BENARSI DAS SARAF Vs. DALMIA DADRI CEMENT LTD

JUDGEMENT

(1.) THIS is a petition under Section 155 of the Companies Act. 1956, for rectification of the register of members of the Dalmia Dadri Cement Limited, Dalmia Dadri, district Mohindergarh, and for certain other incidental orders and directions on the basis of the following facts and allegations:

(2.) THE petitioners claim themselves to be some of the oldest share-holders of the company which they said was in a flourishing condition. They alleged that the management of this Company, with a view to prejudice the petitioners and certain other shareholders who were in a minority, manoeuvred to eliminate them by having resort to the provisions under Section 395 of the Companies Act, 1956. They said that on 6-11-1956, Swadesh Nirman Private Limited was registered with a paid up capital of Rs. 50,000/-only which was subscribed and paid up by two share-holders Shri I. N. Patel and Shri Suraj Bhan Kontu, in the sum of Rs. 25000/- each. On 7-11-1956, i. e. , next day after its formation, Swadesh Nirman private Limited offered a scheme under Section 395 of the Companies Act, 1956, for compulsory acquisition of all the shares of the Dalmia Dadri Cement Limited. This concern, (respondent No. 1) the transferor Company, sent the scheme on 1211-1956, with a forwarding letter to the petitioners and other share-holders, for their consideration. According to this scheme, Swadesh Nirman Private Limited, respondent No. 2, the transferee Company made an offer under Section 395 of the Act, involving transfer to it of shares in the transferor Company subject to certain terms and conditions contained in the scheme, reference to which is not material for purposes of this decision. The shareholders were given a choice of certain alternative Options and were asked to intimate their approval of the scheme within four months of the date of the offer. In case this scheme was approved by holders of not less than nine-tenths in value of shares, whose transfer was involved the scheme would be deemed to have been accepted and the consideration payable to the approving shareholders in respect of their shares would be paid to them by the Swadesh. Nirman Private Limited, the transferee Company through the transferor Company against the delivery of the relevant share-scrips along with the transfer forms duly signed in respect thereof. It was also stated in the scheme that regarding', the dissenting shareholders "as defined in Section 395 of the Companies Act," the transferee Company might give notice within two months after the expiration of the aforesaid period of four months in the prescribed manner to any dissenting shareholder for acquiring his shares; and if such notice is given, the transferee Company shall, unless on an application made by it within one month from the date on which notice was given the Court thinks fit to order otherwise, be entitled and bound to acquire those shares on the terms on which under the scheme, the shares of the approving shareholders are to be transferred to the transferee Company. It was also mentioned in the scheme that where aforesaid notice has been given by the transferee Company, and no orders to the contrary have been passed by the Court on an application made by the dissenting shareholders, the transferee company shall, on the expiration of one month from the date on which such notice has been given, or it an application by the dissenting shareholders is then pending, after the disposal of that application, transmit a copy of the notice to the transferor Company with an instrument of transfer executed on behalf of the shareholders by any person appointed by the Transferee Company and on its own behalf by the transferee Company, and transmit to the Transferor Company the consideraton in the shape of a Deposit Receipt for the amount calculated at the rate specified in the scheme and the Transferor Company shall thereupon register the transferee-Company or its nominee or nominees as the holder or holders of those shares.

(3.) SHRI Benarsi Das petitioner wrote a letter on 12th/14th January 1957 to the transferor Company seeking clarification of certain points. The petitioners by their letter dated 6-3-1957, informed the Transferor Company that they did not approve of the scheme. On 14-3-1957, i. e. , after the expiration of four months, the transferee company sent notices to all the dissenting shareholders including the petitioners by post under certificate of posting on their registered addresses.