Altamas Kabir, J. - (1.)DANKHA Devi Agarwal (since deceased) is the appellant in Civil Appeal No.1015/2000. She was the mother of Bhagirath Agarwal (respondent No.2 in the appeal) and Smt. Leela Agarwal (respondent No.3) is the wife of the respondent No.2. Tara Properties Private Limited and three others are the appellants in Civil Appeal No.6535/2004. It may be mentioned that the appellant in this appeal is the respondent No.1 in the earlier appeal and respondent No.1 in this appeal is also the respondent No.2. in the earlier appeal and the other parties are common.
(2.)SINCE the two appeals arise out of the same set of facts between the same parties, they have been taken up together for hearing and disposal and are being disposed of by this common judgment.
Tara Properties Private Limited (hereinafter referred to as 'the Company') was incorporated on 28th December, 1962, as a family company with Tara Chand Agarwal (since deceased), Dankha Devi Agarwal, his wife (since deceased), their elder son, Bhagirath Agarwal and younger son Chandra Prakash Agarwal. Each of them was allotted 10 shares each in the newly-formed company. On 2nd March, 1963 Dankha Devi Agarwal granted a lease of the land at 13, Camac Street, Calcutta, to the Company and in lieu of premium of Rs.3 lakhs, 3000 shares of the Company were allotted in favour of Dankha Devi Agarwal. By virtue of such allotment, Dankha Devi Agarwal came to hold 3010 shares and the rest continued to hold 10 shares each. All the share holders were indicated as the first Directors of the Company. On account of transfer of shares by Dankha Devi Agarwal during her life time, the share holding pattern as on 28th June, 1977, was as follows:- JUDGEMENT_168_TLPRE0_2006Html1.htm

The aforesaid share-holding will indicate that the company was a family company. As will appear from the materials on record, Tara Chand Agarwal moved to New Delhi in 1978 along with his wife and younger son leaving the family company in the sole charge of his elder son Bhagirath Agarwal. Subsequently, the family returned to Calcutta and from a public notice issued by the Calcutta Municipal Corporation on 25th September, 1989, in the Calcutta Edition of the Daily Statesman, it came to light that the tax liability of the company in so far as the property leased to the company was concerned was to the tune of Rs.23,06,748/- which was outstanding. On coming to learn of the said outstanding dues, a meeting of the Directors of the company was convened by Tara Chand Agarwal where the agenda was for production of relevant records by Bhagirath Agarwal for the inspection of the other Directors. However, as the records were not produced by Bhagirath Agarwal on the plea that the same had been misplaced, Tara Chand Agarwal caused an investigation to be made by a Chartered Accountant from whose report it transpired that on or about 17th May, 1983 out of the share holding of 1660 shares held by Dankha Devi Agarwal, 1150 shares were purported to have been transferred by her to Bhagirath Agarwal and a further 500 shares were purported to have been transferred in favour of his wife. By the said process, Bhagirath Agarwal and his wife increased their share holding from 10 to 1410 and from 200 to 700 respectively while reducing the share holding of late Dankha Devi Agarwal from 1660 shares to only 10 shares.

(3.)ON discovery of the aforesaid facts and other irregularities alleged to have been committed by Bhagirath Agarwal, the Board of Directors decided to issue a balance of 1960 equity shares out of the authorized share capital which had remained unsubscribed at the meeting of the Board of Directors held on 20th October, 1989. The Company decided to allot 1500 shares out of the said 1960 equity shares to Tara Chand Agarwal and to allot the remaining 450 shares to his younger son, Chandra Prakash Agarwal.
On 24th October, 1989, a special notice was given for calling an extra-ordinary general meeting. A copy of the said notice was duly served on Bhagirath Agarwal, and a copy was also sent to the Registrar of Companies. Despite receipt of notice, Bhagirath Agarwal did not attend the meeting and the Board of Directors took a Resolution to remove both Bhagirath Agarwal and Smt. Leela Agarwal from the Directorship of the company. The decision of the Board of Directors was conveyed to the Registrar of Companies and the requisite forms were also deposited with him.