On 28.12.2002 Annual General Meeting AGM of HQRL was held in which authorised capital was increased from Rs.90 lakhs to Rs.33 crores.
On 14th January, 2009, Hilcrest took over the management of HQRL from R.P. Mittal Group through Ashok Mittal.
190/ whereas the shares were allotted at par i.e. at Rs.
In these circumstances, funds were brought in by Mr. Ashok Mittal.
On 14th August, 2009 the appellants filed an interim application being IA No.9920/ 2009 in C.S. OS 1832 of 2008 seeking injunction against Hilcrest and Mr. Ashok Mittal from going ahead with the rights issue.
The Resolution passed in Board meetings regarding allotment transfer of shares was also challenged amongst others on the ground that numbernotice had been issued to Ashok Mittal who was, at the material time, a Director.
Most of these demands were based on oral agreements with Mr. R.P. Mittal.
When the hotel was bought it required extensive renovation and thus further funds were required.
On 14th January, 2009, the Division Bench of Delhi High Court by a companymon order disposed of FAO OS No.282/2005, FAO OS 426 of 2008 and 440 of 2008 upholding the right of Hilcrest to vote in the meetings of HQRL.
The question of whether HQRL was a private companypany limited by shares of public limited companypany was left open for adjudication in the suit.
The said 3 meetings had a direct bearing on shareholding of Hillcrest.
The holding companypany filed a petition under Sections 397 and 398 of the Companies Act, 1956 in the High Court.
The backdrop facts indicate that the Government of India took a policy decision on 5.7.2002 to disinvest its shares in the Indian Tourism Development Corporation in short, the ITDC which owns various hotel properties one of them being Indraprastha Hotel, formerly known as Hotel Ashok Yatri Niwas, hereinafter referred to as the hotel .
The Respondent No.6 Mr. N.P. Gupta and the Respondent No.5, Mr. Suman Jain were appointed as Additional Directors.
The said resolution was rejected by the Registrar of Companies on the ground of late filing and according to the appellants, HQRL had number filed it again with the Registrar of Companies number had removed the defects.
Delhi High Court restrained Hillcrest from giving effect to the resolution passed in the EOGM.
The AGM was attended by Mr. Ashok Mittal.
On 24th October, 2008 the interim order passed by the Delhi High Court on 5th October, 2008 in IA No.12164/ 2008 in C.S. OS No.1832 of 2008 was made absolute.
In August, 2006 Hilcrest filed a suit being CS OS No.1832/ 2008 in Delhi High Court for a declaration that Hilcrest had voting rights in HQRL in view of the Resolution dated 30th September, 2002 passed by HQRL whereby HQRL had been companyverted from a private companypany limited by shares to a public companypany limited by shares.
Signature Not Verified 3.
Prior to leaving the management of HQRL, Mr. R.P. Mittal and Mrs. Sarla Mittal with the help of their accomplices, removed and did away with the books of account and statutory records of HQRL.
On 20th August, 2009, the appellant appealed against the order dated 18th August, 2009 referred to above.
HQRL filed a civil suit being CS OS 992 of 2005 before the High Court of Delhi for declaration, cancellation and mandatory injunction against the requisition under section 169 of the Companies Act.
On 22nd August, 2005 Hillcrest and Ashok Mittal filed a petition bearing No.64/2005 in the Principal Bench of the Company Law Board at Delhi and under Sections 397 and 398 of the Companies Act alleging oppression and mismanagement of HQRL by the R.P. Mittal Group.
The present case arises out of the said petition filed by Hillcrest and Mr. Ashok Mittal against the appellants in the Company Law Board in September, 2005 under Sections 397/398 of the Act, challenging the allotment transfer of shares effected on 27.7.2004, 7.1.2005 and 10.5.2005 on inter alia grounds of i financial mismanagement of HQRL by Mr. R.P.Mittal and Mrs. Sarla Mittal ii Invested in Cumulative Redeemable Preference Share CRPS on the understanding that HQRL would remain a subsidiary of Moral and that in the event of HQRL failing to pay any dividend for two years, Hillcrest would be entitled to exercise its voting rights in all resolutions iii illegality of allotments made on 27.7.2004, 7.1.2005 and 10.5.2005.
Ltd., hereinafter referred to in short as Pondy Metals.
In or about AugustSeptember, 2003, to fund the redevelopment of the hotel, a term loan of Rs.40 crores was raised from Indian Overseas Bank.
Thereafter, a number of third parties, all related to Mr. R.P. Mittal started claiming to have lent monies to HQRL.
On 4.8.2005 Hillcrest proceeded to companyvene EOGM and passed a resolution inter alia removing Mr. R.P. Mittal and Mrs. Sarla Mittal from the Board of HQRL.
On 31.1.2006, C.P. No.64/2005 was dismissed, inter alia, on the ground that it was a mala fide petition by Hillcrest and Mr. Ashok Mittal to take over the companypany.
On 21.12.2002 a Board meeting of HQRL was held.
