BANK OF RAJASTHAN Vs. MANISH AGARWAL

JUDGEMENT

(1.) THESE two revisions will be disposed of by this single order as they have been filed by both the parties against the impugned order dated 30. 4. 1999 passed by learned Additional District Judge No. 5, Jaipur City, Jaipur in Civil Suit No. 18/99.

(2.) BRIEF facts are that the Bank of Rajasthan is a banking company incorporated and registered under the provisions of the Companies Act, 1956. A resolution was passed on 22. 9. 1995 in the Annual General Meeting of the company for taking requisite steps, measures and actions for bringing in additional capital. It was decided in the said general meeting that the Board of Directors of the company would be competent to take all proceedings and actions for enabling the company to come out with the bonus/rights issue at any time for the purpose of generating additional capital. Consequently, AGM made a reference on 28. 9. 1998 to the Reserve Bank of India seeking its approval for induction of five new Directors in the Board of Directors of the company. The Reserve Bank of India granted approval for induction of five Directors from Tayal Group with certain conditions. Accordingly five Directors from the Tayal Group were included into the Board of Directors. In the meeting held on 8. 12. 1998 it was decided that the right issue would provide for issuance of five new ordinary shares of the face value of Rs. 10/-each at a premium of Rs. 5/-per share to the existing shareholders for every two ordinary shares held by them and further that alongwith each rights share a detachable warrant would be issued entitling the holder thereof to apply for and be allotted one ordinary share of Rs. 10/-within 12 to 18 months at a discount of 25% of the average market price of the share prevailing during the last six months. As required by law, the matter was thereafter referred to the Security and Exchange Board of India who passed an order on 25. 2. 1999 granting its approval to the proposed rights issue with certain observations/modifications which were to be complied with before the commencement of issue. In the right of the conditions imposed by SEBI the company took some decision and the matter was again duly considered by Extraordinary General Meeting of the company held on 5. 1. 1999 wherein it was duly resolved to increase the capital of the company by providing in its memorandum of association that the capital of the company shall be Rs. 15. 0 crores only divided into 15 crores shares of Rs. 10/-each. Thereafter the company took all actions and measures for being able to come out with the said rights issue as per the deadline laid down by the Reserve Bank of India.

(3.) SO far as the Bank of Rajasthan is concerned, the temporary Injunction was issued by trial court against Bank of Rajasthan and the order granting Injunction has been affirmed by this Court In Civil Misc. Appeal No. 446199, decided on 30. 3. 1999. After being unsuccessful, petitioner Bank of Rajasthan moved application under Order 7 Rule 11 CPC before the court below and on its rejection filed this revision.