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Documents citing Praful M. Patel vs Wonderweld Electrodes (P.) Ltd. on 18 September, 2001

S. Varadarajan And P. Logusundaram vs Udhayem Leasings And Investments ... on 26 October, 2004

shareholding of the second respondent, which would constitute an act of oppression, as held in Praful M. Patel v. Wonderweld Electrodes (P) Ltd; Akbarali A. Kalvert v. Konkan Chemicals Pvt. Ltd and M.K. Haridas v. Asal Malabar Beedi Depot Pvt Ltd. (supra). The second respondent cannot in any way derive support from the annual return dated 07.07.2000 claiming the impugned allotment, notwithstanding the serious dispute raised by the petitioners in regard to the genuiness of the figures in relation to the paid up capital contained therein. The transfer of shares of the Company is governed by articles 15 to 25, which are mandatory. Article 16 provides that no shares in the Company, shall be transferred unless and until, the rights of pre-emption are exhausted in the manner prescribed in the articles. The respondents have produced copies of the notice dated 09.04.2002 said to have been issued by the respondents 5 to 8 separately under article 17 to the Board of directors expressing their desire for sale of their shares. In this connection, the averments made in the counter statement assuming importance are reproduced here below;
Company Law Board Cites 23 - Cited by 5 - Full Document

Mrs. Najma M. Saiyed vs Mehboob Productions Private Limited ... on 11 March, 2005

Praful M. Patel v. Wonderwell Electroles Pvt. Ltd. (2003 56 CLA 7 CLB): In this case, it has been held that in a petition under Sections 397/398, the interest of the company is paramount and with a view to protect its interest, one of the directions that is normally given is that one group should go out of the company and normally the minority group which is alleging oppression is directed to go out of the company.
Company Law Board Cites 22 - Cited by 1 - Full Document

Mr. Arun Kumar Mohta And Smt. Sushila ... vs Ganesh Commercial Co. Ltd. And Ors. on 30 March, 2006

20. In a case of oppression, a member has to specifically plead on five facts - (a) what is the alleged act of oppression; (b) who committed the act of oppression; (c) how it is oppressive; (d) whether it is in the affairs of the company; (e) and, whether the company is a party to the commission of the act of oppression. In the present case all the five aspects of oppression stand proved. The acts of oppression in the affairs of the company have been listed in detail highlighting how these are oppressive. There is specific averment as to who committed the act of oppression and how the company is a party to the oppression. It is a well settled proposition that the provision of Sections 397 and 398 are to be invoked to get the grievances of oppression and mismanagement redressed. The petitioners have rightly invoked the provisions of these sections. If a member who holds the majority of share in a company is reduced to the position of minority shareholders in the company by an act of the company or by its Board of Directors malafide, the said act must ordinarily be considered to be an act of oppression to the said member. I am, therefore, of the view that the allotment of shares impugned in the company petition made for personal gains and with a view to gain advantage against the other shareholders of a closely held company was neither in compliance with the legal requirements nor ensured the fair play and probity in corporate management, resulting in the enhancement of the shareholding of the second respondent, which would constitute an act of oppression, as held in Praful M Patel v. Wonderweld Electrodes P. Ltd (2002) 6 Comp LJ 423, Akbarali A Kalvert v. Konkan Chemicals P. Ltd. (1994) 15 CLA 170(CLB (2002) 110 Comp.
Company Law Board Cites 15 - Cited by 2 - Full Document

Shri Rajesh Patil vs Moonshine Films Pvt. Ltd. And Ors. on 9 June, 2006

10. In a case of oppression, a member has to specifically plead on five facts - (a) what is the alleged act of oppression; (b) who committed the act of oppression; (c) how it is oppressive; (d) whether it is in the affairs of the company; (e) and, whether the company is a party to the commission of the act of oppression. In the present case all the five aspects of oppression stand proved. The acts of oppression in the affairs of the company have been listed in detail highlighting how these are oppressive. There is specific averment as to who committed the act of oppression and how the company is a party to the oppression. It is a well settled proposition that the provision of Sections 397 and 398 are to be invoked to get the grievances of oppression and mismanagement redressed. The petitioner has rightly invoked the provisions of these sections. If a member who holds 50% of the shares in a company is reduced to the position of minority shareholder in the company by an act of the company or by its Board of Directors malafide, the said act must ordinarily be considered to be an act of oppression to the said member. I am, therefore, of the view that the allotment of shares impugned in the company petition made for personal gains and with a view to gain advantage against the other shareholders of a closely held company was neither in compliance with the legal requirements (except the allotment on 11.12.2002 though it suffered from on illegality and no proper procedure was followed)nor ensured the fair play and probity in corporate management, resulting in the enhancement of the shareholding of the second respondent, which would constitute an act of oppression, as held in Praful M Patel v. Wonderweld Electrodes P. Ltd (2002) 6 Comp LJ 423, Akbarali A Kalvert v. Konkan Chemicals P. Ltd. (1994) 15 CLA 170(CLB (2002) 110 Comp.
Company Law Board Cites 31 - Cited by 1 - Full Document

