the said Cinema. Durgapada obtained a temporary license at first and thereafter, a permanent license. In October, 1953 Ratanlal transferred the said properties to pratap Properties Private Ltd. , and Durgapada continued to take out the license to run the cinema. On the 24th March, 1955 a private limited company was incorporated under the name and style of "asoke Cinema Private Ltd. ", by Durgapada, his wife Kanika Mukherji, hiralal Sanyal and his wife Santilata Devi. Hiralal Sanyal was at the material time employed by Ratanlal. Sm. Kanika Mukherji is the appellant in this case. In April, 1955 an agreement was entered Into between Durgapada and his wife on the one hand and the Asoke Cinema Private Ltd. , on the other, to sell to the said company the business run under the name and style of 'asoke Cinema. ' by the vendors, for a sum of Rs. 15,000 |- which amount was to he satisfied by the allotment to the vendors or their nominees, of a number of shares in the company and by undertaking to pay the debts and liabilities thereof. On the 1st January, 1956 a cinema license was taken out in the name of Hiralal Sanyal- At or about this time, Hiralal and his wife held 750 shares and the remaining 750 shares were held by Durgapada and his wife. In June, 1956 Hiralal and his wife transferred 749 shares out of their holdings in favour of the petitioner Rameswar-dayal Dubey and Bachraj Chamaria the respondent No. 1 both of whom at the material time were In the employ of ralanlal. On the 16th November, 1956 durgapada and. his wife transferred 749 shares out of their holdings of 750 shares in favour of Bachraj and his nominees. After the above transfers, the shares of Asoke Cinema Private ltd. , Were held as follows:- <FRM>JUDGEMENT_4_TLCAL0_1965Html1.htm</FRM>

(2.) CHANDI Prosad is a nephew of bachraj and Rameswardayal Dubey the petitioner was in the employ of Katanlal and was actually looking after some of his litigations, including proceedings before the Rent Controller in respect of the Cinema House, initiated by Durgapada. On [he 27th June, 1956 Bachraj Chamaria was appointed as the direct or-in-charge of the company, On 2nd July, 1956 Hiralal Sanyal was appointed as the director-in-charge, but under the control of Baehraj Chamaria. On the 26th September, 1956 Durgapada mukherji and one Biswanath Pandey iiled a suit being Suit No. 55 of 1956 in the court of the Sub-Judge, Howrah, against the said company, Ratanlal, Bachraj, Hiralal Sanyal etc. , for a declaration that the plaintiffs were holding a valid lease in respect of the cinema premises and had unfettered rights to run the said business, for injunction and other reliefs, On the 18th December, 1956 a suit was filed in this High Court by Hiralal Sanyal and his wife, being Suit No. 3209 of 1956, against the said company Bachraj, murarilal, Dubey, Durgapada etc. for a declaration that the sale and transfer of shares to Bachraj and ethers were void, that the prices of the shares were never paid and two receipts had been falsely obtained, in respect thereof. In january|february: 1957 the District Magistrate of Howrah ordered that as the parties were involved in litigation, no license could be issued until the cases were disposed of and that the cinema house would stand closed in the meanwhile. We find that on the 28th February 1957, a directors' meeting of the company expressed an intention to give up the tenancy to the landlord. In fact, on the 24th April, 1957 a genreal meeting was purported to have been held in which it was inter-alia resolved that bachraj was authorised to surrender the tenancy to the landlord, and make over possession upon certain conditions. In another resolution dated 6th May, 1957 it was stated that possession of the cinema house together with assets etc. , had been given to the landlord with effect from 1st May, 1957.

(3.) WHATEVER may be the real truth behind the above transactions, it is admitted by all parties that on 29th May, 1957 Durgapada with the help of hired hooligans made a forcible entry into the cinema house, ejected the employee of the company by force and took possession thereof. It appears that Bachraj Chamaria immediately informed the police and criminal proceedings were commenced, but on the 2nd November, 1957 Durgapada died leaving him surviving the respondent No, 2 his widow and three minor children, none of whom are parties to this proceeding. Prior to his death, several material incidents look place. Durgapada had somehow managed to obtain a license in his own name for the cinema house. On 9th august, 195v upon an appeal being preferred before the commissioner, Burdwan Division, the license was set aside. But upon a further appeal being made to the State Government, it was ordered that the license should continue in the name of Durgapada. After Durgapada's death, the license has been issued in the name of his widow, Kanika Mukherji. rie next fact is that in sometime August, 1957 Durgapada made an application before the Rent Controller, howrah, for standardisation and fixation of rent at the rate of Rs. 400 - per month in respect of the said cinema house and rent is being deposited month by month. In March 1959, an attempt was made by Ratanlal Chamaria and others to restrain Sm, Kanika Mukherji from procepding with the application before the Rent Controller for fixation of rent, but it failed. Thereafter, protracted efforts wore made for taking away the license from Kanika Mukherji but up till now these efforts have failed. On or about the 29th March, 1961 the present application was made by rameswardayal Dubey under sections 397 and 398 of the Indian Companies Act, the first respondent is Bachraj Chamaria, the second respondent is Sm, Kanika Mukherjec, the third respondent is murailal Sharma, the fourth respondent is Hiralal Sanyal, the fifth respondent is the company and the sixth respondent is Pratap Properties Private limited. The petition filed in this case is a long rambling document. The main allegations are as follows: - (1) That Sm. Kanika Mukherji, the respondent No. 2 has been set up by bachraj Chamaria, the respondent No. 1 to take wrongful possession of the said cinema house under a colour of title. She is a tool in the hands of the said respondent and there is a deep laid collusion and conspiracy among the respondents, other than the company, to exploit the company's business and to misappropriate the profits arising out of the same. (2) That the respondents 1, 2 and 3 are sharing the profits and Sm. Kanika Mukherji has been put in possession with the object of depriving the company of its business and profits. (3) That the several litigations both in tho High Court and at Howrah, as also before the Rent Controller, including a criminal proceeding against durgapada Mukherji were all collusive in nature and were intended to camouflage and cover up the real intention and activities of the respondents other than the company namely, to continue to be in possession of the company's business premises and run the business, either in the name of the said Durgapada or bis widow or the said respondent No. 1 and thereafter divide and share the profits of the same, with a view to deprive the shareholders of the dividends they would otherwise be entitled to, and to avoid compliance with the provisions of the Companies Act and the payment of tax liabilities of the company.