Case: C.N. Ramesh and Ors. Vs Mars Therapeutics and Chemicals Ltd. and Ors. (No. 2). Company Law Board

JudgesLizamma Augustine, Member
IssueCompany Law
Citation[2010] 158 CC 12 (CLB)
Judgement DateMay 05, 2010
CourtCompany Law Board

Order:

Lizamma Augustine, Member

  1. This is an application filed in C. P. No. 33 of 2006, seeking to restrain the company from holding the extraordinary general meeting proposed to be held on May 6, 2010, or any other date either to increase the authorised share capital of the company, or to issue any further shares.

  2. The applicants are the petitioners in the company petition. The company petition was disposed of by this Bench on June 30, 2008, directing the respondents therein to transfer the shares to the applicants' group. Since the order of the Company Law Board was not complied with, the applicants filed a petition under Section 634A of the Companies Act, 1956, for enforcement of the order dated June 30, 2008, as C. A. No. 2 of 2009. After the said company application was argued and reserved for order, this application is filed seeking the interim reliefs referred to above. The allegation is that an extraordinary general meeting is going to be held on May 6, 2010:

    (i) to increase the authorised capital from Rs. 4.5 crores to Rs. 10.5 crores with consequential changes to the memorandum and articles of association; and

    (ii) to call for a rights issue.

  3. The notice of the extraordinary general meeting is served on the applicants on April 17, 2010. The applicants pointed out that, the respondents had on prior occasions sought the permission of the Bench to raise the authorised capital and to further issue and allot 6,26,423 equity shares for similar reasons stated in the extraordinary general meeting notice, was not entertained. It is submitted that, without enforcing the order of this Bench, to permit a rights issue will only create further prejudice to the applicants and will cause havoc in the affairs of the company.

  4. The application is opposed on the ground that the company application is not maintainable as the Company Law Board has become functus officio in the matter, since the company application is moved after the disposal of the company petition, on the basis of a fresh cause of action. Alternatively, it is submitted that they are willing to issue shares to the applicants in the ratio of 55.35 per cent. and 44.65 per cent. to which the applicants are not agreeable. According to the applicants, their group is eligible for 64 per cent. held by this Bench on June 30, 2008.

  5. Heard the arguments on both sides and perused the records.

  6. On May, 3, 2010 (C.N. Ramesh v. Mars Therapeutics and Chemicals Ltd. (No. 1) [2010] 158 Comp...

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