In Re: Legend Technologies (India) ... vs Unknown on 15 February, 2008

• Praful M. Patel v. Wonderweld Electrodes P. Ltd. (2003) Vol. 115 CC 377 to show that in a petition seeking relief against oppression under Section 397, the principles of quasi-partnership can be applied even though there was no deadlock in the management of the company, because deadlock in the management is not a exclusive ground which would depend on the facts of each case;
Company Law Board Cites 73 - Cited by 0 - Full Document

Tenneco Mauritius Limited vs Bangalore Union Services Limited, Dr. ... on 9 December, 2002

In Praful M Patel v. Wounderweld Electronic Pvt Ltd (2002 36 SCL 825), - a petition filed by the majority- considering the fact that the minority shareholder had majority on the Board and was in control of the company for a long time, the majority was directed to sell its shares to the minority Likewise, in VLS Finance V Sunair Hotels Ltd, not withstanding the high financial sake of the petitioner in the company, since the respondents had nurtured the project and completed the same, the petitioner was given the option to go out of the company. Therefore, the final order would depend on facts of each case as held in Hillock Hotels P Ltd and Rakhra Sports P Ltd cases (supra) as cited by Shri Kapur. In the present case before us, the Indian Block has been in management of the Company for fairly a long time before the Foreign Block became Shareholders in 1995. The Indian Block subscribed to further shares as late as in the year 1999-2000 along with the Foreign Block. Discussions on further capitalization had not reached a finality. Further, even though the Indian Block has asserted that it is the Foreign Block which has been in the management of the Company during the last few years, yet, the Foreign Block has also asserted that the Indian Block was also in active management of the Company. Therefore, directing the Indian Block which has been associated with the company for a very long time even before the Foreign block became shareholders, to go out of the Company would be unfair to them. In the same way, the Foreign Block has majority shares in the company and also has substantial financial commitment in the Company and has also given guarantee of over Rs. 30 crores and therefore it will be inequitable to direct Foreign Block also to go out of the Company. Considering these facts, this Bench tried to bring out an amicable settlement between the parties during the course of hearing the petitions. The Indian Block was willing to go out of the Company on receipt of a fair consideration for its shares, but the quantum of consideration could not be agreed to between the parties. Both the sides made their own valuation through independent valuers. While as per the valuation done by the Indian Block, the share price came to about Rs. 10,975 per share, as per the valuation done by the Foreign Block it was Rs. 31 per share. Even after the hearing was concluded this Bench held discussions with the parties to explore the possibility of an amicable settlement. During the discussion, while the Indian Block was prepared to go out of the Company for a consolidated consideration of Rs. 30 crores, the Foreign Block offered only Rs. 5 crores. This Bench suggested a sum of Rs. 22 crores, which was not acceptable to the Foreign Block and it insisted that the valuation of the share should be carried by an independent valuer which was not acceptable to the Indian Block and it took a stand if the consideration is not adequate it would not be interested in selling its shares but would purchase the Foreign Block at that price. Normally, this Bench orders valuation of shares only if it directs one of the parties to go out of the Company on the basis of the merits of the case. Without identifying as to which of the parties should go out of the company, carrying out valuation becomes a wasteful exercise. In the present case, as pointed out earlier, it would not be equitable for us to direct, either of the parties to go out of the Company, in view of the fact while the Indian Block has been in control of the Company for a long time even before the Foreign Block came into picture, Foreign Block holds majority shares and has substantial financial commitment in the Company. Therefore, most equitable manner of parting of ways has to be designed.
Company Law Board Cites 29 - Cited by 3 - Full Document

