RANJAN GOGOI,J. - (1.) Both the appeals being against the common judgment and order of the High Court of Calcutta dated 14th September, 2005 were heard together and are being dealt with by this common order.
(2.) The appellant in Civil Appeal No. 589 of 2010 is a private limited company incorporated in the year 1948 with its registered office at Calcutta. The appellants 2 to 5 (hereinafter referred to as the 'Gupta Group') had come into control of the company by actions and omissions complained of by respondents 1 to 7 in the said appeal i.e. C.A. No.589 of 2010 which had led to the institution of the company petition under Section 397/398 of the Companies Act, 1956 (hereinafter referred to as the 'Act'). The said respondents may be conveniently referred to as the "Sanwalka Group".
(3.) At the time of its incorporation, the authorised capital of the company was Rs. 10 lakh consisting of 4,000 redeemable cumulative preference shares of Rs. 100/- each and 6,000 ordinary shares of Rs. 100/- each. The paid-up capital of the company before the issue of new, ordinary and bonus shares, which is the bone of contention between the parties, consisted of 4132 partly paid ordinary shares and 1868 fully paid ordinary shares besides 3065 fully paid preference shares. One M/s. Gupta Brothers originally held the 4132 partly paid shares. The said shares were forfeited sometime in the year 1966 and thereafter the same were issued to the Sanwalka Group who paid a total of Rs.45 for each share consisting of payment at the time of application and allotment and Rs.10/- per share on a call being made subsequently. Whereas, according to Gupta Group, these shares were held by the Sanwalka Group on behalf of Gupta Brothers, the said fact is denied by the Sanwalka Group. According to the Sanwalka Group, the Gupta Group without notice to them had increased the authorized capital of the company to Rs. 5 crores in an Extra Ordinary General Meeting of the Company held on 5.7.1994. No notice of the said meeting was given to the Sanwalka Goup. A Board Meeting was held on the same day i.e. 5.7.1994 to give effect to the above decision taken in the E.O.G.M. to increase the share capital of the company. In the said Board meeting, a follow up decision was taken to allot bonus shares at the ratio of 60 bonus shares for every fully paid up preference and equity share held. The said bonus shares were to be issued against revaluation of the industrial plot in Okhla Industrial Area, New Delhi which was the only asset of the company at that time. This was not contemplated by the Articles of Association of the Company, according to the Sanwalka Group. In any case, no bonus shares were allotted to them. Further more, according to the Sanwalka Group, pursuant to the decision taken on 5.7.1994, in August, 1995 the company issued 3065 equity shares to the holders of the preference shares (Gupta Group). In February, 1996, 25,000 ordinary equity shares were again issued to the members of the Gupta Group against which Rs.40 per share was paid. The said issue was ostensibly to raise additional capital for the company. This allotment was, however, to the exclusion of the Sanwalka Group. Contending that the aforesaid acts had the effect of reducing the Sanwalka Group, which was otherwise in the majority, to a negligible minority in the company, the company petition alleging oppression was filed before the Company Law Board wherein the act of removing two members of the Sanwalka Group from the Board of Directors (w.e.f.1.7.1991) and inducting two others of the Gupta Group in their place was also called into question.;