Search Results Page
Search Results
1 - 10 of 17 (0.46 seconds)Section 398 in The Companies Act, 1956 [Entire Act]
Section 402 in The Companies Act, 1956 [Entire Act]
Hind Overseas Private Limited vs Raghunath Prasad Jhunjhunwalla And Anr on 10 October, 1975
Hind Overseas Pvt. Ltd. v. Raghunath Prasad Jhunjhunwala [1976] 46 Comp Cas 91 ; AIR 1976 SC 565 : When more than one family or several friends or relations together form a company and there is no right as such agreed upon for active participation of members who are sought to be excluded from management, the principles of dissolution of partnership cannot be liberally invoked. Besides, it is only when shareholding is more or less equal and there is complete deadlock in the company on account of lack of probity in the management of the company and there is no possibility of smooth and efficient continuance of the company as a commercial concern, there may arise a case for winding up on just and equitable ground.
Hanuman Prasad Bagri & Ors vs Bagress Cereals Pvt. Ltd. & Ors on 27 March, 2001
22. Sri Choudhary referred to the decision of the Supreme Court in Bagri's case [2001] 105 Comp Cas 493 to submit that unless the petitioners establish that the company is liable to be wound up on just and equitable grounds and that such winding up would not be in the interests of the petitioners, no relief could be granted under Section 397 of the Act. A reading of that judgment would show that the court, after observing that the petitioners had not established any act of oppression or mismanagement in the affairs of the company further observed (page 495) : "therefore, we have to pay our attention only to the aspect that the winding up of the company would unfairly prejudice the members of the company who have the grievance and are the applicants before the court and that otherwise the facts would justify the making of a winding up order on the ground that it was just and equitable that the company should be wound up. In order to be successful on this ground the petitioners have to make out a case for winding up of the company on just and equitable grounds. If the facts fall short of the case set out for winding up on just and equitable grounds, no relief can be granted to the petitioners". It found that the only substantive allegation relating to the removal of the petitioner as a director could be agitated in a suit and this would not justify winding up on just and equitable grounds. However, the present case, the claim of the petitioners arises out of their claim of quasi-partnership and we have already held that by denying the petitioners a representation on the board, they are being oppressed by the majority shareholders. In the case of dissolution of a partnership, the just and equitable grounds are wider than the just and equitable grounds applicable in the case of winding up of a company.
M/S Kilpest Pvt. Ltd. & Ors vs Shekhar Mehra on 8 October, 1996
16. In the present case, the petitioners have invoked this principle on the ground that the late J.S. Chawla was one out of the three promoters of the company and the company was being managed on the principles of partnership with active participation of all the three promoters in the management of the affairs of the company right from incorporation. This joint management and subsequent induction of members of the three families on to the management, would, according to them, prove that the company is in the nature of partnership. Even though in Kilpest Pvt. Ltd. v. Shekhar Mehra [1996] 87 Comp Cas 615 the Supreme Court has held that only in rare cases the principles of partnership should be applied, the court has not completely barred application of the principles of partnership to a company. Therefore, once the facts and circumstances of a case indicate that on piercing the corporate veil, the real structure is found to be not that of a company, equitable consideration applicable to a partnership could be applied to that company.
Dipak G. Mehta And Ors. vs Anupar Chemicals (India) Pvt. Ltd. And ... on 22 March, 1999
A similar objection was examined by this Board in Anupar Chemicals case [1999] 98 Comp Cas 575, 597, as follows "learned counsel for the respondents submitted that the petitioners have not established that grounds exist for winding up of the company on just and equitable ground. He also relied on the judgment of Bombay High Court that, on similar allegations, the court held that there was no ground to wind up the company on just and equitable ground. We would like to differentiate between a winding up proceeding and a proceeding under Section 397. In a winding up proceeding on just and equitable ground, the court may order winding up once the grounds are established. However, in a Section 397 petition, which is alternative to a winding up petition, first one has to establish that there is oppression. Without the element of oppression being established, the question of grant of relief does not arise.
Atmaram Modi vs Ecl Agrotech Ltd. And Ors. on 15 July, 1999
In Atmaram Modi v. ECL Agrotech Ltd. [1999] 98 Comp Cas 463 this Board has held that in the course of business of a partnership, a partner is entitled to have certain legitimate expectations. Now in the present case the admitted position is that there is no agreement relating to joint management and the articles also do not provide for the same.
Smt. Nupur Mitra vs Basubani (P.) Ltd. on 25 April, 2001
In Smt. Nupur Mitra v. Basubani (P.) Ltd. [2001] 41 CLA 306 (CLB) ; [2002] 108 Comp Cas 359 a family consisted of six brothers. Four of the brothers were the signatories to the memorandum and they were also the first directors of the company incorporated in 1948. The total share capital consisted of 500 shares of Rs. 100 each. While one brother had subscribed to 100 shares, the other three had subscribed to 25 shares each at the time of incorporation. In 1950, the balance 325 shares were issued by which shares were issued to all the 6 brothers. The issue and allotment of shares were challenged on the ground that in terms of Section 105C of the 1913 Indian Companies Act, before issue and allotment of shares to outsiders, the then four shareholders who were the signatories to the memorandum alone should have been offered shares and since there was no record to show that it was done and in the absence of any written agreement between the brothers for joint holding and management, the allotment should be declared as null and void. This challenge was made in the year 1998 after the death of all the six brothers. It was contended by the other side that there was an understanding among the six brothers that all would hold shares in the company. After considering the various issues including one relating to limitation, on the merits, this Board concluded that a status which had been in vogue for a long time without any protest, cannot give rise to a cause of action and the course of conduct of the parties would raise a presumption of an unwritten agreement for joint holding and management among the 6 brothers. In the same way, in the present case, we have to only see, in the absence of any written agreement and provisions in the articles and in the absence of any of the original promoters, whether circumstances exist to draw a presumption of an unwritten agreement relating to joint management giving rise to legitimate expectation as that of a partnership as claimed by the petitioners.
K.N. Bhargava And Ors. vs Trackparts Of India Ltd. And Ors. on 30 November, 1999
The collective holding of three groups of 76 per cent. shares also signifies the understanding among the three promoters that they should have absolute control of the entire affairs of the company notwithstanding the outside shareholding. However, we also note without dispute by the respondents, the submissions of the petitioners that most of the outside shareholders are relatives of Ahujas'. Further, this Board has held in K.N. Bhargava v. Trackparts of India Ltd. [2000] 36 CLA 291 (CLB) ; [2001] 104 Comp Cas 611 that if the facts and circumstances of a case reveal that a company is in the nature of partnership, holding of shares by outsiders would not affect the application of partnership principles. As a matter of fact, in that case the company was a listed company, but this Board held that company was a family company attracting the principles of partnership and this decision was upheld by the Allahabad High Court.