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As hereinafter discussed, the said injunction order was not obeyed by the Company in that notwithstanding the said injunction, the Company and its management,--by way of giving effect to the said resolutions passed at the extraordinary general meeting on March 29, 1958,--had received applications for allotment of these 39,000 shares at a point of time when the injunction order was still in force. In the mean time there was an application for modification of the injunction order on May 15, 1958 but it was adjourned till June 30, 1958. The Company, however, in pursuance of their decision to take steps for allotment of these shares issued a notice on June 21, 1958 for Board meeting to be held on June 30, 1958. The injunction application not having been disposed of, there was a subsequent notice of meeting issued by the Company on July 23, 1958 for a Board meeting to be held on July 30, 1958 including in the Agenda an item for consideration of allotment of these 39,000 shares subject to any order of the Court. Then ultimately on duly 30, 1958 the injunction order was "vacated by the learned Subordinate Judge, whereupon the learned Advocate for the Jain Group applied for stay of operation of the said order vacating the injunction so that they might move the High Court; it is said that at that time the learned Advocate for the Company was present in Court and he also received a copy of the application for stay of operation of the order vacating the injunction, but, as fully discussed hereinafter, the allotment appears to have been rushed through with indecent haste and scramble, and allotment is stated to have been made within 40 minutes from the passing of the order vacating the injunction and everything was done as fait accompli--later on, however, on the same day the Subordinate Judge made, an order staying the operation of order vacating the injunction; but it was too late. What exactly happened on July 30, 1958 deserves justifiable comments, made on behalf of the Jain Group, that the Company had allotted these 39,000 shares hastily with an ulterior motive.

6-9. (After discussion of evidence on the point whether the various clauses in the agreement were acted upon. His Lordship proceeded:)

10. A point was taken, on behalf of the Company, that at one stage in the proceedings before the learned Subordinate Judge in the said Title Suit No. 21 of 1958 the learned counsel for the Jain Group (plffs. in the said: suit) has conceded that the said Agreement of July 27, 1954 is not binding and cannot be enforced against the Company since the Company is not a party to it. From the judgment of Mr. Justice Rao in Ahoka Marketing Ltd. v. Kalinga Tubes Ltd., Misc. Appeal No. 77 of 1958,--being an appeal from the said order dated July 30, 1958 of the learned Subordinate Judge in the said Title Suit No. 21 of 1958, vacating the order of injunction made therein,--It, however, appears that the learned counsel for the Jain Group (plaintiffs in the said suit) contended that the learned Subordinate Judge misconceived the effect of the concessions made before him that the said Agreement dated July 27, 1954 was not binding and could not be enforced against the Company since the Company was not a party to it, and further that the learned Subordinate Judge wrongly came to the conclusion that it had no force now and need not be taken into consideration. Indeed, from the facts and circumstances, I am satisfied that the effect and legal implications of the Agreement were presumably not fully presented to the learned Subordinate Judge and thus the learned Subordinate Judge obviously was not in a position at that stage to appreciate the effect and implication of what was being submitted before him in that particular context.

15. Then we come to the crucial date, namely, July 30, 1958 on which the said 39,000 new shares were ultimately allotted to persons to the exclusion of the existing shareholders including the petitioner as one of the minority shareholder. Some time after 10.30 in the morning of that date when the court normally sits, the learned Subordinate Judge vacated the interim order of injunction in the said Title Suit No. 21 of 1958. Immediately an application was made by the learned Advocate for the Jain Group, who were plaintiffs in the said suit, for stay of operation of the said order vacating the injunction for three days, in order to be able to move the High Court for an order of stay of operation of the said order; as appears from records, the learned Advocate for the Company and the rival groups was present in court when the said prayer was made to the learned Subordinate Judge that the operation of his order vacating the injunction will take effect after three days; it further appears that at about 12.30 P.M. the learned Advocate for the Company and the rival groups was served with a copy of the petition for stay of operation of the said order vacating the injunction; acknowledgment of receipt of which appears off the body of the petition itself. In the meantime,--as the minutes of the Board Meeting of July 30, 1958 snow,--the Chairman of the meeting (Sri Lognathan of the rival group) placed before the Board a note received from the Company's Advocate at 11.45 A.M. and informed the Board that the learned Subordinate Judge had vacated the order of injunction previously passed by him in the said suit, thereupon, the Chairman produced before the Board the applications of various persons offering to purchase snares in the Company and the Chairman informed the Board that 5 percent of the application money had already been received by the Company, and immediately shares were allotted to seven persons who are stated to have applied for the same along with the application money; the meeting is stated to have terminated at 10.10 p.m.; soon mere-after notices of allotment were issued and posted under certificate of posting and the names of the allottees were entered in the Register of Members, and thereafter a return, as required under the Companies Act, 1956, was filed with the Registrar of Companies, Orissa, Cuttack, by 12.40 P.M.

52. Re: Points challenging the maintainability of the petition.

In the course of argument, a point was taken, on behalf of the Company that the orders made in the said Title Suit No. 21 of 1958 operate as res judicata and that by reason of the Jain group having filed the said Title Suit and pursued it, they are estopped from making the present application. Apart from the position that this Court has exclusive jurisdiction by virtue of Section 10, read with Section 2(11) of the Indian Companies Act, 1956 as aforesaid, the scope of the said Title Suit is limited, and, in fact, the trial court in the suit, when vacating the order of injunction, made it clear in his order dated July 30, 1958 that the plaintiffs in the suit have got remedies under Section 397 and Section 398 of the Indian Companies Act and that the High Court will have ampre power under Section 402 of the Companies Act to direct the regulation of the conduct of the company's affairs; further that Section 10 of the Act confers jurisdiction on the High. Court in respect of such matters. Mr. Justice Rao,--while dismissing the. Misc. Appeal No. 77 of 1958 from the said order of the trial court in the suit, vacating the interim injunction as aforesaid,--also made it amply clear that he was concerned only with the legality or propriety or otherwise of the order ,of the learned Subordinate Judge vacating the interim injunction and the desirability or otherwise of this Court issuing a temporary injunction; further that if the appellants therein (referring the plaintiffs in them said title suit, namely, the Jain Group) are aggrieved by the conduct of the directors on July 30, 1958, they can seek any remedy available to them in law. Thus,--having regard to the exclusive jurisdiction of the High Court under Sections 397 to 407 both inclusive, read with Section 10 of the Companies Act 1956,--the decision in the said Misc. Appeal cannot operate as res judicata; indeed the question of granting reliefs against oppression to the minority shareholders and mismanagement of the Company's affairs under Sections 397, 398, 402 and 403 is the exclusive jurisdiction of the High Court alone, and no such reliefs, as prayed for herein, can be given in the said Title Suit; therefore, no order made in the said Title Suit can operate as res judicata, nor there can arise any question of alleged estoppel either in law or in facts of this case.