SUBHASH CHAND AGARWAL Vs. ASSOCIATED LIMESTONE LTD

JUDGEMENT

(1.) THIS petition filed in September, 1991, by Shri Subhas Chandra Aggarwal and Smt. Anju Aggarwal under Section 397/398 of the Companies Act, 1956 (hereinafter called "the Act"), against Associated Limestone Limited (hereinafter called "the company") complaining of oppression and mismanagement has a long and chequered history. It is appropriate to trace this history before coming to the merits of the petition.

(2.) After the initial hearings in December, 1991, January and February, 1992, an attempt was made at the instance of the Company Law Board for settlement of the dispute between the parties. In the month of March, 1992, it appears that there was a meeting of the concerned parties excepting the petitioner and respondent No. 3 but including respondent No. 2 at which there was an agreement to the effect that all allotments made by the company after it became public in July, 1985 (originally the company was incorporated as a private company) are not valid, and, therefore, a redistribution of such shares among the original shareholders was agreed upon. The Rajasthan State Mineral Development Corporation (RSMDC) which got allotment of about 50.4 per cent, of the shares after the company became public was also agreeable for reallotment of their shares and also suggested a settlement in the process as is evident from the communication from that institution. At the hearing held on April 7,1992, it appears from the records that a settlement was arrived at by which all allotments, after the company became public, in contravention of Section 81(1A) of the Act, are to be cancelled excepting the allotments made to RSMDC, respondent No. 3 and one Shri Rohit Bohra, director of the company. It was also agreed, inter alia, to redistribute the shares wrongfully allotted along with the shares allotted to RSMDC. Though it appears that no formal shape to this settlement was given, there is a reference to this settlement in the order of the Company Law Board dated June 4, 1992. It is also further recorded that the representative of respondent No. 2 withdrew his consent to the compromise and submitted alternative proposals which were not acceptable and compromise efforts failed. In view of this, the Company Law Board passed an interim order dated June 4, 1992, reconstituting the board of directors with immediate effect in order to make interim arrangement for conducting the affairs of the company. In this board, the petitioner, respondents Nos. 2 and 3, and the representatives of the RSMDC were appointed. It was also directed that these three parties will deposit equally the amount due to the RSMDC towards repurchase price of the shares along with the interest at the rate of 14 per cent, since the RSMDC desired to off-load their shareholding. In addition all share transfers and allotments after the filing of the petition were stayed. Ail-the above information is available in volume I as part of the pleadings.

(3.) AFTER the above final orders, the petitioners filed an affidavit dated May 1, 1995, being C. A. No. 126 of 1995 seeking issue of fresh directions to dispose of the matter since the Company Law Board had stayed the proceedings by an order dated October 22, 1992, in view of the pending appeal before the Rajasthan High Court.