Ashim Kumar Banerjee, J. - (1.) FORT Gloster Industries Ltd. (hereinafter referred to as the 'Fort Gloster') had two divisions; cable division and jute division. The company, although a public limited company, had scattered shareholding amongst the members of the public as well as financial institutions. Bangur family, a family of industrialists in the State, held the controlling block of shares. In 1992 the Board of Directors decided, for proper expansion and development, the cable division and jute division should have independent entities. They proposed a scheme of demerger. Accordingly, Fort Gloster retained the cable division and transferred the jute division to a new company named as Gloster Ltd. (hereinafter referred to as 'Gloster'). The jute division had two mills, North mill and New mill. Prior to its demerger in the year 1988 Fort Gloster entered into an agreement with Hooghly Mills Ltd. (hereinafter referred to as Hooghly), the owner of a neighboring jute mill to sell the North Mill along with vacant land attached thereto. The liability attached to the North Mill was also transferred to Hooghly. By the agreement of sale, the entire North Mill along with its assets and liabilities stood transferred to Hooghly. The physical possession was also handed over to Hooghly and since then they were carrying on business. As per the agreement for sale, the sale was subject to appropriate permission from governmental authorities. A sum of rupees One Lac was kept as outstanding to be paid at the time of execution of the conveyance. Hooghly paid the entire consideration, save and except a sum of rupees One Lac, to Fort Gloster in 1988 itself. Hence, in 1992 when the Board of Directors decided to divide the cable division and jute division, they did not consider the North Mill as we find from the records. We however, do not find any valuation report in the records to support the share exchange ratio. We are thus not sure as to whether the management took into consideration the North Mill at the time of demerger in 1992. The dispute arose between the members of the Bangur family as we are told, that did not have any direct link with the present litigation. After the overwhelming majority of the shareholders approved the scheme, this Court sanctioned it. The order of sanction was duly drawn up, completed and filed with the Registrar of Companies, West Bengal and the demerger attained finality. In the order as drawn up, the schedule appended to the order, did not take into account the North Mill. Be that as it may, after the demerger, both the companies were functioning under different heads of management. The sale was not also concluded in respect of North Mill in absence of permission from the Land Ceiling Authority. Hooghly subsequently transferred the jute mill to Bowreah Jute Mills Pvt. Ltd. (hereinafter referred to as Bowreah) (Appellant in Appeal No. 287 of 2012).
(2.) IN 2009, Gloster Ltd. filed an application with an innocuous prayer for correction of the drawn up order as according to them, since jute division stood transferred by demerger, the North Mill also came through such demerger, subject to the agreement for sale. Since sale was frustrated in absence of permission from the Land Ceiling Authority, it should retain with them. However, because of the mistake crept in the order so drawn up, it would need correction. Gloster also took the plea that the order was required to be drawn up as per Form No. 42 of Company Court Rules, 1959. While doing so, the portion as statutorily required to be incorporated "and all other the property, rights and powers of the transferor company" was omitted. Correcting the drawn up order should incorporate that. Prayer (a) of the Judge's summons is quoted below : The order dated 31 May 1993 in Company Petition no. 28 of 1993, as drawn by the Company Department be clarified and/or modified and/or rectified by directing that not only the assets and properties, rights and interests of the Jute Division. specified in Schedule B of the said order but also all other properties, rights and interests of the Jute Division including North Mill of the transferor to and vested, without any further act or deed, in the applicant company under Section 394 (2) of the Companies Act, 1956 but subject to all charges affecting the same.
(3.) FORT Gloster contested the said proceedings. Bowreah also intervened. Initially they were allowed to participate, however at the final hearing learned Judge found, they could not have any say in the matter. Learned Judge dismissed the application by holding that the North Mill was not in contemplation when the sanction was prayed for and granted. Gloster filed the appeal being A.P.O. No. 194 of 2012 without making Bowreah a party. Bowreah intervened. The Division Bench, while admitting the appeal, permitted Bowreah to make submission. However, at the time of hearing of the application, Gloster objected to their presence as according to them, the learned Judge had already held that they would not be entitled to hearing. Hence, they should not be heard. At that juncture, we granted leave to Bowreah to file independent appeal against the order of the learned Judge, holding that they were not necessary party in the proceeding. Pursuant to such leave, Bowreah filed Appeal No. 287 of 2012. RIVAL CONTENTIONS: Mr. Jishnu Saha, Learned Counsel appearing for Gloster opened the case placing the scheme. He referred to page -368 of the paper book to mention that in the Memorandum of Understanding between Shree Kumar Bangur and Benu Gopal Bangur both the Bangur groups agreed to divide the company on 50 -50 basis. He referred to clause -13 of the said Memorandum of Understanding to show that the land, if acquired by the Government from the areas allotted to any of the parties, would go from the areas of the respective parties and the compensation, if received, would automatically go to the concerned party who lost the land. It was agreed that Gloster having jute mill division would be responsible for execution of the conveyance in favour of Hooghly. Relying on such clause, Mr. Saha contended that the parties kept in mind the North Mill at the time of entering into agreement for partition of the family business. Hence, Gloster was entitled to get back the North Mill. In case any part of the said property was subsequently transferred to the Government by acquisition or vesting or otherwise, Gloster would be entitled to the benefit of compensation. In short, the rights and responsibilities in respect of North Mill would still remain with the jute division that stood transferred through demerger to Gloster and Gloster was entitled to have correction of the order as drawn up, while sanction of the scheme by this Court in 1992. S.K. KAPOOR :;