HARDEV SINGH AKOI & ORS Vs. RAI BAHADUR NARAIN SINGH SUGAR MILL LTD & ORS; ANDREA AFTAB PAURO & ORS
LAWS(NCLT)-2016-9-18
NATIONAL COMPANY LAW TRIBUNAL
Decided on September 21,2016

HARDEV SINGH AKOI AND ORS Appellant
VERSUS
RAI BAHADUR NARAIN SINGH SUGAR MILL LTD AND ORS Respondents


Referred Judgements :-

SANGRAMSINH P GAEKWAD VS. SHANTADEVI P GEAKWAD [REFERRED TO]
PALGHAT EXPORTS P LTD VS. CHANDRAN [REFERRED TO]


JUDGEMENT

- (1.)The present petition has been filed by majority shareholders holding 52.56% shares in the company, for the alleged acts of oppression and mismanagement by Respondents Nos.l to 8 who hold 40.73% share in the company, leading to a deadlock in the company. The following reliefs have been sought u/s 397 & 398 r/w Sec. 402 of the Companies Act, 1956:
(a) Director the Respondents No. 1 to 8/minority shareholders not to withhold their consent in passing of Agenda/decisions at Board Meetings/AGM's, taken in the interest of the Company by the Majority Shareholders Alternatively

(b) Direct the Respondent Nos. 1 to 8/minority shareholders to sell their shareholding to the petitioners/majority shareholders at such fair price as determined by this Hon'ble Board.

(c) Direct appointment of an independent valuer/auditor/accounts(s) to make a valuation of the shares of Respondent Company.

(d) Any other or such other relief/directions as this Hon'ble Board may deem fit and proper in the facts and circumstances of the present case.

(2.)Brief facts relevant to decide the controversy raised in the present company petition are that M/s Rai Bahadur Narain Singh Sugar Mills Ltd. (Respondent No. 9) was incorporated on 25th November, 1932 under the Indian Companies Act, 1913 with its registered office at 2, Kasturba Gandhi Marg, New Delhi. It is stated that the company was running its sugar mill until the year 1970. In 1970, the company suffered huge losses and in the year 1977-1978, the company was declared a sick industrial unit and was taken over by the Central Government under the Sugar Undertaking (Taking over of Management) Act 1978. Subsequently in the year 1986, the Central Government handed over the management of the company to the shareholders' management and the cumulative loss of Rs. 6.93Crores was converted into long-term loan to be repaid by the company to the Government over a period of 20 years. Since then, the operation of the company is being looked after by its Chairman cum Managing Director and the Board of Directors. The management have increased the crushing capacity of the sugar mill from 1800 TCD in the year 1986 to 8500 TCD in the year 2008. The company has also a power generation plant with a generating capacity of electricity for 30 MW. The company has also set up a distillery with a capacity of 60 KLPD by suitably amending the main object clause of Memorandum of Association of the company and duly registering the altered Memorandum of Association with Registrar of Companies in November, 2001. It has been emphasized that power generation and distillery are ancillary to the operation of the sugar mill and helps to utilize and add value to the by-product of the sugar mill.
(3.)Respondent No. 9 company is a closely held family company where petitioner No. 1, S. Hardev Singh Akoi and his family possess 32.30% shares. The brother of the petitioner, S. Jasdev Singh Akoi, Respondent No.3 and his family possess 32% of shares in the company. The sister of the petitioner, Bibi Alape Kaur, Respondent No. 7 and her family possess 8.73% of shares. The present petition has been filed by majority shareholders holding 52.56% shares in the company with a complaint of acts of oppression and mismanagement allegedly leading to a deadlock in the company by Respondents No. 1 to 8. These respondents No.l to 8 in total hold 40.73% shares in the company.
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