SAUDAGAR SINGH Vs. GURDIP SINGH GILL

JUDGEMENT

(1.) DISSATISFIED with the judgment of the learned single judge, who rejected their objections to the proxy of Ram Pal Singh, Saudagar Singh and others have filed this appeal.

(2.) SEWAK Bus and Transport Co. (P.) Ltd. is a private company being engaged in the business of transport having its registered office at Moga, district Faridkot. Broadly speaking, there are two groups of shareholders in this company, one is led by Saudagar Singh, appellant, and the other by Gurdip Singh Gill, respondent No. 1. The authorised capital of the company is Rs. 3 lakhs divided into 3,000 equity shares of Rs. 100 each. The subscribed and paid up capital of the company is Rs. 2,94,100. The total number of subscribed shares of the company are 2,941. Kartar Singh, Naranjan Singh and Jaswant Singh who had 29, 31 and 11 shares, respectively, had died. One Karam Din who held 22 shares had migrated to Pakistan. Leaving these aside, the effective voting strength comes to 2,848 and the number of members owning these shares is 46. Disputes arose regarding the election of the directors of the company. A meeting was held for the election of the board of directors on September 20, 1976. Both parties claimed that they had won.

(3.) GURDIP Singh and others filed a petition under Sections 397, 398 and 399 read with Section 402 of the Companies Act (hereinafter referred to as "the Act"), in which they alleged that the members of their group had been elected directors in the meeting held on 20th September, 1976. Saudagar Singh and others--respondents mentioned in the petition--had taken forcible possession of the buses, the premises and the records of the company in the month of March, 1977. It was also alleged that Saudagar Singh and others were in a minority and they were not entitled to run the affairs of the company; that, on the other hand, Gurdip Singh and others were in a majority of shareholders, but they were being kept out and were being oppressed by the group of Saudagar Singh and others. It was prayed that the respondents, Saudagar Singh and others, may be removed from the illegal possession of the company and they be directed to hand over the records of the company to the petitioners. Another application (C. A. No. 37 of 1977) under Section 403 of the Act, read with Order 40, Rule 1 of the CPC, for appointment of a receiver, was filed by the petitioners in the main petition and it was prayed that a receiver may be appointed to manage the affairs of the company during the pendency of the main petition. The respondents, Saudagar Singh and others, opposed this prayer. However, Sharma J. appointed the official liquidator as a receiver, vide order dated 14th April, 1977. The respondents, Saudagar Singh and others, went up in appeal against the order of appointment of the receiver through Letters Patent Appeal No. 74 of 1977. During the pendency of the appeal, the parties entered into a compromise. On the basis of that compromise, an order was passed on 18th April, 1977, that the proceedings of the meeting held on September 20, 1976, were superseded and nobody was deemed to be elected a director. It was ordered that an official chairman be appointed who should hold a special general meeting of the company for the purpose of electing seven directors and the managing director. It was also ordered that the official receiver should take charge of the company and run the same till the election of the new directors and after such election, the official receiver was directed to hand over charge of the office and the business of the company to the newly elected directors. Both the parties were directed to give lists and addresses of the members of the company to the official chairman.