Content Provider | Supreme Court of India |
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e-ISSN | 30484839 |
Language | English |
Access Restriction | NDLI |
Subject Keyword | 53 - Company petition maintainability of Companies Act 398 1956: ss.397 |
Content Type | Text |
Resource Type | Law Judgement |
Jurisdiction | India |
Case Type | Appeal |
Court | Supreme Court of India |
Disposal Nature | Appeal Disposed Off |
Headnote | Companies Act, 1956: ss.397, 398, 53 - Company petition maintainability of - Company petition ll'as filed by the respondents No. 1-7 (Sanwalka group) against the appellants No.2-5 (Gupta group) - CLB held petition maintainable - Shares were allotted lo the respondents after the forfeiture of the same in hands of the appellants - Plea of appellants that shares 11•ere held by the respondents as beneficiary holders on behalf of appellants and respondents failed to comply with the notice 10 pay the unpaid value of forfeited shares - Held: Share certificates discloses that the allotment was fresh and independent - Certificates do not contain any stipulation or condition that the same are being held either on account of a third person or as beneficiary on behalf of any third person - Shares were held by the respondents in their own right without any E connection with the forfeited shares held by the appellants - Also, compliance of call notice in terms of s.53 was not proved by the appellants and its comfor,it with clauses <~f Articles of Association of the company - Therefore. company petition maintainable. ss.397, 398 - Oppression and mismanagement - Respondent- Sanwalka group filed company petition alleging oppression by the appellants-Gupta group and questioning the act of removal of lll'o members of respondent-Sanwalka group from the Board of Directors and induction of two others of appellant-Gupta group in their place - Held: Satisfaction that oppression has been committed has to be reached in the facts of each case - Facts of the present case demonstrate a series of unacceptable decisions and actions 011 the part of the appellants-Gupta group.s.205(3) - Issue of bonus shares - Held: Proviso of s.205(3) permits issue of bonus shares out of revaluation reserves of a company - Also, Articles of Association of the company to permit and contemplate such an action - In the present case, the Articles of Association do not empower the Directors to issue bonus shares out of revaluation reserves - When the Articles of the company do not confer such power in the Board, exercise thereof on the basis that the Act so provides would be impermissible - Enabling provisions under the Act would require incorporation in the Articles of a company.Company Law: c D Issue of ordinary equity shares - Held: Power of the Board of Directors to issue fresh shares is an adjunct of its extensive powers under the Companies Act, 1956 - Fundamental fair play is expected from the Board of Directors in making fair and proportionate distribution/allotment of such shares - Issue of ordinary equity shares should be proportionate lo the share holdings of the members of the company - Companies Act, 1956 - s.I72(2) rlw s.41. E Issue of ordinary equity shares in lieu of preference shares - Conversion of preference shares to equity shares - Held: Resolution of the Board relating to the conversion of preference shares into equity shares proceeded m1 basis that dividends l1111•e not been paid and shareholder agreed to accept equivalent equity shares, is unreliable - Just and proper to strike down the conversion of preference shares into equity shares and revert the preference shares to earlier status - Companies Act, 1956 - s.87(2){a). |
Judge | Honble Mr. Justice Ranjan Gogoi |
Neutral Citation | 2016 INSC 959 |
Petitioner | Tin Plate Dealers Association Pvt. Ltd. & Ors. |
Respondent | Satish Chandra Sanwalka & Ors. |
SCR | [2016] 8 S.C.R. 145 |
Judgement Date | 2016-10-07 |
Case Number | 589 |
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