A. Bandopadhyay - (1.) IN this order, I am considering C.A. No. 106 of 2013 in connection with main C.P. No. 29 of 2013 moved under sections 397, 398, 399 and 403 of the Companies Act, 1956 ("the Act"). The brief averments and the challenges made in the application are as under: (a) The petitioners have obtained an ex parte ad interim order passed by the hon'ble Board on February 14, 2013, which is liable to be vacated and/or set aside, inter alia, for the following reasons: (i) The copy of the aforesaid ex parte order was made available to the petitioners' advocate by the Bench Officer of the hon'ble Board under the cover of a letter dated February 21, 2013. The petitioners have acted in breach of the direction passed by the hon'ble Board whereby the petitioners were under an obligation not only to. serve a copy of the order, but also to serve a copy of the main petition with enclosures which is mandatory under the provisions of Order 39, rule 3 of the Code of Civil Procedure, 1908. But, the petitioner through their advocate had only caused to serve a copy of the ex parte order on February 21, 2013. (ii) The main petition filed by the petitioners is not maintainable and contain erroneous facts. Even otherwise the main petition is not in the proper form and cannot be cured by seeking to use a supplementary affidavit in a manner in which it has been done. The filing of the supplementary affidavit cannot cure the inherent defects which are contained in the main petition. (iii) As per the ex parte order/there is a direction to the parties to maintain status quo as regards the shareholding of the company and such directions are contrary to the provisions of the Act as well as the articles of association of the company. As per the articles of association of the corn -pan)', there is no bar upon any member or shareholder from transferring his and/or her shares to any person and in this regard reference has been invited to article 7 of the articles of association of the company. (iv) Similarly, the ex parte order dated February 14, 2013, directing non -alienation of the immovable property of the company has also been obtained by the petitioners by misleading the hon'ble Board and by suppressing material facts. To be specific, vide letter dated December 18, 2012, the Block Development Officer (B.D.O.) of the Government of Tripura requested the company to donate one acre of abandoned land of Mahabir Tea Garden which was required urgently by the Government of Tripura for fulfillment of the development plan of Durga Chowmuhuni sub -block which was recently set up adjacent to Mahabir Tea Garden. Upon receipt of the said communication dated December 18, 2012, the general manager of the tea garden informed the managing director that a proposal has been received from the office of the B.D.O. and the said officer has offered on reciprocal basis to make new bridge and/or culvert near Mahabir Tea Factory at Mahabir Gram Panchayat for which an expected amount of Rs. 44 lakhs would be incurred by the Government of Tripura for the benefit of the company at no cost to be either paid or reimbursed by the company at any point of time. It has been further stated that Mahabir Tea Factory had a perennial problem during the rainy season in respect of the old bridge which was causing recurring expenditure to be borne by the company and as a result, the said bridge could not be used during the rainy season for which the functioning of the tea garden was also affected. For the construction of the proposed bridge and culvert, the Government of Tripura has already issued a work order in writing intending contractors to undertake the said work. Having regard to the above facts, the board of directors of the company at its meeting held on January 30, 2013, resolved and decided to give the said one acre of abandoned land to the B.D.O., Government of Tripura. (v) Petitioner No. 1 did not attend the aforesaid board meeting on January 30, 2013. However, the petitioner has made out a false story in the petition that he was forcefully prevented to attend the venue of the board meeting on January 30, 2013. In fact, the board meeting was scheduled to be held oh the fourth floor of P -36, India Exchange Place which is the registered office of the company and being a commercial building, the gate of such office remains opened from 5 a.m. to 10 p.m. and none could have been obstructed or prevented to enter a public commercial building having common lift and common stair case which always remain open and thus, the whole idea of issuing a letter dated January 29, 2013, by the petitioner as indicated at page 91 of the petition showing intention to attend the board meeting is for an ulterior purpose and a premeditated plan to formulate a story for approaching the hon'ble Board. (vi) The construction of the culvert and/or bridge sought to be made by the Government of Tripura is extremely beneficial to the company and the Government of Tripura has issued a work order for the said construction and the Government has already commenced such construction of the culvert inside the Mahabir Tea Garden on faith and expectation that the company would donate said abandoned one acre of land. However, the ex parte order of injunction obtained by the petitioners will prevent the company to discharge its obligation towards the Government of Tripura. This would also affect the smooth working of the tea garden. (b) Having regard to the above facts and circumstances of the case, the applicants have submitted that the ex parte ad interim order dated February 14, 2013, ought to be recalled and/or set aside as the same is causing serious prejudice to the company, its shareholders, employees, workers and all concerns. It has also been prayed that C.P. No. 29 of 2013 be dismissed as not maintainable or immediate stay