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Section 100, read with sections 101, 102 and 103 of Companie

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Court :
HIGH COURT OF CALCUTTA

Brief :

Citation :
Mahendra Papatlal Shah V Alfred Herbert (I) Ltd. BHASKAR BHATTACHARYA AND KISHORE KUMAR PRASAD, JJ. A CO. NO. 75 OF 2004, APO NO. 241 OF 2004 AND O. P. NO. 178 OF 2000

HIGH COURT OF CALCUTTA Mahendra Papatlal Shah V Alfred Herbert (I) Ltd. BHASKAR BHATTACHARYA AND KISHORE KUMAR PRASAD, JJ. A CO. NO. 75 OF 2004, APO NO. 241 OF 2004 AND O. P. NO. 178 OF 2000 March 19, 2007 Section 100, read with sections 101, 102 and 103 of Companies Act, 1956 - Share capital - Reduction of - On 31-1-2000, board of directors of AHIL and AHL duly approved scheme of arrangement, reconstruction, and consequent reduction of capital and necessary board resolution was passed - An intimation was also sent to Bombay Stock Exchange and Calcutta Stock Exchange - On 10-5-2000, Single Judge passed an order sanctioning said scheme of arrangement after Central Government gave its ‘no-objection’ for sanctioning of said scheme - Thereafter, certain requirement of Act were complied with such as sending intimation to stock exchange, giving effect to scheme in balance sheet, filing of annual returns with Registrar of Companies on basis of sanctioned scheme etc., - However, at that time appellant did not raise any objection to same - In December 2000, appellant filed a title suit against AHIL in Small Causes court praying for decree of eviction directing AHIL to quit, vacate and deliver peaceful possession of certain premises - Subsequently, appellant filed company application for recalling order of reduction of share capital passed by Single Judge alleging that companies, who were his tenants, for purpose of availing of benefit of amendment of rent control legislation of State, deliberately reduced share capital - It was further contended that while making reduction of share capital provisions of sections 100 to 103 were not complied with - Single Judge rejected application - On instant appeal, it was seen that appellant even encashed dividend warrants issued on reduced share capital and at same time, in pending suit for eviction, they came to know existence of impugned order passed by Single Judge when specific notice was served upon him - It was further seen from material on record that all requirements of reduction of share capital had been complied with - Whether, in aforesaid circumstances, proceeding for framing of scheme in question could not be said to be tainted with malafide intention - Held, yes - Whether, therefore, instant appeal was to be dismissed - Held, yes FACTS On 31-1-2000, the board of directors of AHIL and AHL duly approved the scheme of arrangement, reconstruction, and consequent reduction of share capital and necessary board resolution was passed. An intimation was also sent to the Bombay Stock Exchange and the Calcutta Stock Exchange. Pursuant to the order of the single judge the notices were issued by the chairman of the respective meeting for convening of the meeting of the shareholders and advertisements were duly published for the said meeting. Meeting of the shareholders of AHIL and AHL was duly held but in spite of service of notice, neither the appellant nor his son attended the said meeting. On 10-5-2000, the Single Judge passed an order sanctioning the said scheme of arrangement after the Central Government gave its ‘no-objection’ for sanctioning of the said scheme. Thereafter the requirements of the Act were complied with, such as sending of intimation to stock exchange, giving effect to the scheme in balance -sheet, adopting annual account at the annual general meetings, filing of annual returns with the Registrar of Companies on the basis of sanctioned scheme, and so on. Inspite of all this neither the appellant nor any of his other family members raised any objection to the same. Besides the appellant and his son duly encashed the dividend warrants issued on the reduced share capital of AHIL without raising any objection. In December 2000, the appellant filed a title suit against AHIL in the Small Causes Court praying for decree of eviction directing the AHIL to quit, vacate and deliver the peaceful possession of certain premises. Thereupon, the appellant filed company application for recalling the order of reduction of share capital passed by the Single Judge on 10-5-2000, alleging that the companies, who were his tenants, for the purpose of availing of the benefit of the amendment of rent control legislation of the State deliberately reduced the share capital. The appellant further contended that while making reduction of share capital the provisions contained in sections 100 to 103 were not complied with. The Company Judge rejected said application. On appeal: HELD It was seen that appellant was quite conscious of the meeting of the shareholders and in spite of knowledge of amalgamation and reduction of share capital did not raise any objection. It further appeared that the appellant even encashed the dividend warrants issued on the reduced share capital and at the same time, in the pending suit for eviction, they came to know the existence of the order passed by the single judge when specific notice was served upon him. Further there was no substance in the contention of the appellant that the provisions contained in sections 100 to 103 were not complied with; that all the requirements of the reduction of share capital had been complied with as appeared from the facts of the case which were supported by the various annexures and, thus, the proceeding for framing of scheme could not be said to be tainted with mala fide intention. [Para 7] Therefore, there was no reason to interfere with the order passed by the Single Judge. [Para 9] The appeal was to be accordingly dismissed. [Para 10]
 

C.rajesh
on 03 April 2008
Published in Corporate Law
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