- (1.) The Petitioner is a shareholder of the Patrakola Tea Company Limited. On or about the 2nd March, 1966, the petitioner received a letter dated the 21st February, 1966, from the firm of G.M. Pyne, who are brokers in the Calcutta Stock Exchange. The material portions of the letter are as follows :- "Under an agreement dated the 15th of August, 1964 made between Duncan Brothers and Company Limited and Munnalal Bhalotia and Company, the said Munnalal Bhalotia and Company agreed that they would within a period of not less than six months and not more than twelve months after the 31st of July, 1965, make an offer to purchase shares in the Patrakola Tea Company in the hands of the public at a price which works out at a little less than Rs. 132/- per share and on the basis that the offer should remain open for acceptance for a period of thirty days from the date of dispatch thereof. All acceptances to be completed within fifteen days of the receipt thereof. Your name appears on the Share register as the holder of 35 shares. We have accordingly been instructed by the said Munnalal Bhalotia and Company to make an offer to all shareholders of the company, which we hereby do, to acquire their shares at the price of Rs. 132/- per share on the above terms. If you wish to accept this offer in respect of the whole or part of your shareholding please arrange to tender to us through your brokers or bankers the Share Scrip with the relative Transfer Deeds duly executed in blank within the specified time. This offer is being made in order to comply with the above mentioned agreement. Business was last done in these shares on the 16th February, 1966 at the price of Rs. 172.75 per share." The petitioner prays in this application for an order that : (a) the circular issued by M/s. Munnalal Bhalotia and Company though M/s. G. M. Pyne is unauthorized, illegal, inoperative and void; (b) alternatively the price of the shares to be purchased by M/s. Munnalal Bhalotia and Company should be the break up value thereof (which the petitioner fixes at Rs.870/- per share) including the goodwill of the company; (c) the Managing Agency agreement of the company with M/s. Munnalal Bhalotia and Company is inoperative inasmuch as the resignation of M/s. Duncan Brothers and Company Limited has not been accepted by the Company and M/s. Duncan Brothers and Company Limited are still to be deemed to be the Managing Agents of the Company; (d) in the fact and context of the case an enquiry be directed into the affairs of the company; and (e) the annual general meeting of the company held on the 30th September, 1965, was unauthorized and contrary to law.
(2.) In the cause title of the petition reference has been made to Section 395 of the Companies Act 1956. The relevant portions of this section are as follows :- "Where a scheme or contract involving the transfer of shares in a company (in this section referred to as the 'transferor company') to another company (in this section referred to as the 'transferee company') has, within four months after the making of the offer in that behalf by the transferee company, been approved by the holders of not less than nine-tenths in value of the shares whose transfer is involved (other than shares already held at the date of the offer by, or by a nominee for the transferee company or its subsidiary), the transferee company, may at any time within two months after the expiry of the said four months, give notice in the prescribed manner to any dissenting shareholder, that it desires to acquire his shares; and when such a notice is given, the transferee company shall, unless on an application made by the dissenting shareholder within one month from the date on which the notice was given, the Court thinks fit to order otherwise, be entitled and bound to acquire those shares on the terms on which, under the scheme or contract, the shares of the approving shareholders are to be transferred to the transferee company . . . . . . . . . . .".
(3.) Mr. Chakravarti appearing for the petitioner submitted that on receipt of the said letter dated the 21st February, 1966, his client became apprehensive and made this application under Section 395 of the Act to prevent M/s. Munnalal Bhalotia and Company from acquiring his shares.;