Sabyasachi Mukharji, J. - (1.) This appeal arises out of the orders passed and judgments delivered in several matters on August 21, 1981. The points involved are interesting and rather novel but these are not many. An order for sale of certain assets of Andhra Steel Corporation Ltd. has given rise to this appeal. Andhra Steel Corporation Ltd., hereinafter referred to as " the said company ", is controlled by the Mittal family. Sri B. C. Mittal was the grandfather of the present applicant/appellant. Sri B. C. Mittal had five sons, namely, Mohanlal Mittal, I. S. Mittal, D. L. Mittal, C. L. Mittal and R. K. Mittal. The wife of Sree B. C. Mittal had died some time back. Different members of the Mittal family held substantial blocks of shares in the said company. M. L. Mittal and his sons and daughters hold substantial shares but altogether they are in minority. On or about May 13, 1977, M. L. Mittal had made an application under Sections 397 and 398 of the Companies Act, 1956, being Company Petition No. 221 of 1977 complaining about alleged mismanagement of the affairs of the company by his four brothers, Sri B. C. Mittal was an old man and had died recently. He was bedridden after an attack of paralysis for a long time. It is the case of M. L. Mittal and his sons in the present applicants/appellants that he was also mentally infirm and was undergoing shock treatment. In the application made by M. L. Mittal under Sections 397 and 398 of the Companies Act, 1956, in order to make up 10% shareholding, the present appellants being sons and daughters of M. L. Mittal supported M. L. Mittal and their supporting affidavit was annexed to the main Section 397 and Section 398 application. These facts have to be borne in mind in order to consider one of the main contentions involved in this appeal.
(2.) In the application under Sections 397 and 398 of the Companies Act, Mohanlal Mittal had complained about mismanagement of the affairs of the company by his brothers, Indra Sen Mittal, Damodar Lal Mittal, Chaganlal Mittal and R. K. Mittal. In the said application, an order was passed on May 25, 1977, for convening an extraordinary general meeting of the company for the purpose of election of the directors under the chairmanship of Sri M.N. Sen, Barrister-at-Law. Au extraordinary general meeting was duly held. In the said election, six representatives from various financial institutions were unanimously elected as directors of the company and six other persons were elected on contest. Sri K. R. Gopivallabha Iyengar, a retired judge of the Karnataka High Court, was appointed chairman of the Committee of Management.
(3.) The learned trial judge had initially appointed a Committee of Management and after some proceedings, the matter went up before a Division Bench of this court and by au order dated July 26, 1977, the Division Bench, inter alia, ordered as follows : " THE COURT : The operation of the order passed by the learned trial judge will remain stayed and the following 10 persons who were declared to have been elected as directors by the learned trial judge and the other two persons named below, i.e., the following 12 persons, will, however, constitute the Committee of Management until further orders. ";