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5. Shri Sarkar, senior advocate for the company and its directors, initiating his arguments submitted that in the absence of any arguments by counsel for the petitioner in relation to various other allegations in the petition, he was restricting his arguments only on the issue relating to the sale of the components unit. He refuted the allegations of the petitioners that the explanatory statement did not contain full particulars. He pointed out that the components unit is a division of the company. This unit was receiving technical support from the holding company, namely, KPENV, the Netherlands which was also in the business of manufacturing components. Since the holding company had decided to hive off the components business, the company would not be receiving any further technical support from the parent company especially when such support is necessary due to vast changing technology. Since the components business of the parent company had been transferred to B. C. Components International BV, it evinced interest in taking over the components division of the company through a subsidiary to be established in India. Accordingly, in the interests of the company, it was decided to sell this unit to M/s. B. C. Components India Pvt. Ltd., which is a subsidiary of the foreign company which had taken over the components business of the parent company. Originally, M/s. KPMG were appointed to value this unit and they valued the unit in the range of Rs. 24.3 crbres to Rs. 28.4 crores. Later, at the instance of the LIC, the value was reassessed by M/s. B. S. Billimoria and Co. which valued the components unit in the range of Rs. 28 crores to Rs. 30 crores. The second valuation was done after the notice for the annual general meeting was sent and as such the same was not indicated in the explanatory statement. However, the agreement was to sell this unit at a value of Rs. 32.5 crores which is much more than the valuation done by either of the valuers. He also pointed out that even though the petitioners claim that the value of the land would be more than Rs. 100 crores, they have not produced even an iota of evidence to substantiate their stand. In this connection, he referred to Mohta Brothers (P.) Ltd. v. Calcutta Landing and Shipping Co. Ltd. [1970] 40 Comp Cas 119 (Cal) and Dua (M. M.) v. Indian Dairy and Allied Services Pvt. Ltd. [1996] 86 Comp Cas 657 (CLB) wherein it was held that in respect of any allegation, full particulars should be given failing which the same cannot be enquired into. He explained that this unit was being sold as a going concern along with all the employees some of whom are shareholders, with their full consent.

10. Shri Lahiri, counsel for the 11th respondent submitted that his client is a bona fide purchaser for appropriate consideration. He submitted that his client is a subsidiary of M/s. B. C. Components International BV which had taken over the components business of KPENV all over the world. His client was incorporated as a private limited company to take over the components unit of Phillips India. The majority shares of the parent company are held by Compass Partners International and KPENV does not hold any shares in Compass Partners. Thus, there is no reason either for KPENV or the company to have bestowed any benefits on B. C. Components India Pvt. Ltd. by selling the components unit at a lower value. For the sake of incorporating this company, two employees of Phillips India Ltd. subscribed to the memorandum and the registered office of the company was indicated to be that of the valuer. Now that the parent company has already invested in the shares of the subsidiary, it would have its own directors and the registered office would be shifted. Shri Lahiri pointed out that the petitioners were fully aware of the proposal of the company to hive off the components unit for quite some time. As a matter of fact, the proposal was put before the general body in a meeting held on December 4, 1998. Referring to pages 113-115 of the rejoinder, he pointed out that even the dealers and others had already been advised about the forthcoming sale of this unit. Accordingly, he submitted that the sale of the unit was done in a transparent manner and for a value more than what was assessed by the two independent valuers and as such the petitioners cannot impugn the sale.

19. Counsel for the petitioners also questioned the wisdom of the management in selling this unit. One of the concerns expressed by him was that after the sale of this unit, the company would be forced to purchase various components from this unit at exorbitant prices which would be against the interest of the company, shareholders and consumers. We do not find much substance in this argument. It was indicated during the hearing as also confirmed by the notice issued by the company at page 113 of the rejoinder that the turnover arising out of this unit in the total turnover of the company is only about 5 per cent. Further, in many large companies, depending upon the business and technological exigencies, acquisition of new businesses and disposition of the existing businesses are the order of the day. Such decisions fall squarely within the realm of indoor management and within the full competence of the board subject to, where the statute provides for shareholders' approval, their approval. A judicial body cannot substitute its wisdom on commercial and business decisions of the board/shareholders as long as they are bona fide and lawful. In the present case, the components unit was proposed to be sold mainly on account of non-availability of future technological support from the parent company which itself had hived off the components business. In the opinion of the board of directors consisting of independent non-executive directors and financial institution nominee, this components unit would become unviable without such technical support and as such it decided to sell off this unit. The decision of the board has been overwhelmingly supported by the shareholders who have voted in favour of the sale of the unit. A commercial/business decision taken by the board and approved by the majority shareholders cannot be impugned by shareholders holding minimal shares in the company as held in Gopal Das Gujarati v. Titagarh Paper Mills Co. Ltd. [1986] 60 Comp Cas 920 (Cal) with which we fully agree.