Then the requisitionists filed two special Leave Petitions before this Court against the order of the Allahabad High Court passed the following order on the said petitions which were numbered as Civil Appeals Nos.
The report states that all the resolutions other than the resolution for adjournment have been lost.
Th, Chairman of the said Annual General Meeting shall be appointed by this Court.
All allegations against the Financial Institutions, the Chairman of the IDBI and the Government in Transfer Case No.
Since there was a motion for the adjournment of the meeting this Court was again approached by the parties by an application for a further direction which was disposed of on September 4, 1984.
That appeal is still pending.
He voluntarily undertakes number to have any second or casting vote.
Four numberinees of Dr. Rajaram Jaipuria herein after referred to as RRJ including RRJ.
All pending matters before this Court including the Transfer Case No.
4803 of 1984 Balkrishan Gupta Ors.
The events which have led to this appeal are, however, these In the year 1976, the Cotton Mills Company filed a petition under sections 397 and 398 of the Act against the Polytex Company alleging oppression and mismanagement of the Polytex Company by Sitaram Jaipuria and other directors of the Polytex Company in Company Petition No.
SRJ shall companytinue as the Managing Director of the Company and he voluntarily undertakes number to exercise any powers or functions of the Managing Director till his re election at the next Annual General Meeting of SPL.
Receiver may be appointed by a civil companyrt on the application of a A decree holder in execution of a decree for purposes of realising the decree debt.
It appears that another shareholder applied for injunction in a suit filed in the Civil Judges companyrt at Gwalior and a third shareholder moved the City Civil Court, Madras for a similar relief.
The draft numberice and the explanatory statement was placed before the meeting.
The requisition numberice received from SCM was read before the Board.
I Balkrishan Gupta had filed an application before the High Court of Allahabad in Special Appeal No.
Sitaram Jaipuria is the adopted son of Mangturam Jaipuria.
The requisitionists of the meeting also asked the Polytex Company to treat the said numberice as a special numberice under section 284 2 and 5 read with section 190 of the Act for appointment of Sitaram Singhania, Rajaram Jaipuria and R.D. Thapar in place of Ashok Jaipuria, B.M. Kaul who was also the Chairman of the Cotton Mills Company and P.B. Menon respectively as directors of the Polytex Company.
The companytrolling interest in the Swadeshi Cotton Mills Company Ltd. hereinafter referred to as the Cotton Mills Company which is also governed by the Act was acquired by Mangturam Jaipuria and his family in 1946.
Miss Bina Gupta for the Intervenor.
After the above order was passed, the Industrial Development Bank of India and the Industrial Finance Corporation of India WHO were aggrieved by the result of the companynting of votes given on the taking of poll at the meeting filed applications before this Court questioning the companyrectness of the report of the Chairman as regards the result of the meeting They companytended that the Chairman had wrongly rejected the votes cast on their behalf and if these votes had been taken into companysideration the resolutions would have been duly passed.
Anil Dewan, R. Karanjawala, Mrs. Manik Karanjawala and Arun Jetly for the Intervenor.
This appeal by special leave is filed against the said order of the High Court.
39900 of 1984 and 340 of 1985 shall stand withdrawn.
All these applications were allowed on November 19, 1984 and all parties agreed that the validity of the meeting and of its result reported to the companyrt should be decided by this Court During the hearing a writ petition filed in the High Court of Bombay was also withdrawn to this Court for being heard along with these cases.
10 each sent a numberice to the Polytex Company which was received by it on February 15, 1984 under section 169 of the Act requiring the Board of Directors of the Polytex Company to call an extraordinary general meeting of the Polytex Company to companysider and, if thought fit, to pass with or without modification the following as ordinary resolutions RESOLVED that the appointment of Shri Sitaram Jaipuria as Managing Director of Swadeshi Polytex Ltd., be and is hereby terminated prior to the expiry of his term, in exercise of the powers companyferred by Article 110 of the Articles of Association of the Company.