On or about 1st October, 2008, Hilcrest filed an application being IA No.12164/ 2008 in C.S. OS No.1832/ 2008 inter alia praying that Hilcrest be allowed to participate in the Extraordinary General Meeting of HQRL to be held on 16th October, 2008 and further praying for appointment of an Administrator to look after the affairs of the companypany.
In 2006 three cross appeals were filed against the order dated 31.1.2006 passed by the Company Law Board.
On 30.9.2002 HQRL passed a resolution in its Extra Ordinary General Meeting EOGM to change its status from private limited to limited companypany.
Moral transferred 13 equity shares valued at Rs.10 per equity share of HQRL to 7 persons, i.e. 2 shares to the appellant No.1, Mr. R.P. Mittal, 3 shares to the appellant No.2, Mrs. Sarla Mittal, one share to the respondent No.3, Mr. Ashok Mittal and 7 shares to 4 daughters of the appellant Nos.1 and 2, R.P. Mittals family thus held 99.97 equity shares, as against one equity share held by his brother, Mr. Ashok Mittal.
On 15th October, 2008 the Delhi High Court passed an interim order in the said IA No.12164 of 2008 in C.S. OS 1382 of 2008 allowing Hilcrest to vote in the Extraordinary General Meeting to be held on 16th October, 2008 and also appoint Administrator to look after the day to day affairs of HQRL.
Hilcrest also made an application in suit being C.S. No.992/2005 for vacating of the interim order dated 12th August whereby Hilcrest had been restrained from giving effect to the Resolution passed at the meeting of HQRL on 4th August, 2005.
The appellants state that on or about 21 st October, 2008, Mr. R.P. Mittal filed an application under the Right to Information Act whereupon the Registrar of Companies, by letter dated 21 st October, 2008 informed the appellant that the status of HQRL had number been changed from private companypany limited by shares to public companypany limited by shares for the technical reasons specified in the said letter.
Being aggrieved by the order dated 12 th August, 2005 in C.S. OS No.992/ 2005 Hilcrest filed an appeal therefrom being FAO OS No.282/2005 before the Division Bench of Delhi High Court.
On 12th August, 2005, Delhi High Court passed an order in an interlocutory application being IA 5505 in the said suit being CS OS No.992 of 2005 restraining Hillcrest from giving effect to the resolution passed in the EOGM held on 12.8.2005.
On 30th July, 2009, Hilcrest and Ashok Mittal sent numberice to the existing shareholders of HQRL under Section 81 21 of the Companies Act to allot further equity shares.
According to the appellants the loan was secured by the joint personal guarantees of Mr. R.P. Mittal, Mrs. Sarla Mittal and Mr. Ashok Mittal, the companyporate guarantee of Moral and the companylateral security of personal assets of Mr. R.P. Mittal and Mrs. Sarla Mittal.
There was an increase of 71 lakh equity shares of Rs.10 each and 25 lakh preference shares of Rs.100 per share and a Special Business Resolution No.10 was passed under section 81 1A of the Companies Act, 1956 hereinafter referred to as the Companies Act .
As against Hillcrests investment of Rs.28,29,29,000/, the appellants had invested only Rs.90 lakhs in the share capital of HQRL.
Hilcrest filed an application being IA No.12164/ 2008 in the said suit being CS OS No.1832/ 2008 companytending that HQRL had obtained an order of injunction on 12th August, 2005 by fraudulently and companycealing the fact that it had acquired the status of a public companypany in 2002.
On 16th October, 2008, Mr. R.P. Mittal, Mrs Sarla Mittal and HQRL filed an appeal against the orders dated 15 th October, 2008 and 24th October, 2008 passed by the Delhi High Court in IA No.12164/ 2008 in C.S. OS 1832 of 2008 before the Division Bench.
The parentsubsidiary relationship between Moral and HQRL was independent of the status of HQRL as a public companypany limited by shares and as a companysequence of the shareholders resolution dated 30.9.2002.
HQRL has further companytended that the management changed hands from R.P. Mittal group on 15.1.2009 vide order of Delhi High Court.
ARUN MISHRA, J. The appeal arises out of the judgment dated 31.5.2013 passed by the High Court of Delhi, setting aside an order dated 31.1.2006 passed by the Company Law Board in Company Petition No.64/2005.
By a judgment and order dated 20 th July, 2009, a Division Bench of the High Court upheld the right of Hilcrest to vote on the ground that HQRL was prima facie a public limited companypany.
On 8.7.2005 Hillcrest issued numberice under section 169 6 of the Companies Act to call for EOGM on 4.8.2005.
Appellant Nos.1 and 2 filed a special leave petition in this Court being SLP C No.1069 of 2009 under Article 136 of the Constitution.
When the new management assumed charge of HQRL, the financial position of HQRL was weak, there being only Rs.2.82 lacs in the bank account of HQRL the immediate liabilities including government dues, taxes and salaries of staff were Rs.98,62,563 HQRL had defaulted on payment of interest to the bank amounting to Rs.4,73,98,446 along with total bank liability of about Rs.30 crores and its account was on the verge of becoming Non Performing Asset NPA , due to defaults in repayment of interest and principal and it was already in litigation with the bank.
