MILAP CHANDRA, J. - (1.) THIS petition has been filed under Sections 397 and 398, Companies Act, 1956 (hereinafter to be called as 'the Act'), in the matter of Hindustan Processors Ltd., Bhilwara (in short 'the company'), with the allegations, in short, as follows : The company was incorporated on October 29, 1987, with nominal capital of Rs 50 lakhs divided into 5 lakhs shares of Rs. 10 each and paid -up capital of Rs. 36,60,500. Petitioner No. 1, his friends and relatives hold 1,33,500 equity shares and petitioner No. 2, his friends and relatives hold 67,500 equity shares of Rs. 10 each. Non -petitioners Nos. 1 and 2 agreed to finance the company on the basis of leasing Jaipur Metals and Electricals Ltd., Jaipur. The lease agreement was duly executed. It was agreed that the managing director of Jaipur Metals and Electricals Ltd. (non -petitioner No. 1) would be the chairman of the company, it would also have a right to nominate a certain number of directors and non -petitioner No. 1 asked the company to allot fully paid -up 55 per cent, shares of the company in favour of Ashok Kumar Doshi (non -petitioner No. 5). It was further agreed that petitioners Nos. 1 and 2 were to be the managing director and executive director of the company respectively. They got the plant and machinery approved and erected in a record time of five months and the production commenced from October 12, 1988. Non -petitioner No. 1 started interfering with the day -to -day working of the company and non -petitioner No. 5, A. K. Doshi, did not contribute any money and co -operate in the working of the company. The balance amount of Rs. 10 lakhs was also not released by non -petitioner No. 1 as per the lease agreement. Non -petitioner No. 1 started conspiring to oust the petitioners from the management of the company and ousted them on November 22, 1986. They were not allowed to attend the meetings. A committee comprising Sarvashri K. G. Toshniwal, K. K. Vijayvargiya and P. S. Chauhan was constituted for the management of the affairs of the company. The following prayer has been made in this petition : '1. Declaring annexure -21 to be wholly void, illegal and ineffective. 2. Declaring that the lease agreement, annexure III, so far as it contemplates respondent No. 2 to work as chairman of the company is illegal and void. 3. Declaring annexures 22, 23A to be of no avail as against the petitioners. 4. Declaring the so called meeting held by respondents Nos, 2, 3, 4, 6 and 7 on December 14, 1988, to be illegal, void and of no avail. 5. Restraining respondents Nos. 3, 4, 6 and 7 from interfering in any manner with the functioning of the petitioners as managing director and executive director of the company and managing the affairs of the company and further restraining them from doing any act in any manner on behalf of the company in any capacity whatever. 6. Such other appropriate order may kindly be passed which may adequately protect the company and the petitioners from illegal and unauthorised acts, atrocities and oppression of the non -petitioners, done in the guise of all or any of resolutions in the board meetings convened and held by them. 7. The respondents and/or nominee directors of respondent No. 1 be restrained from bringing about any change in the ownership of any shares of the company. 8. Appropriate action be taken or be directed to be taken against respondent No. 8 for his abovementioned illegal acts of wrongful interference in managing the affairs of the company. 9. Directing the restoration of status quo ante as it existed prior to annexure 21. 10. Such other order as may be deemed and fit and appropriate in the circumstances of the case may kindly be passed. 11. Costs of the petition be awarded.'
(2.) MR . Rajendra Mehta, advocate, entered caveat on behalf of non -petitioners Nos. 2, 3, 4, 6 and 7. A joint reply to the petition was filed by these non -petitioners. Shri U. N. Bhandari, advocate, also put his appearance suo motu for and on behalf of non -petitioner No. 1. Notice was issued to non -petitioner No. 8 only. Non -petitioners Nos. 1 and 8 have filed their separate replies. The non -petitioners have raised several preliminary objections against the maintainability of the petition in their replies. Arguments of learned counsel for the parties have been heard on the preliminary objections at length. I. Two remedies cannot be availed of simultaneously. - - Learned cpunsel for the non -petitioners contended that the petitioners have also tiled a petition, papers Nos. 351 to 419 (annexure R/1), under Sections 408 and 409 of the Act before the Company Law Board, Central Government, New Delhi, with the same allegations and making similar prayers ; it is still pending and this fact has been suppressed from this petition. They also contended that two remedies cannot simultaneously be invoked. They relied upon Hungerford Investment Trust Ltd. v. Turner Morrison and Co. Ltd. [1972] ILR 1 Cal 286 and Mohanlal Ganpatram v. Shri Sayaji Jubliee Cotton and Jute Mills Co. Ltd. [1964] 34 Comp Cas 777 ; AIR 1965 Guj 96. In reply, it has been contended by learned counsel for the petitioners that there is no express provision in the Act debarring the availing of two remedies simultaneously. He also contended that different remedies are contemplated under Sections 408 and 409 of the Act and these provisions are open to the director, managing director and managers only. The provisions of Sections 408 and 409 cannot be invoked by shareholders of the company.
(3.) IT is not denied that petition -papers Nos. 351 to 419 (annexure R/l) under Sections 408 and 409 of the Act were already filed before the Company Law Board, New Delhi, and it is still pending. The prayers made in it run as under : 'It is, therefore, most respectfully prayed that the Centra! Government may very kindly be pleased to consider the matter and the petitioners pray for grant of the following interim reliefs : 1. That the company and the petitioners may kindly be protected from the illegal and unauthorised acts and atrocities of the non -petitioners done and under stewardship of Shri Kevdia in the garb of illegal resolutions in the board meetings convened and held by them. 2. The nominee -directors of Jaipur Metals and Electricals Limited, Jaipur, may be restrained from bringing any change in the ownership of any shares in Hindustan Processors Limited, Bhilwara. 3. The nominee -directors of Jaipur Metals and Electricals Limited, Jaipur, may be restrained from bringing any change in the board of directors of Hindustan Processors Limited, Bhilwara. 4. No resolution passed in any of the board meetings held or convened by the non -petitioners should be given effect unless it is confirmed by the Central Government. 5. Any other order as may be deemed fit and proper by the Central Government so as to prevent the company from mismanagement and adopting any practice by any person or any member of the board prejudicial to the interest of the company or its shareholders may also very kindly be passed. Costs of the petition be awarded.' ;