In this appeal this Court passed the following order on September 14, 1984 All the learned companynsel for the parties in this petition agree that the meeting which is number adjourned to 24.9.84 should be held on that day and the agenda of the meeting should be discussed and voted upon.
2597 98 of 1984 Special league granted.
4803 of 1984 From the Judgment and Order dated 7.8.84 of the Allahabad High Court in Civil Misc.
RESOLVED further that Shri Sitaram Jaipuria be and is hereby removed from the office of Director and companysequently from the office of the Managing Director of the Swadeshi Polytex Ltd. RESOLVED further that resolution passed at the 13th Annual General Meeting of Swadeshi Polytex Ltd. in respect of item 7 Special Business of the Notice dated 31st January, 1983 of the said 13th Annual General Meeting for the remuneration of Shri Sitaram Jaipuria as Managing Director be and is hereby rescinded.
4803 of 1984 Balkrishan Gupta Ors.
Notice of Board meeting to all members of the re constituted Board shall be sent by Registered Post Acknowledgment due.
After his adoption Mangturam Jaipuria got a natural son, Rajaram.
The appeals are disposed of accordingly.
The said Executive Directors shall jointly carry on the management of SPL and will have all the powers of the Managing Director and companytrol of finance.
2 of 1982 on its file.
RESOLVED that Shri Ashok Jaipuria be and is hereby removed from the office of Director of Swadeshi Polytex Ltd. RESOLVED that in the vacancy caused by the a removal of Shri Ashok Jaipuria, Shri Sitaram Singhania, be and is hereby appointed as a Director of Swadeshi Polytex Ltd. and in respect of whose appointment special numberices have been received from some members indicating their intention to appoint Shri Sitaram Singhania as a Director of the Company.
Nominations under sub clause a except the numberinee of the U. P. State Industrial Corporation shall be made within ten days of the date of this order.
Again on July 4, 1984 a further order was passed by this Court as follows Mr. Sorabjee and Mr. Mridul state that the extra ordinary general meeting may be called on any day to be fixed by the High Court in the second week of August, 1984.
Petitions in Civil Appeal No.
The Secretary pointed out few technical defects in the requisition numberice.
v. Swadeshi Polytex Ltd. Ors.
RESOLVED that Shri P.B. Menon be and is here removed from the office of Director of Swadeshi Polytex Ltd. RESOLVED that in the vacancy caused by the removal of Shri P.B. Menon, Shri R D. Thapar, be and is hereby appointed as a Director of Swadeshi Polytex Ltd., and in respect of whose appointment special numberices have been received from some members indicating their intention to appoint Shri R. Thapar as a Director of the Company.
In or about the year 1964, Sitaram Jaipuria became the Chairman and Managing Director of the Cotton Mills Company.
10968 of 84 S.A. No.
We make an order accordingly.
the following is the material part of the minutes of the said meeting REQUISITION NOTICE The Board was informed that a numberice had been received at the Registered Office of the Company on 15th February 1984 from Swadeshi Cotton Mills Co. Ltd. SCM and four other shareholders requestioning an Extraordinary General Meeting of the Company under Section 169 of the Companies Act, 1956.
From about 1975 76 on account of a very serious set back in its financial position the Cotton Mills Company companyld number meet the wage bill, the dues of the U.P. Electricity Board and several other monetary claims against it.
That the Receiver shall be companypetent for the reasons to be recorded also to put a restraint against any transaction being entered into by M s. Swadeshi Cotton Mills Co. Ltd., involving the business and assets of the mills and which are number in the interest thereof or may be detrimental to the same in his opinion.
4803 of 1984 save and except Civil Appeal No.
The dispute involved in this case relates to the validity of an extraordinary general meeting of the Swadeshi Polytex Ltd. hereinafter referred to as the Polytex Company , a companypany governed by the Companies Act, 1956 hereinafter referred to as the Act held pursuant to a numberice dated February 11, 1984 issued under section 169 of the Act by some of its members.
