1999 Supreme(Bom) 368

IN THE HIGH COURT OF BOMBAY
S.S. Nijjar, J.
Shree Anupar Chemical (India) Private Limited others ..... Appellants.
Versus
Dipak G. Mehta others ..... Respondents.
Company Appeal Lodg. No. 1 of 1999 along with Judge’s Summons Lodg. No. 313 of 1999 with Company Appeal Lodg. No. 2 of 1999 along with Judge’s Summons Lodg. No. 314 of 1999 with Company Appeal Lodging No. 4 of 1999, decided on 7-5-1999.
Advocates appeared :
Shyam Mehta i/b Bagla Dandekar Co., in Comp.A.Lodg. No. 2 of 1999 and 314 of 1999, for the appellant in Comp.A.Lodg. No 4 of 1999, for the respondent Nos. 21 to 28.
S. Sarkar i/b Dalal Co. in Comp.A.Lodg. No. 1 2 of 1999 and 313 314 of 1999, for the respondent Nos. 1 to 5 in Comp.A.Lodg. No 4 of 1999.
Janak Dwarkadas with Kamal Khata i/b M.P. Savla Co. in Comp.A.Lodg.No. 1 of 1999 and 314 of 1999, for the respondent Nos. 6 to 25 in Comp.A.Lodg.No 4 of 1999, for the respondent Nos. 1 to 20 for appellant in Comp.A.Lodg.No.1 of 99 with Summons Ldg. No. 313 of 99.

Headnote:Sections 397 and 398-Company petition under-Decided by Company Law Board-Appeal against -Interference into by this Court on finding of fact-Interference possible only if findings of fact are perverse and interference is really justified. The CLB has noticed that the foundation of the petition is that there was an understanding/ agreement between the original 5 shareholders, in that Group A would have 50 per cent in the shares of the company and majority on the Board of Directors. No formal written agreement had been produced before the CLB. The CLB relied on a hand written note dated 2nd August, 1997 signed by respondent No. 6 wherein there is a statement that the shareholders would contribute for the expenses of the company in various proportions. This note has been held to give some credence to the stand of the petitioners therein with regard to the understanding/agreement. The aforesaid notice has been placed on the record in the compilation of documents at page 56. A perusal of this shows that the parties had agreed to contribute to the expenses individually.

       Thereafter the note proceeds to say that we will reimburse you with our respective shares. This note is dated 1.8.1997 on the top of the right side and dated 2.8.1997 in the bottom right side comer. In Courts view the CLB has come to the correct conclusion about the implication of the note to the effect that there was an underlying partnership principle 0pffating. The CLB also relied upon the investment of Rs. 29 lakhs by Group A as against Rs. 25.30 lakhs by Group B to show that equality in contribution seems to have been agreed to by the parties. The CLB has further held that these facts taken together with the fact that in the Board meeting held on 15.1.1996. When 4 directors were appointed as Additional Directors shows that Group A was to have majority on the Board. It is held that there is no explanation from Group B as to why 20 per cent shareholders should have 4 representatives on the Board while Group A controlling 80 per cent shares should have only 3 directors. This conclusion of the CLB also cannot be said to be perverse. It was reasonable for the CLB to infer from the ratio of investment that the parties have intended to maintain a reasonable balance between the two groups. If Group A was not going to have a substantial share in the management of the company it was not necessary to make investment of Rs. 29 lakhs. This group even advanced some money to Group B make up the shortfall in their investment of Rs. 25.30 lakhs. It is also noticed by the CLB that the authorised capital of the company was increased to Rs. 1 crore on 7th December, 1995. In the Board meeting held on 8th December, 1995 it was also resolved to issue further shares and accept share application money as indicated earlier. The CLB held that these contemporaneous/successive events lead to the conclusion that there is substance in the stand put forward by the petitioners therein. Court finds no infirmity in the approach-adopted by the CLB. It is a settled proposition of law that findings of fact recorded by quasi- judicial authorities can only be interfered in appeal if the same are perverse and could not have been reached by any reasonable authority. Whilst it is true that the findings of fact are not accepted blindly the courts do not interfere with them also without real justification. The view taken by the Board is a possible view. Thus it would call for no interference.

       Sections 397/398 and 483 - Order of winding up of company Validity-Dispute between two groups of shareholders-Company Law Board giving finding that further allotment of shares made without following procedure and grounds of oppression also made out-Held, thus order of winding up legal.

       Sections 397 and 398-Winding up of company petition for Rejected by High Court as no deadlock in management found-Subsequent petition for winding up under Sections 397 and 398 of Act - Petition allowed as case of oppression found-Held, such allowance not barred by principles of res judicata.