DHRUBA CHARAN PATTNAIK Vs. ANTARYAMI PATTNAIK

JUDGEMENT

(1.) THIS appeal has been filed at the instance of the plaintiff against a confirming judgment. The respondents have also filed cross appeal.

(2.) THOUGH this matter was listed for admission, the learned counsel appearing for the parties, prayed for disposal of the appeal at the stage of admission and accordingly, the learned counsel appearing for the parties were heard on merit. The plaintiff -appellant filed the suit in the Court of the learned Civil Judge (Junior Division), Second Court, Cuttack for permanent injunction restraining the defendant -respondent No.1 from transferring or selling any share of the company to any person who is not a member of the company so long as any member is willing to purchase the Same and also restraining the defendant -respondent No.1 from disturbing the status quo of the suit property so far as its nature and character is concerned and inducting any new share holder/Director in the company or interfering with the day to day affairs of the company.

(3.) DEFENDANTS 1 and 7 who contested the suit filed a joint written statement challenging maintainability of the suit on several grounds. It was contended by them in the written statement that Mrs. Reeta Mohanty, who is wife of the plaintiff had filed Title Suit No.116 of 1997 in the Court of the learned Civil Judge (Junior Division), Kujanga seeking relief of permanent injunction against the defendant -respondent No.1 on similar grounds. It was the stand of the defendants 1 and 7 that defendant No.1 being the Managing Director of the Company had personally negotiated with the defendants 5 to 7 to increase the shares of the Company and induction of the said defendants 5 to 7 as the Directors and share -holders of the Company and same was duly recognized by the Registrar of Companies. It is also the case of the defendants 1 and 7 that defendant No.1 is continuing as the Managing Director of the Company and the Director Mrs. Reeta Mohanty resigned from the Company from 9.2.1994 and transferred her share to the newly inducted Director, Nidhisudan Behera for a total consideration of Rs.7,50,000/ -. The resignation of Reeta Mohanty was placed before the Boards meeting on 4.3.1994 and the Board accepted her resignation. The Registrar of Companies has also been intimated about the said fact and the same has been accepted. Due to measurable financial condition of the company, new share -holders/Directors were also inducted to shoulder the liability of the financial institutions. In the written statement of defendants 1 and 7 a specific reference has been made to the minutes of the meeting held on 22.3.1996, 22.5.1996, 22.8.1996, 28.5.1997, 2.7.1997, 12.7.1997 and 18.7.1997 wherein transfer of shares and induction of Directors have been allowed and accepted by the Board. On the above plea, the defendants 1 and 7 prayed for dismissal of the suit. The other defendants filed separate written statements which are not relevant for the purpose of deciding the issue in question. The trial Court on pleadings of the parties framed seven issues and found that the plaintiff is continuing as share -holder of the Company. The Court further held that defendants 5 to 7 have purchased some shares from the Company and in absence of them, the suit was bad for non -joinder of necessary parties. The Court further held that there was no cause of action for filing the suit against the defendant and on the above findings, the suit was dismissed. Challenging the judgment and order of the learned Civil Jude (Junior Division), the plaintiff filed an appeal before the learned Second Additional District Judge, Cuttack vide Title Appeal No.13 of 2003. The contesting defendants 1 and 7 also filed cross -objection under Order 41, Rule 22 C.P.C. challenging the finding in respect of Issue No.4 holding that the plaintiff continued to be a share -holder of the Company. The learned Additional District Judge after hearing the parties dismissed the appeal as well as the cross -objection. Therefore, both plaintiff and contesting defendants are before this Court in appeal and cross -appeal.