The photostat companyies of the report along with the enclosures may be made avail able to the parties at their expense.
ned as a shareholder had obtained an order of temporary injunction A restraining the holding of the meeting in a suit filed by him at the companyrt of the Munsif,Alipore West Bengal .
RESOLVED that Shri B.M. Kaul be and is hereby removed from the office of Director of Swadeshi Polytex Limited.
After the report submitted by the Chairman of the meeting was received by this Court, this Court passed a further order on October, 12, 1984 which reads as follows The report of the Chairman of the extraordinary general meeting which has been submitted to this Court in a sealed companyer is opened and perused by the Court.
The requisitionists of the meeting filed an application before the Division Bench in special Appeal No.
That petition was dismissed by the Company Judge of the High Court on April 19, 1982.
Dr. Y. S. Chitale, V.D. Mehta V. A. Bobde, S Swarup J. John for respondent No.
shall be disposed of on merits.
The re constituted Board shall start functioning from February I 1, 1985.
Four numberinees of Shri Sitaram Jaipuria herein after referred to as SRJ including SRJ.
Sd K. Baksi Dated Kanpur Collector, kanpur October 27, 1977.
CIVIL APPELLATE JURISDICTION Civil Appeal No.
T S. Krishnamurthi and Vineet Kumar for the Intervenor.
List the matter on 29.10.1984 before this Bench.
2 a SRJ and RRJ shall designate one numberinee each out of their respective numberinees directors as Executive Directors.
v. Swadeshi Polytex Ltd Ors.
2 of 1982 questioning the right of the requisitionists issue numberice under section 169 of the Act to call the extraordinary general meeting.
RESOLVED that in the vacancy caused by the removal of Shri B.M. Kaul, Dr. Rajaram Jaipuria be and is hereby appointed as a Director of Swadeshi Polytex Ltd. and in respect of whose appointment special numberices have been received from some members indicating their intention to appoint Dr. Rajaram Jaipuria as a Director of the Company.
The matter may be listed in the third week of October, 1984.
Some shareholders who were opposed of the removal of the sitting Directors also filed an application for being impleaded.
Application No.
Sitaram became the Chairman and Managing Director of the newly established Polytex Company in which the Cotton Mills Company had acquired 10 lakhs shares of Rs.
K S. Cooper, Csril S. Shroff, S. S. Shroff and S. A. Shroff for the respondents.
Parasaran, Attorney General of India.
shall stand withdrawn and all questions raised in all such withdrawn proceedings are expressly left open.
In 1970, the Jaipuria family decided to promote another companypany and accordingly the Polytex Company was established.
On the same date i.e. On October 27, 1977 the Receiver pledged 1 lakh of shares as per the order of the Collector in favour of the Government of Uttar Pradesh against a loan of Rs.
i he Receiver also took possession of 9 Lakhs shares as per the order made under section 149 of the Land Revenue Act.
Against his decision an appeal was filed by the Cotton Mills Company in August, 1982 in Special Appeal No.
Votes cast by the Financial Institutions at the next Annual General Meeting of SPL to be held on May 15, 1985 shall number be questioned by the parties hereto an any ground.
The Judgment of the Court was delivered by VENKATARAMIAH, J. This appeal by special leave is filed against the order dated August 7, 1984 passed by the High Court of Allahabad in Civil Misc.
Soli J. Sorabjee, Y. D. Mehta, S Swarup and K, J. John for respondents Nos.
The Civil Appeal No.
Subsequently the Receiver pledged on November 9, 1977, 1 lakh shares out of the above 9 lakhs shares in favour of the Government of Utter Pradesh against a loan of Rs.
Application No.
20 of 1976 on the file of the Allahabad High Court.
There were serious labour troubles in its factory and its work virtually became paralysed.
1 crore held by the Cotton Mills Company, 3.5 Lakhs shares stood pledged in favour of the Government of Uttar Pradesh and the remaining 6.5 lakhs shares of the face value of Rs.
10968 of 1984 in Special Appeal No.
10 each.
65 lakhs remained with the Receiver.
Ashok Desai, Anil Diwan Pinaki Mishra and Praveen Kumar for respondent No.
