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2008 Supreme(Bom) 85
IN THE HIGH COURT OF BOMBAY
Khanwilkar A.M., J.
Vijay Arora & anr. – Petitioners
Versus
Eastern International Hotels Limited. – Respondent
Company Petition No. 780 of 2007
Decided on : 23-1-2008
Zal Andhyarujina a/w. Deepa Mani i/b. S.K. Srivastava & Co., for petitioners.
Janak Dwarkadas, Sr.Cou. a/w Shyam Mehta i/b. Wadia Ghandy & Co., for respondent.
Headnote:CRIMINAL PROCEDURE CODE, 1973 - Section 482 - Quashing of FIR.
Since allegations made in complaint are in nature of civil dispute hence FIR liable to be quashed.
Companies Act, 1956 - Section 433(b), (f) and (g)-Prayer for winding-up of company and appointment of official liquidator made-On ground that default in making statutory meeting and delivering statutory report made that the respondent company has been incorporated as private company whereas the requirement is to be observed by companies other than private companies in view of the express provisions of 165 and held that the petitioner has not made out the case for winding-up of company under Section 433(b).
Companies Act, 1956 - Section 433(f)-Prayer filed for winding-up of a company that there was no ground for passing of order of winding-up against respondent-company.-The plea taken in the petition is one of acquisition of cars and spending of substantial currency on foreign tours and other expenses unrelated to the cause of the respondent company by the present directors of the respondent company. Even this allegation has been countered by the respondent on affidavit. In the first place, the allegation is too vague and general. In any case, having regard to the nature of business of respondent company, if decision is taken to acquire Mercedes cars and if the directors were provided with the said vehicles, that cannot be the basis to direct winding-up of the respondent company. The petitioners may be free to pursue such other remedy for such act of commission and omission of the directors of the respondent company, but surely it is not a case for ordering winding-up of the respondent company on the ground provided under Section 433(f) of the Act. Having regard to the allegations in the petition in particular from paragraphs 15 to 24 and the reply affidavit, no ground has been made out by the petitioners for passing an order of winding-up against the respondent company under Section 433(f) of the Act.
Companies Act, 1956 - Section 433(g)-Prayer for winding-up of a company-Due to default in filing its balance-sheet, profit and loss account and annual returns for any five consecutive financial years that the respondent deserves to be provided with one opportunity to rectify the said defect.-That takes Court to the last ground pressed into service in terms of Section 433(g) of the Act. In the petition it is very clearly asserted that the company has made default in filing with the Registrar its balance-sheet and profit and loss account or annual returns for any five consecutive financial years. Nevertheless, the respondent will have to be provided with one opportunity to rectify the defect relating to non-filing of balance sheet and profit and loss account or annual return with the Registrar. It is not necessary to go into the details about the reason for the inability of the respondent company to comply with the said requirement which has been offered by respondent on affidavit. The fact remains that the respondent company has failed to comply with the requirement and that can be a ground for proceeding against the respondent company. However, as aforesaid, the respondent deserves to be provided with one opportunity instead of straightway admitting the company petition, which will have serious consequences not only on the respondent company but other stake holders.
2. Having perused the pleadings and documents on record and considering the rival submissions, I shall straight way proceed to deal with the preliminary objection raised on behalf of the respondent company.
3. According to the respondent company, the present petition is filed with mala fide intention or motive. To make good its contention, the respondent is relying on certain circumstances spelt out in paragraph 4.1 of the reply Affidavit. In paragraph 4.1 (i) of the reply Affidavit it is stated that the petitioners have ostensibly filed the said winding-up company petition with a mala fide intention and with an oblique motive so as to achieve the collateral purpose of procuring maximum returns on shares held by the petitioners and 39' their family members in the respondent company. It is stated that the petitioners are part of Arora Family whose shareholding in the respondent company is indicated in paragraph 4.1 (ii) of the reply Affidavit. It appears that the petitioner No. 1 holds 600 shares (0.034%), petitioner No.2 (mother of petitioner No.1) holds 600 shares (0.034%), Rikhiram Arora (deceased father of the petitioner No.1) held 50 shares (0.003%.,), R.T. Arora (HUF-of which petitiorrer No.1 is the Karta) holds 50 shares (0.003%) and Amrish Arora (brother of the petitioner No.1) holds 61,150 shares (3.470%). Here, it is relevant to note that the authorised share capital of the respondent company is Rs. 1.50 crores divided into 12.50 lakh equity shares of Rs. 10/- each. The remaining shares to the extent of 94% are held by two groups namely B.N. Khanna Group and M.P. Khanna Group. According to the respondent, pursuant to the delisting of the respondent company from the Bombay Stock Exchange in July 2004, barring petitioner No. 1 in his personal capacity, the Arora family comprising of the petitioner No. 1 in his capacity as Karta of the R.T. Arora (HUF), the petitioner No.2 herein, Mr. Amrish Arora (the brother of the petitioner No.1) and Mr. Rikhiram Arora (the deceased father of petitioner No.1) have instituted arbitration proceedings against the respondent company and one of the promoter groups, namely, B.N. Khanna Group of the respondent company, requiring them to purchase the: Arora family share holding excluding 600 shares of the petitioner No. 1 at a fair market value to be determined by the arbitral Tribunal. In the said proceedings the Arora family has contended that the most appropriate method for valuation of the Arora family minority , share holding in the respondent company would be the "Net Asset Value method",
4. It is then contended by the respondent that the Net Asset Value method is primarily applicable only where a company is on the anvil of winding-up and not where a company is solvent and a going concern as l is the case with the respondent company. It is asserted by the respondent that in order 394 to facilitate and enable the Arora family to obtain higher valuation based on Net Asset Value method, the Arora family, primarily Mr. Amrish Arora - the brother of the petitioner No. 1 and holder of 98% of the Arora family shareholding, has put up the petitioners to file the present winding-up petition so as to justify valuation of the shares based on the Net Asset Value method which can be primarily applied only where a company is on the anvil of being wound-up. In substance, it is the case of the res
