FATEH CHAND KAD Vs. HINDSONS (PATIALA) LTD

JUDGEMENT

(1.) This is a petition under Section 162, Companies Act to wind up the Hindson (Patiala) Ltd., private limited Co.. The petition is presented ban ex-director of the Co. holding 210 fully paid-up shares of the value of Rs. 21,000/-. The Co. was incorporated under the Indian Companies Act, 1913 , on 30-12-1953. The authorised capital, of the Co. is Rs. 5,00,000/- divided into five thousand shares of Rs. 100/- each. The issued capital is 2,500 shares of Rs. 100/-each and the capital subscribed, or credited as paid-up, is Rs. 1,24,000/- consisting of 1,240 fully paid-up shares of Rs. 100/- each.

(2.) The objects of the Co. were manifold; but of them the principal one was to carry on the business in tractors and to run a workshop by acquiring and taking over the assets and goodwill of a private concern, known as Hindson Automobiles, Patiala. The Petitioner and three others, namely, Shri Ram Lal Kad, Shri Anand Kumar Chopra and Shri Prem Pal Garg, were the promoters of the Co. and they were also the sole proprietors of the said firm. They floated the Co. by taking ten shares each of the total value., of Rs; 4,000/- and formed its first permanent directors. According to the agreement with the said firm, this Co.,' besides paying in cash for the purchase. of its .assets, allotted two hundred fully paid-up shares of Rs. 100 each to each of its four promoters for the transfer of goodwill of the firm, valued at Rs. 80,000/-. The same day, viz. 1-3-1954, two hundred fully paid-up shares were allotted to Shri Swam J., Singh against cash payment" of; Rs. 20.00/- and he was co-opted as a director. The five directors were thereafter appointed to act as the Co.'s working directors, on a remuneration of Rs 500/- per month each. In the minutes of 1-1-1955, fifty fully paid-up shares each were allotted to Shri Sat Pal and his, brother Mr. Raj Pal and hundred such 'shares were allotted to their mother Shrimati Pritam Devi, against their loan of Rs. 20,000/- already advanced to the Co. In the next meeting held on 9-1-1955, Shri Sat Pal, who was already acting as the Co.'s legal adviser on remuneration of Rs. 200/- per menses, was also co-opted as a director. This appointment of his was confirmed in a general meeting of the share-holders on the following day. The total number of directors thus came to six; five of them were the working directors. or an year or so, the affairs went on smoothly. In the middle of January 1955 Fateh Chand Petitioner started a separate business of his own dealing with International Tractors, in the name of Bir Trading Corporation, Patiala. Only a few days thereafter the Petitioner addressed a letter to the Co. saying, "kindly consider me from today, 27-1-1955, as a sleeping partner a d oblige". This letter was placed before the board on 13-2-1955. In view of, "the direct competitive business" started by the Petitioner, his resignation was accepted and it was further resolved that in accordance with his desire he should be treated as an ordinary share holder of the Co The change in the directorate was duly intimated to the Registrar on 24-2-1955. On 29-4-1955 the Petitioner addressed a letter to the Co. saying that he had resigned merely from the office of a working director and that he still continued to be its ordinary director. The Co. wrote back to say that the idea was simply an after-thought and against actual facts and that the Petitioner had ceased to be a director from the day he resigned. This accelerated the trouble that was brewing for sometime and it rose to its climax when, on 15-5-1955, the directors decided to hold an extraordinary general meeting for consideration of a resolution to amend the articles in certain matters. One of these was to authorise the shareholders, hi an ordinary or extraordinary general meeting for expropriate the shares of any member or members who carried on or proposed to carry on any competitive bigness. This meeting was to be held on 9-7-1955. In the nature of things, the Petitioner took it as a move to expropriate his shares and to bring about his total exclusion from the Co. and its affairs. The present petition was then presented on 4-7-1955, together with an application for an interim order to restrain the Co. from holding the proposed meeting on the said date. In reply to the summons, the Respondent Co. denied that the proposal was meant to expropriate the Petitioner and further stated that they had al- . ready decided not to hold the meeting on 9th July. The matter was consequently dropped and the application dismissed.

(3.) The Petitioner relies upon Clause (6) of Section 162, Companies Act, and alleges that in view of the present state of affairs it is just and equitable- that the Co. should be wound up. The cir constancies relied upon are: