A. Banerji, J. - (1.) This special appeal has been filed by M/s Swadeshi Polytex Ltd. against the decision dated March 2, 1983, by the learned company judge allowing company petition under Section 155 of the Companies Act, 1956, and directing the appellant (M/s. Swadeshi Polytex Ltd. hereinafter referred to as "the Polytex") to correct its register of members by deleting the names of the holders of the disputed 1,26,000 equity shares and in its place substitute the name of the New Bank of India, Kanpur (respondent No. 2), within a week and it was further directed that respondent No. 2 shall have voting right in respect of the aforesaid equity shares.
(2.) M/s. Swadeshi Polytex Ltd. is a company with its head office in Ghazia-bad engaged in the production of rayon and ancillary products. Its managing director is Sri Sita Ram Jaipuria. Swadeshi Cotton Mills, Kanpur, is one of the major shareholders of Polytex. Its managing director is Sri Raja Ram Jaipuria. There were two trusts, viz., A. M. Jaipuria Public Charitable Trust which was the owner of 1,00,000 equity shares of the Polytex. Another trust by the name of Jaidei Devi Anand Ram Jaipuria Public Charitable Trust was the owner of 26,000 shares of the Polytex. These opposite parties fell in arrears of income-tax and wealth-tax dues and the said shares were attached by the Tax Recovery Officer, Kanpur, opposite party No. 2, in the company petition, for the said arrears of taxes. These shares were sought to be acquired by Swadeshi Mining which is a holding company of M/s. Swadeshi Cotton Mills, Kanpur. Since the shareholding of Swadeshi Cotton Mills, Kanpur, in Polytex was more than 30 percent, Swadeshi Mining applied for approval of the Central Government for the acquisition of the aforementioned 1,26,000 equity shares. This application was made on March 12, 1981. Admittedly, the Central Government did not signify its refusal to grant the approval within a period of 60 days nor was any such order communicated to the Swadeshi Mining. However, in reply to a letter dated March 20, 1981, by the Swadeshi Mining making for an early approval, the Central Government sent a letter dated May 7, 1981, seeking information as to whether the shares had been sold by the Tax Recovery Officer by March 15, 1981, and, if not, whether any other date had been fixed and further sought the names of the trustees of the two trusts. Further information was sought whether the shares would be purchased at the market price prevailing at the stock exchange. This letter was signed by an under-secretary to the Government of India. The particulars asked for were immediately furnished. The shares were sold on June 30, 1981, by the Tax Recovery Officer in favour of Swadeshi Mining. One other feature which needs to be noticed is that the Swadeshi Mining placed the said shares as collateral security with the New Bank of India, petitioner No. 2, in respect of the bank guarantee facility for a sum of Rs. 21,98,000 and the share scrips were delivered to petitioner No. 2 by petitioner No. 1 (Swadeshi Mining). The three transfer deeds were duly filled in with the New Bank of India as transferee. On January 1, 1982, the New Bank of India lodged the said share transfer deeds and share certificates with the Polytex. By a letter dated February 20, 1982, the Polytex intimated the New Bank of India declining to register the said shares. The petitioners, thereupon, filed the present company petition under Section 155 of the Act before the learned company judge. On March 2, 1983, the company petition was allowed with certain directions mentioned at the outset.
(3.) The dispute in this case lies in a narrow compass and relates to the interpretation of the provisions of Sections 108A and 108E of the Companies Act, 1956 (hereinafter called " the Act ").;