of further proceedings in C.P. No. 29 of 2013 be granted till disposal of the instant application. As against the above, the main averments made by the petitioners in the reply affidavit are indicated as under: (i) The petitioners happened to be members of the Choudhury family who are all shareholders in respondent No. 1 company and petitioner No. 1 is also a director in the said company. At all material times the said Choudhury family were pioneers of tea business and engaged in the business of managing and selling tea and leasing out plantation in and around the State of West Bengal since last three generations. Shri Brojendra Narayan Choudhury being the patriarch of the family founded respondent No. 1 company and the company is a closely held family business and the shareholders are all family members. (ii) Respondent No. 1 is a private limited company having its registered office at P -36, India Exchange Place, 4th floor, Room No. 66 -A, Kolkata -700 001. Respondent No'. 2 is the managing director of respondent No. 1 company and respondent No. 3 is the chairman -cum -director of respondent No. 1 company. (iii) It was agreed and understood by and between all branches of Choudhury family that the respective branches would at all material times manage, administer and control the affairs of the respondent -company and no outsider would be allowed to be a member of the said company. Further, it has been agreed that each branch of the family being shareholders of the company would have an equitable right of purchase of shares of the other branch in case any of the branches wanted to sell their shareholdings in order to maintain quasi partnership nature of business carried on by the "Choudhuries" through respondent No. 1 company''. Such restrictions are implied as per articles 2(b) to (d) and 7 of the articles of association of the respondent -company. (iv) The company holds asset in the form of cultivable land measuring 430 hectors which is equivalent to about 1,060 acres in Tripura and the company has been doing considerably well owing to the availability of such huge landed area. Respondent No. 2 has caused mismanagement of the company by non -utilisation of almost 50 percent, of the land holding owned by the company meant for tea plantation and as a result, the yield per hector of tea from the land holding of the company has reduced substantially causing huge loss of projected profit/income on the part of the company. (v) It seems that on December 18, 2012, the B.D.O., Durga Chow -muhuni Sub -block, Dhalai, Tripura, issued a notice requesting the company to donate one acre of land to the Government for the project. Respondent No. 2 caused to send letters to all the directors calling upon a board meeting on January 30, 2013, wherein the agenda of the board meeting was to consider the donation of one acre of land. The petitioners strongly objected to such donation vide their letter dated January 29, 2013, but surprisingly the respondents had already cleared and cut off plants from one acre of land as a predetermined motive to donate it and the purported board meeting convened on January 30, 2013, was a mere formality and does not reflect the decision or opinion of other directors and shareholders of the said company, more so because, the company was being run on a quasi partnership principle. (vi) The petitioners have denied and disputed that they did not serve the copy of the interim order or the copy of the petition within time because of any ulterior motive on the part of the petitioners. Similarly, it has also been denied that the petition is defective to the extent of the same being cured by a supplementary affidavit as otherwise such petition was liable to be dismissed as alleged by the respondents. (vii) As per article 7 of the articles of association of the company, a share may be transferred by a member or other persons entitled to transfer to any person approved by the board of directors. It is in gross violation of the existing branches of the shareholders that the shares of the company have been transferred to outsiders without informing the other branches of the Choudhury family or offering them to buy out the shares intended to be transferred. Therefore, it has been disputed that the petitioners have in any way misled the hon'ble Board in obtaining the order of status quo as regards share capital vide order dated February 14, 2013, as alleged or at all. Similarly, it has been disputed that the order of the hon'ble Board directing non -alienation of property has been obtained by suppression of material facts, as alleged or at all. (viii) It has been further denied and disputed that the Government of Tripura has offered to construct any sort of bridge or culvert as a good gesture on reciprocal basis in lieu of donation of one acre of land. It has been also stated that by donating the land to the Government of Tripura without any consideration, the company will not benefit in any way and it was an urgent necessity that an unanimous approval for the same was required for indulging in such charity. (ix) It has been denied and disputed that the petitioners had no intention to attend the purported board meeting held on January 30, 2013 and that the petitioners had made out a false story of being forcefully prevented from entering the premises of the registered office of the company to attend the meeting. (x) Lastly, it has been submitted that the ad interim order granted by the hon'ble Board is not causing any sort of prejudice either to the company or its shareholders, employees, workers or any other persons concerned and on the contrary, the said order is safe guarding the interest of the company and its shareholders and so, it has been urged that the instant application should be dismissed with exemplary cost in favour of the petitioners.
