MOHAN LAL MITTAL Vs. UNIVERSAL WIRES LTD

JUDGEMENT

(1.) This is an application under Sections 397, 398, etc., of the Companies Act, 1956, inter alia, for the appointment of a special officer and/or administrator, injunction restraining respondents Nos. 2-5 to act as directors and for a declaration that the meetings dated May 14, 1976, and December 11, 1976, are illegal, null and void and of no effect and for other reliefs.

(2.) This application is really one in the series of applications which are the outcome of family disputes of the Mittals who are controlling a large number of companies and the respondent-company being the Universal Wires Ltd. is one of them. Petitioner No. 1, Mohan Lal Mittal, is the eldest brother. He along, with his son, wife and other stooges and henchmen, who are holding a block of shares in those companies, has constituted one group, and the other is constituted by the other brothers led by Inderson Mittal, Ratan Kumar Mittal, their relatives, henchmen and stooges. In the respondent-company, the shareholdings of the petitioners and their group are set out in para 6 of the petition in which it is alleged that a block of 5,000 equity shares in the capital of the respondent-company is held by Southern Steel Ltd., another company of the Mittal group which is supporting the present petition and thereby the qualification shareholding under Section 399 of the Companies Act, 1956, to make this application is acquired. In other words, if the said consent of the Southern Steel Ltd. to this application is not valid or legal the present application must be held to be not maintainable as the petitioner cannot acquire the necessary qualification share under Section 399 of the Companies Act, 1956. This position is admitted by both the parties and one of the main questions argued as a preliminary issue in this application is that it is not maintainable; as the alleged secretary of Southern Steel Ltd. who has signed the letter of consent which is annexed to the petition was not the secretary of the company and also he had not the authority to give such consent of the company, i.e., the said Southern Steel Ltd., by a resolution of the Board but alleged to be directed by petitioner No. 1, Mohan Lal Mittal, who signed such consent. Elaborate arguments were advanced as to the power of the secretary and a director of the company and also the procedure for taking the preliminary point of non-maintainability of the application under Section 399 of the Companies Act, 1956.

(3.) The facts relevant for the purpose of this application are that the respondent-company, Universal Wires Ltd., was incorporated on or about November 10, 1971, having its registered office at No. 2, Brabourne Road, Calcutta. The authorised capital being Rs. 2 crores divided into 7,50,000 equity shares of Rs. 10 each and 25,000 preference shares of Rs. 100 each. The issued and subscribed capital of the company is Rs. 24,00,000, paid up and/or credited as paid up share capital is Rs. 23,58,250 out of which Rs. 18,58,250 as equity capital of 1,85,250, equity shares of Rs. 10 fully paid up and of Rs. 5,00,000 preference capital of 5,000 equity shares of Rs. 100 each fully paid up. The company's object is to manufacture and deal in wires and wire ropes of every kind and description including steel wires, metal wires, etc.