( 1 ) THESE two conjoint appeals from the order of the learned company judge (D. K. Kapur J.) both dated April 26, 1976, mainly turn upon the meaning and interpretation of two sections of the Companies Act, 1956 -sections 391 and 392. The facts

( 2 ) FIRST the facts. Delhi Flour Mills Company Limited (DPM) was the holding company, It had a subsidiary. The subsidiary company is Indian Hardware Industries Limited (IHI ). Now for some years past it has stopped working.

( 3 ) IHI was incorporated in 1951 with a share capital of Rs. 8 lakhs. It floated 80,000 equity shares of Rs. 10 each. Since its formation 44,000 shares were held by the holding company, namely, DFM. They were the largest single share-holder having in their hands 55 per cent of the shares of IHI. The appellant K. P. Jain and his family hold 31,000 shares. That comes to 38. 5 per cent of the entire holdings. 5000 shares are held by an outsider.

( 4 ) IHI was engaged in the manufacture of builders hardware, lt has three sections:

1. Die-casting section. 2. Tool room section. 3. Hardware section. The appellant Jain was a director of IHI from 1955 till 1970. The company closed down in 1971 or 1972. I