J.L. Gupta, J. - (1.) ARE the Petitioners entitled to purchase the 15 lac equity shares held by the Union Of India on payment of the face value alongwith interest @ 18% per annum compounded six monthly minus the dividend already paid or are they liable to pay the price as given on the Stock Exchange and demanded by the Respondent? This is the short question that arises for consideration in this Writ petition. A few facts as relevant for the decision of this case may be briefly noticed.
(2.) ON January 15, 1992, a Financial Collaboration Agreement was executed between the Punjab Agro Industries Corporation Limited and Shri M.S. Bhinder and Associates. By this agreement, it was decided that a new company shall be got incorporated under the Companies Act, 1956. The company was to set up a plant for processing mushrooms. The authorised share capital of the new company was to be Rs. 11,50,00,000/ - divided into 1,15,00,000/ - equity shares of Rs. 10/ - each. The corporation was to have 26% of the total shares. The collaborator viz. M/s M.S. Bhinder and Associates were to have 25% shares. The public including the Financial Institutions were to have 49% shares. Various other provisions including those relating to a restriction on sale of shares were also made. In pursuance to the agreement, "M/S Agro Dutch Foods Limited" was incorporated as the new Company. It is the admitted position that 15 lacs shares were allotted to the Govt. of India.
(3.) ON February 14, 1995 the Governments of India in the Ministry of Food Processing Industries sent a communication to M/S Agro Dutch Foods Limited (hereinafter referred to as the company) that it would like to disinvest its equity of Rs. 150 lacs provided for the integrated White Button Mushroom 100% Export Oriented Project through M/s Punjab Agro Industries Corporation Ltd. Chandigarh as per the terms and in the manner "as has been agreed between M/S Punjab Agro Industries Corporation Ltd., Chandigarh and M/S M.S. Bhinder & Associates, Patiala vide agreement signed and entered into between the two parties on 15.1.1992." A copy of this letter has been produced as Annexure P.2 with the writ petition. In response to this letter, the Petitioners exercised their option "to buy 15,00,000 equity shares of Rs. 10/ - each held by the Ministry in the Agro Dutch Foods Limited on May 12, 1995 that is today." They asked the Government to convey the total amount to be paid by the collaborator. It was stated that "the payment shall be made in accordance with Clause 26 of the agreement." A copy of this letter is attached as Annexure P.3 with the Writ Petition. On July 27, 1995, the Government of India informed the Petitioners that they were "required to pay Rs. 2,02,82,192/ - less dividends, if any, to be received by the Ministry, to the Ministry on or before 12th June, 1995". It was further stated that in case, the Petitioners failed to pay "the above mentioned amount within the stipulated period", they will be required to pay "a further interest @18% per annum with half -yearly rests from the date 12.6.95 on which the price i.e. Rs. 2,02,82,192/ - less dividends, if any, was to be received by the Ministry in respect of the said shares." A copy of this letter has been produced as Annexure P.4 with the writ petition.;