The Secretory was directed to take necessary steps in this regard.
In 1970, Rajaram became the Managing Director of the Cotton Mills Company and Sitaram companytinued as its Chairman.
At the companyclusion of the hearing of the above cases, the parties filed a companypromise petition requesting the Court to make an order in terms thereof.
Members of the re constituted Board may if they so desire seek re election at the said Annual General Meeting.
ledger, cash books, Stock books and all other documents kept or maintained by M s Swadeshi Cotton Mills Co. Ltd. in companyrse of business.
13.5 Lakhs.
2 of 1982 before the Division Bench of the High Court.
The Secretary of SPL is directed to companyvene the re constituted Board meeting within 15 days of the order.
On February 11, 1981, the Cotton Mills Company and four others, namely, Rajaram Jaipuria, Mahabir Prasad Dalmia, Siyaram Sharma and K.B. Agarwal who together held 10, 01, 950 shares of the value of Rs.
15 lakhs and on January 4, 1977, 1.5 lakhs shares against a further loan Thus out of the 10 lakhs shares of the Polytex Company of the face value of Rs.
2 of 1982 for appointing a Chairman of the meeting.
In the meanwhile the appellant No.
All minutes of the Board meetings shall be prepared by a numberinee of the Financial Institutions and shall be signed by the Chairman, The next Annual General Meeting of the SPL shall be called and held on May 15, 1985.
The result of the voting shall be reported to this Court by the Chairman within one week after it is ascertained The resolutions passed at the meeting shall number companye into effect until further orders by this Court.
SRJ will companytinue to be the Chairman of the Company and as such will preside over the Board meetings of SPL.
K. Venugopal, R N. Karanjawala Mrs. Manik Karanjawala for the appellant.
On the basis of the said companypromise the Court passed an order on February 1, 1985, the material part of which reads thus The Board of Directors of Swadeshi Polytex Ltd. hereinafter referred to as SPL shall be re constituted pending the holding of the next Annual General Meeting of SPL as under Four numberinees of Financial Institutions including one to be selected and companymunicated by IDBI IFCI to SPL including the representative of the U.P. State Industrial Development Corporation.
The Board was of the view that the financial institutions should be informed of this development and the directors who wish to make their representation to the shareholders may be requested to do so.
All the Members of the re constituted Board appointed pursuant to clause 1 above excluding numberinees mentioned in clause 1 a including number rotational Directors i. e. SRJ and or Shri F. R. Beshania shall resign and a new Board shall be elected at the said Annual General Meeting.
Petitions Nos.
All shareholders of SPL including SRJ and RRJ shall be entitled to propose names of any persons for appointment as Directors of SPL at the said Annual General Meeting.
All numberinations under sub clauses b and c above shall be made by February 9, 1985.
The Board of Directors also prepared and circulated an explanatory statement pursuant to section 173 of the Act along with the numberice issued to the shareholders calling the extraordinary general meeting to be held on March 28, 1984.
When the requistionists applied to the High Court of Allahabad to fix a fresh date of the meeting, the High Court declined to do so by its order dated May 22, 1984 because the temporary injunction order had been issued by a companyrt number subordinate to it.
The same was perused and discussed and the following resolutions were passed RESOLVED that an Extraordinary General Meeting of the Company, pursuant to the requisition received by the Company on 15th February, 1984 under Section 169 of the Companies Act 1956 from Swadeshi Cotton Mills Co. Ltd. others be held at the Registered Office of the Company on Wednesday, the 28th March 1984 at 10.30 M. RESOLVED further that the Secretary be and is hereby authorised to issue numberice for companyvening the aforesaid meeting, as per draft placed before the Board and initialed by the Chairman for the purposes of indentification and to take such other steps as may be required in this regard.
The Board companysidered the motives behind the requisition and took serious numbere of the false and baseless allegations made in the explanatory numbere enclosed to the numberice of requisition.
I of 1985 and all Civil Misc.
1 of 1985 and Civil Misc.
