Kirpal, J. - (1.) These appeals by special leave arise from the common order of the Company Law Board (respondent No. 1) which had partly upheld the decision of Bajaj Tempo limited (respondent No. 2) in declining to register the transfer of its shares in favour of M/s. Bajaj Auto Limited which had been purchased by the appellants. These are essentially two groups of shareholders which control these companies. While Bajaj Group has the control of the appellant it is 'Firodia Group' which controls Bajaj Tempo Ltd.
(2.) Bajaj Auto Limited (appellant in Civil Appeal No. 3480/86) is the holding company of Bajaj Auto Holdings Limited (appellant in C.A. Nos. 3480/86 and 3420-79/86) and they, along with other individuals who were members of their group (all of whom are appellants in these appeals) are existing share-holders of Bajaj Tempo Limited which is a public limited company. Bajaj Auto Limited purchased 50 shares of Bajaj Tempo Limited and Bajaj Auto Holdings Limited purchased 13150 shares of the said company. These purchases were made in the year 1983 through different brokers and they were sent to M/s. Bajaj Tempo Limited for transfer of shares in the appellants' names. By three different resolutions dated 29-8-1983, 27-9-1983 and 19-11-1983, the transfer of shares was rejected by Bajaj Tempo Limited. The minutes of the meeting dated 29-8-1983 contained the reasons for refusal to transfer and the resolution passed thereto. The relevant portion of the said minutes is as under: "The Directors, therefore, after due deliberation and considering all aspects unanimously resolved not to approve the said transfers and declined to register the said transfers considerding the facts briefly stated above and ground briefly summarised as under: (1) Further acquisition of shares of this Company by Bajaj Group if permitted will lead to interconnection between this Company and the Companies of the Bajaj Group which is not desirable in the interest of this Company. (2) The Bajaj Group is not acquiring the shares of this Company with a view to or for the purpose of genuine investments but with ulterior and oblique motives and purposes including with a view to destablise the management of the Company. (3) Bajaj Auto Limited and this Company are competitors in business inasmuch as both the manufacturing Light Commercial Vehicles. The attempt of Bajaj Group to make inroads in this Company by acquiring large block of shares is to cause detriment and prejudice to the company. (4) In view of the facts stated above although absolute discretion is conferred under Articles of Association of the Company, the Board has carefully considered the matter and has decided to refuse to register the transfers. The Transferees in the circumstances are also not desirable persons from the larger point of view of the interest of Bajaj Tempo Ltd., as a whole. Therefore, the proposed transfers are not in the interest of the Company. "RESOLVED that in pursuance of Article No. 52 of the Articles of Association of the Company, the transfer of shares submitted of this meeting and herein below mentioned be and are hereby not approved and the Board of Directors do decline to register the said transfers and the Secretary to give to the parties notice of this decision refusing the said transfers in the following terms: "I have to advise that in the meeting of the Board of Directors held on 29th August, 1983 the Board has decided that it will not give its approval to the transfer of the following shares. The transfer forms and share certificates are being returned under a separate cover."
(3.) It is for the same reason as above that the other transfers were declined by the Resolutions dated 27-9-1983 and 19-11-1983.;