(2.) IN response to the above averments made by the petitioners in the rejoinder affidavit, the respondents/applicants have submitted briefly as under: (i) As against the contentions of the petitioners claiming themselves to be members of so -called Choudhury family, it has been submitted that the original patriarch of "Choudhuries" is one Brojonath Choudhury and petitioners Nos. 1, 3 and 4 are his 5th generation descendants, whereas petitioner No. 2 is an outsider married into the family. Further, none of the petitioners are even direct descendants of signatories to the original memorandum of association dated February 17, 1957, being sons of Shri Brojendra Narayan Choudhury. (ii) It has been denied and disputed that all the branches of the "Choudhury family" had any active say in the management of key decisions of the company. In fact, there was no commonality of interest amongst the petitioners because they have engaged themselves in different fields. (iii) It has also been denied and disputed that it would be respective branches of Choudhury who at all material times would manage, administer or control the affairs of the company or that no outsider would be allowed to become member of the said Choudhuries. There is no such purported agreement on record nor the petitioners have been able to demonstrate the same. It has also been disputed that it was agreed upon that each branch of the family would have an equitable right to purchase the shares of other branches in the manner as suggested and in case, any of the branches want to sell their shareholdings, it was necessary for such branch to approach other branch to maintain the purported quasi partnership principle of business, said to have been carried out by the Choudhuries through respondent No. 1 company. It has also been denied that any restriction on transfer of shareholding can be implied from articles 2(b) to (d) and/or article 7 of the articles of association of the company. It has been stated further that the patriarch of the family, viz., Brojendra Narayan Choudhury was never a shareholder of the company and was not involved in the management of the company. None of his brothers were also involved in running of the company and only Arabinda Choudhury was the first managing director from February 17, 1956, till his retirement on April 17,1968. Petitioners Nos. 2 to 4 together only hold about 8 percent. shares in the company. Respondent No. 2 was appointed as managing director vide board meeting dated October 26, 2000 and he has been employed in the company for the last 18 years and he is seriously interested in the affairs of the company. Similarly, respondent No. 3 has been the director of the company for the last 44 years. (iv) It has been denied that respondent No. 2 has caused mismanagement or oppression in the affairs of the company by way of non -utilisation of almost 50 percent, of the land holding owned by the company, as alleged or at all. In fact, after respondent No. 2 took charge as managing director, the area under cultivation, of tea has increased steadily and has become approximately 245.13 hector in 2012. Additionally, 54.64 hectors were rejuvenated by filling in or inter plantation from 2001 to 2009. Further, the company has always declared dividend commensurate with the quantum of available surplus and the earning per share of the company has significantly improved from (Rs. 10.79) in 2002 -03 to Rs. 8.56 in 2011 -12. (v) It has been denied and disputed that the said one acre of land which has been sought to be donated is not abandoned or the respondents have cleared out and cut off plants from one acre predetermined land as a motive to donate the rand or that the meeting which was convened was a mere formality or that the same does not reflect the decision or opinion of other directors and shareholders of the company. Based on the above facts, it has been submitted that the allegations contained in the reply affidavit of the petitioners are vague, unmeritorious and misreading and the petitioners have not been able to make out any ground which could warrant rejection of the prayers sought for in the vacating application. Therefore, it has been requested that the instant application be allowed for the ends of justice and to prevent multiplicity of judicial proceedings.
(3.) IN course of the hearing of the instant application being C.A. No. 106 of 2013, learned counsel of the respondents had filed an affidavit affirmed on July 11, 2013, by respondents Nos. 2 and 3 wherein copies of written letters of consent of 17 equity shareholders of the company for donation of one acre of abandoned land to the Government of Tripura for Durga Chow -muhuni Sub -block as per request of B.D.O. in lieu of construction of box culvert near Mahabir Tea Factory have been enclosed. The said shareholders hold 69,100 equity shares in the company constituting 69.1 percent, of the share capital of the company.;