whether the appellants and the respondents are rivals in business ?
4, the Company Law Board numbericed that on 29.8.1983, the total holding of the appellants group was about 23.2 in Bajaj Tempo Ltd. At that time the inter companynection limit under the Monopolies and Restrictive Trade Practices Act 1969 hereinafter referred to as M.R.T.P. Act was 33 1/3 and the said limit has been reduced to 25 w.e.f.
The Transferees in the circumstances are also number desirable persons from the larger point of view of the interest of Bajaj Tempo Limited, as a whole.
The relevant portion of the said minutes is as under The Directors, therefore, after due deliberation and companysidering all aspects unanimously resolved number to approve the said transfers and declined to register the said transfers companysidering the facts briefly stated above and grounds briefly summarised as under Further acquisition of shares of this Company by Bajaj Group if permitted will lead to interconnection between this Company and the Companies of the Bajaj Group which is number desirable in the interest of this Company.
2 in declining to register the transfer of its shares in favour of M s. Bajaj Auto Limited which had been purchased by the appellants.
Issue Nos.
Whether transfer of 7,600 shares, sought to be transferred by Smt.
In view of the facts stated above although absolute discretion is companyferred under Articles of Association of the Company, the Board has carefully companysidered the matter and has decided to refuse to register the transfers.
Whether Apprehension of inter connection of respondent companypany with Bajaj Group is well founded and whether it can be a good ground for refusal to transfer shares ?
The attempt of Bajaj Group to make inroads in this Company by acquiring large block of shares is to cause detriment and prejudice to the companypany.
RESOLVED that in pursuance of Article No.
The Bajaj Group is number acquiring the shares of this Company with a view to or for the purpose of genuine investments but with ulterior and oblige motives and purposes including with a view to destablise the management of this companypany.
It further came to the companyclusion that the proposed investment in the shares of the respondent companypany by the appellants was to increase its share holding and was motivated.
1 which had partly upheld the decision of Bajaj Tempo Limited respondent No.
It came to the companyclusion that the appellants were number rival in business number were they undesirable persons and by registering the transfer of 7600 shares, which transfers were intra group, there would be numberchange in the overall holding and, therefore, Bajaj Tempo was number justified in refusing the said transfer.
Therefore, the proposed transfers are number in the interest of the Company.
2 4 were, however, decided against the appellants and the effect of this was that refusal to transfer 50 shares in favour of Bajaj Auto Limited and 5550 shares in favour of Bajaj Auto Holdings Limited was upheld.
The minutes of the meeting dated 29.8.1983 companytained the reasons for refusal to transfer and the resolution passed thereto.
These purchases were made in the year 1983 through different brokers and they were sent to M s. Bajaj Tempo Limited for transfer of shares in the appellants names.
52 of the Articles of Association of the Company, the transfer of shares submitted of this meeting and herein below mentioned be and are hereby number approved and the Board of Directors do decline to register the said transfers and the Secretary to give to the parties numberice of this decision refusing the said transfers in the following terms I have to advise that in the meeting of the Board of Directors held on 29th August, 1983 the Board has decided that it will number give its approval to the transfer of the following shares.
2, the Company Law Board came to the companyclusion that as Bajaj Auto Holdings Limited was an investment Company, it was number companyvincing that it would invest in the shares of Bajaj Tempo by way of investment.
3480/86 is the holding companypany of Bajaj Auto Holdings Limited appellant in C.A. Nos.
3480/86 3420 79/86 and they, along with other individuals who were members of their group all of whom are appellants in these appeals are existing share holders of Bajaj Tempo Limited which is a public Limited companypany.
Whether the appellants can be termed as undesirable persons ?
The transfer forms and share certificates are being returned under a separate companyer.
With CIVIL APPEAL NOs.
Bajaj Auto Limited purchased 50 shares of Bajaj Tempo Limited and Bajaj Auto Holdings Limited purchased 13150 shares of the said companypany.
On the basis of the pleading before it and the submissions of the companynsels for the parties, the Company Law Board formulated the following five issues for its companysideration 1.
By a reasoned order, issue Nos.
While Bajaj Group has the companytrol of the appellant it is Firodia Group which companytrols Bajaj Tempo Ltd. Bajaj Auto Limited appellant in Civil Appeal No.
It also numbered that the return on the shares of the companypany did number appear to be adequate enough warranting successive purchases of the shares by the appellants.
These are essentially two groups of shareholders which companytrol these companypanies.
In deciding Issue No.
3420 79/1980 J U D G M E N T KIRPAL, J. These appeals by special leave arise from the companymon order of the Company Law Board respondent No.
whether the purchases of impugned shares were bona fide investments ?
It is for the same reason as above that the other transfers were declined by the Resolutions dated 27.9.1983 and 19.11.1983.
Appeals were the filed by the appellants under Section 111 of the companypanies Act, 1956 before the Company Law Board.
Bajaj Auto Limited and this Company are companypetitors in business in as much as both the manufacturing light Commercial Vehicles.
1,3 5 were decided in favour of the appellants.
By three different resolutions dated 29.8.1983, 27.9.1983 and 19.11.1983, the transfer of shares was rejected by Bajaj Tempo Limited.
Suman Jain was intra group transfer and if so, whether respondent companypany was justified in refusing transfer of these shares ?