Deepak Lohia vs Kamrup Developers Private Limited And ... on 31 December, 2001

Even though the usual course of order passed by courts has been to direct the minority to sell the shares to the majority, it is not uncommon, in the facts of a case to order the majority to sell the shares to the minority as has been done by this Board itself in Praful M. Patel v. Wonderweld Electrodes Pvt. Ltd. (since reported in [2003] 115 Comp Cas 377 (C. P. No. 28 of 1999)). In that case, the minority shareholders were in a majority on the board and were carrying on the day-to-day affairs of the company, while the majority shareholders were either abroad or living in a far off place. Since the company was being managed by the minority shareholders, this Board directed the majority to sell the shares to the minority. In the present case also, the admitted position is that the petitioner is not a resident of Guwahati and it is the third respondent who has been carrying on the day-today affairs of the company. Further, the company does not own the land on which the project of the company is coming up. As per the lease agreement entered into with the second respondent, he has the right to terminate the lease which learned counsel for the respondents very clearly pointed out that the second respondent would do if the company were to go to the petitioner. Therefore, we consider that it would in the interest of the company that the control and the management of the company is vested with the third respondent. In other words, it is the petitioner's group which has to go out of the company. In addition to their investment in 2,400 shares, the petitioner's group admittedly invested substantial amount either as loans or as booking advance as indicated in annexures P-4 and P-5 and the amount so invested is not disputed by the respondents. Since this money has been utilized for the project and since the petitioner and his group would go out of the company once for all, these amounts would also have to be repaid to the petitioner/his group with appropriate rate of interest. During the hearing, learned counsel for the respondents also indicated that it could be done provided sufficient time is given to the company.
Company Law Board Cites 8 - Cited by 1 - Full Document

Deepak Lohia vs Kamrup Developers (P.) Ltd. on 31 December, 2001

Even though the usual course of order passed by courts has been to direct the minority to sell the shares to the majority, it is not uncommon, in facts of a case to order the majority to sell the shares to the minority as has been done by this Board itself in Praful M. Patel v. Wonderweld Electrode (P.) Ltd. [CP No. 28 of 1999]. In that case, the minority shareholders were majority on the Board and were carrying on the day-to-day affairs of the company, while the majority shareholders were either abroad or living in a far off place. Since the company was being managed by the minority shareholders, this Board directed the majority to sell the shares to the minority. In the present case also, the admitted position is that the petitioner is not a resident of Guwahati and it is the third respondent who has been carrying on the day-to-day affairs of the company. Further, the company does not own the land on which the project of the company is coming up. As per the lease agreement entered into with the second respondent, he has the right to terminate the lease to which the learned counsel for the respondents very clearly pointed out that the second respondent would do so if the company were to go to the petitioner. Therefore, we consider that it would in the interest of the company that the control and the management of the company is vested with the third respondent. In other words, it is the petitioner's group which has to go out of the company. In addition to their investment in 2400 shares, the petitioner's group admittedly invested substantial amount either as loans or as booking advance as indicated in Annexures P-4 and P-5 and the amount so invested is not disputed by the respondents. Since this money has been utilized for the project and since the petitioner and his group would go out of the company once for all, these amounts would also have to be repaid to the petitioner/his group with appropriate rate of interest. During the hearing, the learned counsel for the respondents also indicated that it could be done provided sufficient time is given to the company.
Company Law Board Cites 9 - Cited by 1 - Full Document

Binani Metals Ltd. And Triton Trading ... vs Gallant Holdings Ltd. And Ors. on 28 December, 2006

I find that the petitioners have rightly invoked the provisions of Sections 397/398. If a member who holds the majority of shares in a company is reduced to the position of minority shareholders in the company by an act of the company or by its Board of Directors malafidely, the said act must ordinarily be considered to be an act of oppression to the said member. I am, therefore, of the view that the allotment of further impugned shares of 10,000 in the company made for personal gains and with a view to gain advantage against the other shareholders of a company which was earlier the subsidiary company of the petitioners was neither in compliance with the legal requirements nor ensured the fair play and probity in Corporate management, resulting in the enhancement of the shareholding of the respondents No. 2 to 7. This would constitute an act of oppression as held in Praful M Patel v. Wonderweld Electrodes P.Ltd (2002) 6 Comp LJ 423, Akbarali A Kalvert v. Konkan Chemicals P. Ltd. (1994) 15 CLA 170(CLB (2002) 110 Comp.
Company Law Board Cites 6 - Cited by 0 - Full Document
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