S. Balasubramanian - (1.) THE main grievance on which this petition has been filed is that the petitioner has been denied of its rights under the Articles in relation to the management of the 1^st respondent company and on that basis various declarations have been sought to redress this grievance.
(2.) THE facts of the case are that the first respondent company, TCIL Bell South Limited (TBL) was incorporated in 1989 as a joint venture company between the petitioner (TCIL) which is a public sector company and M/S Bell South Inc (BSI). The petitioner holds 44.9% shares while BSI held 40% shares and the balance 15.1% shares are held by respondents 3 to 5. In 2002 BSI transferred its holding of 40% shares to the 2^nd respondent which is under the control of one Dr. Indu B. Singh. In terms of Article 128 of AOA, the President of the company who would be the chief executive, has to be the nominee of TCIL and accordingly its nominee had been the President all along. In terms of Article 127, the Chairman of TBL has to be the nominee of the 2^nd respondent. One Shri Sudhir Saxena being the nominee of TCIL was appointed as the CEO in July 2003 and he continued as such till 6.6.2005 when he resigned. In his place TCIL nominated one Shri A.K. Jolly, a Group General Manager of TCIL as CEO of TBL. However, he was not allowed to function as such after a few days. Aggrieved with this, TCIL filed a suit in a Delhi Court seeking for a direction to the company to allow Shri Jolly to function as CEO. However, no order was passed. In the meanwhile, the board of the company appointed one Dr. S.N. Singh as the acting CEQ with the powers to operate the bank accounts and Dr. Indu Singh was appointed as permanent Chairman. The company also changed the authorized signatories for bank operations. The petitioner complained to the bankers of TBL in this regard due to which the banks had stopped further bank operations. The company filed a writ petition before Delhi High Court and the High Court allowed Dr. S.N. Singh to operate the bank accounts. Aggrieved with this order, the petitioner got itself impleaded in the writ proceeding consequent to which by an order dated 29.7.2005, the High Court clarified that the operation of the bank accounts by Dr S.N. Singh would be, in the ordinary course of business. Thereafter, by another order dated 5.10.2005, the High Court left it to the discretion of the bank to decide which of the two contesting parties had the right to operate the bank account. The LPA filed by the company was dismissed by an order dated 27.10.2005. The company issued a notice dated 7.9.2005 to convene the 16^th AGM on 30.9.2005 to pass certain resolutions amending/deleting certain Articles. While according to the petitioners, there was no quorum to transact any business in the AGM, according to the respondents, all the businesses were transacted and all the resolutions as proposed were passed. When the petition was mentioned on 14.11.2005 and interim relief sought, I passed the following order "I have considered the matter carefully. The foundation for seeking the interim reliefs, which have also been incidentally sought for as final reliefs is based on Article 128 of Articles of Association. It is on record that the petitioner has already filed a civil suit claiming for the right to manage the affairs of the company in terms of Article 128 and the said civil suit is still pending. Likewise, the matter relating to bank operation is also pending before the High Court which has posted the matter for further hearing on 11.1.2006. Since both the issues are pending in other fora in proceedings instituted prior in time, to avoid conflict of decisions, I do not propose to consider the reliefs at this stage. However, since the petitioner has questioned the validity of the annual general meeting held on 30.9.2005 on the ground that there was no valid quorum and that the respondents 3 to 5 have also questioned the factum itself of holding of said meeting, I only direct that none of the resolutions passed in that alleged meeting which have so far not been implemented, shall be implemented till the petition is disposed of. Likewise the resolutions which have been implemented will be subject to final order in the petition. Earlier interim orders will continue".
(3.) THE above order was challenged on appeal by the petitioner in Delhi High Court, which, while setting aside the above order, directed that the bank accounts of the company would be jointly operated by the nominee of the petitioner and the 2^nd respondent and that the petitioner would send names of three persons for the appointment as President of the company to the 2^nd respondent who would give his concurrence for the appointment of one of them as the President and that CLB would appoint an independent Chairman for the next AGM. This order was taken on an appeal to the Supreme Court by the company. The Supreme Court passed the following order on 25.9.2006 "Though this matter was listed for admission, we have heard learned Counsel for the parties at length. It is stated by Mr. C.S. Vaidyanathan, leaned senior counsel for the respondents that the suit which was filed and to which reference was made by the Company Law Board is to be withdrawn and an application for that purpose has already been filed. In that view of the matter, we direct that Company Law Board shall take up the main matter which is stated to be listed tomorrow. If the main matter is disposed of early then there may not be any need for any interim arrangement. If for any reason, the hearing of the main petition is deferred then the Company Law Board shall make interim arrangement taking into account all relevant aspects uninfluenced by any observation made by the High Court in the impugned order. We make it clear that we have not said anything about the correctness of the conclusion. But because of the changed circumstances, it would be appropriate for the Company Law Board to take a fresh decision if necessity so arises. This order is being passed notwithstanding the fact that notice has not been issued to two opposite parties but because of the fact that the main matter is posted tomorrow. It goes without saying that in the interest of the parties the Company Law Board shall make an effort for early disposal of the main matter.... The special leave petition stands disposed of". Thereafter, the petition was heard on merits.;