Accordingly the Meeting was held.
The Appellant applied for interlocutory injunction which was refused by a single Judge.
The SEBI guidelines, which have been relied upon, were clarified on 13th August, 1992 wherein it has been stated that these guidelines do number apply to issue of securities by existing private closely held and other unlisted companypanies.
100/ each to Rs.
It only directed that the resolution passed at the Meeting would abide by the result of the Appeal.
The Appellant attended and objected to the Resolution being passed.
The Reserve Bank of India had issued certain directions to them.
It seems that the Respondent Company did number immediately companyply with this direction but instead took a long period to show the Depositors money as liability.
31,08,36,000/ out of Rs.
standing to the credit of Revaluation Reserve as per the Audited Accounts for the financial year ending on 31st March, 1994, be capitalized and accordingly, the Directors of the Company be and are hereby authorized and directed to appropriate the said sum of Rs.
This Court held that the directions given by the Reserve Bank of India were just, fair and reasonable number only to the depositors but, in the long run, to the very existence of the Respondent Company and its companytinued business itself.
This Court refused to interfere in the Special Leave Petition filed by the Appellant but directed the High Court to dispose of the Appeal expeditiously.
The Respondent Company issued a numberice calling for an A.G.M. to companysider increasing the share capital of the companypany from Rs.
That challenge ultimately culminated in this Court.
The Appellant challenges the power of the Respondent Company to issue Bonus Shares out of Revaluation Reserve on three grounds viz.
But the Resolution was passed by a majority.
217.34 crores.
As this Court held that the directions issued by the Reserve Bank of India were valid the Respondents became liable to transfer Rs.
100/ each.
217.34 crores to the Depositors A c by debiting the Profit Loss A c with Rs.
By the Judgment reported in 1992 2 SCC 343 Peerless General Finance and Investment Co. Limited vs. Reserve Bank of India this Court held that the Reserve Bank of India had authority and power to issue direction in order to provide stable, identifiable and monitor able method of operation.
The Appeal was then disposed of by the impugned Judgment wherein it has been held that the Respondents were entitled to issue Bonus Shares out of Revaluation Reserve.
35 crores divided into 35,00,000 Equity Shares of Rs.
The Appellant then filed a fresh Appeal, wherein he applied for an injunction restraining the Respondents from issuing the Bonus Shares.
The Reserve Bank of India had, by a letter dated 11th March, 1992, called upon the Respondents to prepare its Balance Sheet in companyformity with its earlier directions.
The Appeal was subsequently withdrawn by the Appellant with a liberty to file a fresh Appeal.
The Respondents had challenged the authority and power of the Reserve Bank of India to issue such directions.
3 crores divided into 3,00,000 Equity Shares of Rs.
31,08,36,000/ to and amongst the members of the Company whose names shall appear on its Register of Members on 7th November, 1994 being the Record Date for this purpose hereinafter called the said date in proportion to the Equity Shares held by them respectively in the Company as on the said date and to apply the said sum of Rs.
73,82,87,261.60p.
The Division Bench of the Calcutta High Court permitted the Respondents to process all formalities but number to effect the delivery of the Bonus share scrips without obtaining prior leave of the Court.
The Notice also provided as follows RESOLVED That pursuant to the provisions of Article 182 1 of the Articles of Association of the Company, a sum of Rs.
The Appellate Court also did number grant an injunction.
The Appellants then filed a Letters Patent Appeal.
This Court held that such directions would ensure security to the depositors at all times and also make the account of the companypany accurate, accountable and easy to monitor.
One of the directions was that the depositors monies must be shown, in their balance sheets, as a liability instead of income as had been done by the Respondent Company.
Briefly stated the facts are as follows The Respondents are an Investment Company.
N. VARIAVA, J. This Appeal is against the Judgment dated 23rd August, 1995 passed by the Calcutta High Court.
