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1993 Supreme(SC) 283

G. N. RAY, M. N. VENKATACHALIAH
M. Dayanand Reddy – Appellant
Versus
A. P. Industrial Infrastructure Corporation LTD. – Respondent


Advocates:
K.RAM KUMAR, S.K.MEHTA

Judgement Key Points

A judgment affirming that a fresh resolution is mandatory when a private limited company converts into a public company would typically emphasize the importance of compliance with statutory procedures for such fundamental changes. The court would recognize that passing a special resolution is a necessary step to authorize the conversion, ensuring proper corporate governance and legal formalities are observed. This resolution acts as an official record of the shareholders' approval and provides the authority for the directors to undertake all requisite actions, including filings with the Registrar of Companies or relevant authorities (!) .

The judgment would further clarify that the purpose of requiring a fresh resolution is to maintain transparency, protect shareholders' interests, and ensure adherence to applicable laws governing corporate transformations. It would affirm that without such a resolution, the conversion process may be considered incomplete or invalid, potentially leading to legal complications or challenges (!) .

In summary, the court would hold that passing a new, specific resolution is a mandatory legal requirement in most jurisdictions for converting a private limited company into a public company, reinforcing the principles of proper governance and statutory compliance (!) .


JUDGMENT

G. N. RAY, J.:—Leave granted.

2. Pursuant to the notice issued on the Special Leave Petition No. 7575 of 1992, the respondents have appeared and have filed counter affidavits and the appellant has also filed affidavit of rejoinder. The special leave petition out of which this appeal arises is directed against Order dated February 13, 1992 passed by the Andhra Pradesh High Court in Civil Revision No. 226% of 1991. The said Civil Revision was filed by the respondents against Order dated May 10, 1991 by which the learned Vth Additional Judge, City Civil Court of Hyderabad allowed the application filed under Ss. 3, 5, 11 and 12 read with Ss. 8 and 9 of the Indian Arbitration Act for removal of the named Arbitrator in the agreement dated December 11, 1986 and to appoint the sole arbitrator in his place.

3. The learned Judge, City Civil Court inter alia came to the finding that it was a fit case where the sole arbitrator should be appointed for adjudicating the dispute and differences between the parties arising out of the agreement in question and the learned Judge appointed a retired District Judge as the sole arbitrator for adjudicating the disputes and differences arising out









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