NAMITA GUPTA Vs. SURMA VALLEY STOCK LTD

JUDGEMENT

(1.) THE petitioners claiming to hold over 10 per cent shares in Surma Valley Stock Ltd. ('the company') have filed this petition under Section 397/398 of the Companies Act, 1956 ('the Act") alleging oppression and mismanagement in the affairs of the company. THE main grievance in the petition are that the respondents 2 to 7 have acted against the interest of the company by allowing transfer of 2000 shares held by the 9th petitioner in the company and also by making payment of unpaid amount of Rs. 40 which was unpaid and uncalled up on 400 shares held by the company in the 9th petitioner. Consequently, they have sought for a declaration that the transfer of 2000 shares held by the 9th petitioner in the company is illegal and null and void and also for a declaration that the paid up value of the 400 shares held by the company in the 9th petitioner is only Rs. 10 for restraining the respondents from transferring the 400 shares held by the company in the 9th petitioner, restraining the company from effecting further transfer of the 2000 shares held by the petitioner and restraining the company from convening any general meeting of the company without rectifying the accounts of the company.

(2.) Shri Sarkar, senior advocate appearing for the petitioners submitted : The petitioners had earlier filed a petition CP No. 8 of 1998 in respect of the affairs of the 9th petitioner. By an order dated 4-4-2000, this Bench had declared that members of the petitioners' groups had been elected as directors of the 9th petitioner in the EOGM held on 29-11 -1999. This order was challenged by the respondents before the Gauhati High Court which by an order dated 5-5-2000 directed maintenance of status quo as on that date. However, the respondents in their capacity as directors of the 9th petitioner had taken various decisions detrimental to the interest of the company and also the shareholders of the company as well as the 9th petitioner only with the sole object of gaining absolute control of the 9th petitioner. The company held 400 partly paid shares in the 9th petitioner which were allotted as early as in 1936. The amount paid-up was Rs. 10 as against the face value of Rs. 50. This is practically the only asset of the company and it has no other business also. Since as per the articles of association of the 9th petitioner, the voting on shares was on the basis of the paid-up value, with a view to gain higher voting rights, the respondents 2 to 7 constituting the illegal Board of the 9th petitioner who incidentally control the Board of the company, have arranged to get all these 400 shares fully paid during the interregnum period between 28-11-1999 and 4-4-2000. It is notwithstanding the fact that in the order dated 1-6-1999, this Bench had specifically directed that the 9th petitioner should not increase its paid-up capital. Thus, the respondents have not only violated the order of this Bench but also have acted against the interest of the majority shareholders of the 9th petitioner.

(3.) SHRI Ganguly, senior advocate appearing for the respondents submitted : The petition is nothing but an abuse of process of the Bench. Both the issues raised in the petition have already been considered by this Bench on the application CA No. 184 of 2001 filed by the petitioners and this Bench had declined to pass any order on these issues and, therefore, the principles of res judicata would apply. On this proposition, he relied on Y.B. Patil v. Y.L. Palil [1976] 4 SCC 66, wherein it has been held that res judicata would apply at subsequent stage of the proceedings in respect of orders already considered final in the very same proceeding. Even otherwise, both the issues raised in the petition relate to the affairs of the 9th petitioner. Accordingly, he prayed for the dismissal of the petition.