Decided on December 30,1983



S.L.TALATI - (1.) This appeal is directed against the order passed by City Civil Court Judge on 29-12-1983 below Notice of Motion exh. 5 in Civil Suit No. 4511 of 1983. The short facts which gave rise to this appeal may be stated as under.
(2.) On 29-12-1983 Extra ordinary general meeting of the defendant -Company was called and in that meeting several resolutions were proposed to be passes and one of the resolutions was Resolution No. 3 On 22-12-1983 Civil Suit was filed and on that very day Notice of Motion was presented to the Court and an injunction was sought for by which the Court was asked to restrain the defendant from passing Resolution No. 3. Ad interim injunction was obtained on 22 which was served Oil the defendant-Company on 28-12-1983 and an affidavit-in reply was filed and the Notice of Motion was opposed. Ultimately after hearing both the sides the learned City Civil Court Judge passed an order and vacated the injunction which was already granted. Thereafter this appeal came to be filed in this Court
(3.) In the meantime as the stay was vacated the meeting was held and it is an admitted position that the resolution is passed. What is now being urged is that injunction may be given so that the defendant may not implement the resolution which is passed. I have heard the learned advocate Shri Mehta for the appellants and the learned Advocate General for the defendant at great length. It appears that Rohit Mills Limited is having a division known as R. M. Engineering Works. There is another private limited company which is known as Rajesh Malleables Pvt. Ltd. Now it is a subsidiary company fully owned by the defendant. The resolution which is under challenge is for the purpose of transferring the assets of R. M. Engineering Works to this subsidiary private limited company. Now the resolution which was proposed to be passed and which is now adopted reads as under: RESOLVED THAT pursuant to sec. 293(1) (a) and other applicable provisions if any of the Companies Act 1956 the consent of the Company be and is hereby accorded to the Board of Directors and assigning the entire Engineering Undertaking of the Company viz. R. M. Engineering Works to its wholly-owned subsidiary company Rajesh Malleables Pvt. Limited on and with effect from the. close of business on 30/12/1983 at or for a consideration equivalent to the aggregate of the written down value of fixed assets including lands and buildings plant and machinery dead stocks vehicles etc. computed in accordance with the method prescribed under the Income-tax Act 1961 cost of stock-in-trade and the book value of the current assets as reduced by the aggregate of all the loans current liabilities and provisions relating or attributable to the said R. M. Engineering Works and its business and operations as at the close of business on 30/12/1983 upon the terms and conditions set out in the Agreement to Sell proposed to be entered into with Rajesh Malleables Pvt. Ltd. a draft whereof is placed before the meeting and initialled by the Chairman for the purpose of identification. RESOLVED FURTHER THAT the Board of Directors be and is hereby authorised to sign and execute the said Agreement to Sell and to take and perform all such steps acts deeds matters and things as may be necessary desirable or expedient to give effect to this Resolution including entering into signing executing delivering all agreements assignments contracts deeds writings and instruments for and in the name of and on behalf of the Company.;

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