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1998 Supreme(Cal) 438
HIGH COURT OF CALCUTTA
A.N. RAY, D.P. KUNDU, JJ.
Diabari Tea Co Ltd - Appellant
Versus
Dooars Assam Union Tea Co Ltd - Respondent
Decided on : Sep 21, 1998
Headnote:
COMPANY - Winding up - Just and equitable - Unfair prejudice - Minute book - Falsification - Board of directors - Removal - Mismanagement - Oppression - Share transfer - Valuation - Costs.
Fact of the Case:
This appeal arose from a judgment and order dated 23rd June, 1993, which was found to be non-existent. The Roys and the Roy owned companies owned about 25% of the share capital of the Dooars Assam Company, hereafter simply referred to as the company. The corporate shareholding is much more important amongst the Roys, it being about 24%. Madhujit Basu is the son of Sachindra Nath Basu and Gouri Basu. They are both in the category of respondents. However, there is absolutely no difference of interest or attitude as amongst father, mother and son. The third group of shareholders apart from the Roys and Gouri basu' s group are the group of Samarendra Nath Basu. Samarendra Nath basu and Sachindra Nath Basu are uterine brothers. They were Managing directors of the Company until 1988 when Sachindra Nath Basu had to give up that position because of his advanced age. After him his wife Gouri Basu joined as Managing Director with samarendra Nath Basu.
Finding of the Court:
The court found that the minutes of the Board dated 29.4.89 and 29.7.89 were falsified and cancelled. The directorial Board will hereafter be composed of the seven persons who were directors immediately prior to 29.7.89. One person excluded is Raut, in Sachindra's group, and that is because he has died. In place Raut, Madhujit Basu shall function as a Director, Gouri basu shall be Managing Director. Samarendra Nath Basu shall not function as a Director or a Managing Director and he shall be restrained from attending any Board meeting for a period of two years from date hereof or the holding of an Annual General Meeting of the company whichever is earlier. The new Board shall consider the appropriateness of all share transfers which haver purportedly or allegedly taken place on or after 29.7.89 if the Board is of opinion in case of any of such transfers that the registration has been made on inadequate or improper materials the Board shall order rectification of the share register and such order shall be carried out by the company, its officers, servants and agents without any demur or protest.
Issues: 1. Whether the impugned order was passed without any reason and was a result of falsification of court records? 2. Whether the Board minutes of 29. 4. 89 and 29.7.89 should be struck out and cancelled? 3. Whether Samarendra Nath Basu should be removed as a Director and Managing Director? 4. Whether the Roys should be directed to disinvest in favour of the Basus? 5. Whether J. Thomas and Co. should continue as the Tea broking House of the company?
Ratio Decidendi: 1. The court held that the impugned order was passed without any reason and was a result of falsification of court records. The court found that the minutes of the Board dated 29.4.89 and 29.7.89 were falsified and cancelled. 2. The court held that the Board minutes of 29. 4. 89 and 29.7.89 should be struck out and cancelled. 3. The court held that Samarendra Nath Basu should be removed as a Director and Managing Director. 4. The court held that the Roys should not be directed to disinvest in favour of the Basus. 5. The court held that J. Thomas and Co. should continue as the Tea broking House of the company.
Final Decision: The appeal was allowed. The impugned order was set aside. The minutes of the Board dated 29.4.89 and 29.7.89 were struck out and cancelled. Samarendra Nath Basu was removed as a Director and Managing Director. The Roys were not directed to disinvest in favour of the Basus. J. Thomas and Co. was allowed to continue as the Tea broking House of the company.
1. THIS is an appeal from a judgment and order dated 23rd June, 1993.
2. THE entire text of that is set out in an order passed at the interlocutory stage of this appeal on an application made by Mr. Promothownath Chatterjee's clients for addition of his clients as parties. Some facts relating to the company and its shareholders and directors are also set out there.
It is mentioned there, and we also mention it here, because it is a fact of very great importance, that although it is recorded in the books of this Court on 23.6.93 that there is a judgment apart from the order that is available, yet in fact no such judgment is available.
3. NO such judgment to repeat is available.
4. IT is recorded in the order "court delivers written judgment". We know of the Court delivering judgment and also of handing over of the written judgment to the Court Officer but we are not aware of delivering written judgment being recorded in an order.
It is also stated in the order " (for details see the original judgment)". The meaning of the phrase original judgment is, mildly speaking, a little unclear. Since there is no judgment original or otherwise arid there are no details available from anywhere, the order appealed from is a reasonless order although- it purports wrongly to be a reasoned one, by giving reference to a non existent judgment.
5. MR. Mukherji, appearing for Gouri Basu, one of the respondents supporting the appeal, submitted that this is an appalling state of affairs. After hearing whatever could be said in this regard on behalf of the other parties, we have no hesitation in our mind that is an absolutely accurate statement in the facts and circumstances of this case.
6. THE matter is so bad that hardly anybody can raise any point against the setting aside of the order under appeal. This course appears to be irresistible even apart from the facts of this case, on the sole and simple basis of falsification of the court records. The then Acting Chief Justice retired on 23.6.93 after the erroneous insertions were made in the court records from which copy orders hare been issued to the parties.
This being an application complaining against oppression in regard to the company management and shareholding, simply setting aside the order, however bad or insupportable might it be, would not further the cause of justice. The court was faced with the problem of what should be the solution on the original Section 397/398 application. The petitioners who are the appellants submitted that they have been litigating with this matter in this court for nearly 10 years. If at the end of this long period they are merely faced with a remand order, then their time, energy and money will have been spent for nothing. It would be a premium, according to them, put upon the persons who are in wrongful control and management of the company.
7. LET us now come to the facts and materials. Amongst the petitioners there are the Roys, the Roy owned companies and Madhujit Basu. The roys and the Roy owned Companies owned about 25% of the share capital of the Dooars Assam Company, hereafter simply referred to as the company. The corporate shareholding is much the more important amongst the Roys, it being about 24%
8. MADHUJIT Basu is the son of Sachindra Nath Basu and Gouri Basu. They are both in the category of respondents. However, there is absolutely no difference of interest or attitude as amongst father, mother and son. In fact, Mr. Sen appearing for Samairendra Nath Basu made comments about the obliquity of motive which, according to him, was made manifest by similarly interested parties being distributed both amongst the petitioners and the respondents. 12-45/1-00
The third group of shareholders apart from the Roys and Gouri basu' s group are the group of Samarendra Nath Basu. Samarendra Nath basu and Sachindra Nath Basu are uterine brothers. They were Managing directors of the Company until 1988 when Sachindra Nath Basu had to give up that position
