JER RUTTON KAVASMANECK Vs. GHARDA CHEMICALS LTD.

JUDGEMENT

(1.) THE instant petition is filed by the Petitioners invoking the provisions of Sections 397, 398, 402, 403, 407 and 408 of the Companies Act, 1956, alleging various acts of oppression and mismanagement in the affairs of the first Respondent -company by the Respondents and seeking, inter alia, various main and interim reliefs. The petition was moved ex parte on December 10, 2009 and this Bench passed ad interim reliefs on December 11, 2009, restraining the Respondents from transferring, alienating the shares of the company without leave of the Bench until further orders and also restrain the Respondents from selling, transferring and alienating the immovable assets of the company without leave of the Bench until further orders. This Bench gave liberty to the parties to apply before itself. The Respondents have appealed before the hon'ble High Court of Bombay against the ex parte ad interim orders dated December 11, 2009 and the hon'ble High Court directed this Bench to list the application for ad interim relief on any convenient date and modified the order to the extent that "in the meantime, the injunction that has been granted, restraining the company from selling, transferring or alienating its immovable assets without the leave of the Company Law Board, shall not affect disposition in the usual course of business and directed this Bench to hear afresh on the ad interim relief 's without reference to the ad interim relief dated December 11, 2009.

(2.) AS per the directions of the hon'ble High Court the matter is taken up for hearing afresh on passing of ad interim relief 's. Shri Samdhani, learned senior counsel appearing for the Petitioners submitted that Respondent No. 1 is a closely held family company belonging to the Gharda/Kavasmaneck family incorporated as a private limited company under the Companies Act. However, on August 17, 1988, Respondent No. 1 company became a deemed public company pursuant to Section 43A of the Companies Act, 1956 and the essence of private company is not lost. In support of his contention he relied upon a decision reported in [2006] 133 Comp Cas 742 (CLB); [2006] 71 SCL 41 in the matter of {Hillcrest Realty Sdn. Bhd. v. Hotel Queen Road P. Ltd.), it is held (page 774) :

(3.) LEARNED senior counsel further submitted that since Respondent No. 1 company is a quasi partnership and a closely held private limited and family concern the partners/shareholders' agreement to maintain parity inter se between them has been recognised and enshrined in the articles of association of Respondent No. 1 company. To that end and intent Article 57 of the articles of association has been incorporated and provides that no member can transfer his shares without first offering them to the other members of the first Respondent. The said article continues to remain in the articles of Respondent No. 1 company even today. In fact the second Respondent by his letter dated May 13, 2009, has acknowledged that even today the transfer of shares would be governed within the framework of articles of the company. In this context learned Counsel relief upon the citation reported in AIR 1928 PC 291 in the matter of (Ontario Jockey Club Ltd. v. Samuel McBride), it is held (page 293):