Judgment

SABYASACH1 MUKHARJI, C.J.I. :- Leave granted.

2. This is an appeal from the judgment and order of the Division Bench of the High Court of Delhi, dated 31st August, 1989 (reported in (1989) 3 Delhi Lawyer 293). The appellant No. 1 M/ s World Wide Agencies (P) Ltd. is a private limited company incorporated under the provisions of the Indian Companies Act, 1956 (hereinafter referred to as the Act) to which Table A of Schedule 1 to the Act applies, as stipulated under the Articles of Association of the company. As per the memorandum of association the appellant company was carrying on the business of travel agents at G-40, Connaught Circus, New Delhi. The authorised share capital of the company was to the tune of Rs. 5 lakhs divided into 5000 equity shares of Rs. 100 each. The paid up capital as per the last annual return filed by the company with the Registrar of Companies, was Rs. 2,01,000/-. The company had at all relevant times 7 shareholders and the total number of shares subscribed and paid up was 2010 shares.

3. The appellant No. 2 Mrs. Amrit Kaur Singh, at all relevant times, was a shareholder holding 545 fully paid up shares in the share capital of the company, and was also the whole-time working Director of the Company, holding the office from 1974 onwards. Late Mr. G. K. Desor was a British national. He held 600 shares in the said company, acquired by him from the Ex-Managing Director Mr. Amrik Singh Saluja and his family. The respondents Nos.2 & 3 to this appeal are children of late Mr. S. K. Desor who died on 5th March, 1985. As per the certified copy of the annual return made up to 15th February, 1984 the shareholders of appellant No. 1 (company) were as follows:-

Mr. S.K. Desor 600 shares

Mrs. Amrit Kaur Singh 545 shares

Mr. Yash Pal Malhotra 250 shares

Mrs. Amrit Gupta 200 shares

Mrs. Savitri Devi Kohli 5 shares

Mr. A.S. Saluja 5 shares

Mr. Balwant Singh 405 shares

2010 shares

4. A petition under Ss. 397 & 398 of the Act and in the alternative for winding up of the company was filed by the respondents on 25th March, 1985, wherein it was alleged that on 12th March, 1985 respondent No. 1, being the widow of late Mr. S. K. Desor, applied as a legal heir of late S. K. Desor to the Board of Director of the appellant-company for transmission of 350 shares held by her late husband. It is stated that the shares of Yash Pal Malhotra had been acquired by late Mr. S. K. Desor; and that respondent No. 1 led an affidavit of her daughter Ms. Kim Paul, relinquishing her claim to the shares of her late father. The Board of Directors resolved that they had no objection to transmission of the shares held by Mr. S. K. Desor but the actual transmission would take place on respondent No. 1s obtaining Reserve Bank of Indias permission and the succession certificate. The respondent No. 1s application for allotment of 5 shares as per her letter of the same date was allowed by the Board of Directors, and it was resolved that in view of allotment of these shares, her interest in the shares of her late husband, she be appointed as a Director of the Company, subject to Reserve Bank of Indias permission.

5. It is stated in the judgment under appeal that at the said meeting of the Board of Directors, they recorded their deed appreciation for the services rendered by late Mr. S. K. Desor as Managing Director-cum-Chairman of the company, and mourned his passing away. The quorum of the said meeting was two - Mrs. Amrit Gupta and Mrs. Savitri Devi Kohli. It is recorded in the judgment under appeal that on 23rd March, 1985 the Board of Directors held another meeting. The minutes of the meeting of 12th March, 1985 were confirmed by the two above-mentioned Directors. The third Director, Mrs. Amrit K. Singh, however, objected as she stated that she had not been informed of the last meeting. Various averments had been made in the petition with regard to oppression and removal of certain valuables by Mrs. Amrit K. Singh and illegal operation of the b