HANUMAN PRASAD BAGRI Vs. BAGREES CEREALS (P.) LTD.

JUDGEMENT

(1.) THE cuisine is English, the flavour unmistakably Indian. The blend in the appellants' plaint is on a base of the classical exceptions to the rule in Foss v. Harbottle, [1843] 2 Hase 461 (Ch.), it has a generous dollop of Loch v. John Blackwood Ltd., [1924] All ER 200 (PC) as Indianised by Hind Overseas (P.) Ltd. v. : [1976]2SCR226 and it carries a suggestion that it be tasted with a side order of Clemens v. Clemens Bros. Ltd. The underlying theme of the plaint is that the first defendant is merely the corporate avatar and repository of ancestral Hindu family business in which partnership principles should apply such that the exercise of majority rights therein would be subject to equitable considerations.

(2.) THE suit is on rebound, as any student of company law would know. The appellants' petition of the late 1980s under Sections 397 and 398 of the Companies Act was stultified on a reading of the petition that it carried only a directorial complaint that did not meet the exalted test of just and equitable winding up that an oppressed shareholder has to establish before progressing to seek any relief. In the judgment in Hanuman Prasad Bagri v. : [2001]2SCR811 , the Supreme Court upheld the Division Bench view of this Court but left room for a suit to be based on the substance of the original complaint.

(3.) THE background is essential for the interlocutory application questioning an issue of right shares in the company some three years after the suit was lodged, to be seen in perspective. The plaintiffs are in appeal from the limited protection they were granted. They urge that the rights issue of shares was engineered only to consolidate the wrongdoers' inequitable stranglehold over the company with knowledge that the plaintiffs would not be enthused in spending good money after bad only to cling on to their 18 per cent shareholding in the company.