CR (P) Nos. 56, 59/2013 and 20/2014. Case: Kailash Varma and Ors. Vs Dushyant Varma and Ors.. Meghalaya High Court

Case NumberCR (P) Nos. 56, 59/2013 and 20/2014
CounselFor Appellant: K. Paul and R. Dutta, Advs. and For Respondents: H.S. Thangkhiew, Sr. Adv. and N. Mozika, Adv.
JudgesT. Nandakumar Singh, J.
IssueCode of Civil Procedure, 1908 (CPC) - Section 151
Judgement DateJanuary 07, 2016
CourtMeghalaya High Court


T. Nandakumar Singh, J.

1. These three revision petitions between the same parties for the same subject matter of disputes i.e. Hotel Pegasus Crown (a company incorporated under the Companies Act, 1956) and Delhi Mistan Bhandar (a restaurant as well as a sweet shop) were jointly heard for being disposed of by a common judgment and order.

2. Heard learned counsel for the petitioner and learned counsel appearing for the respondents.

3. The present case is the clearest example of continuous and unending disputes between the husband on one side and wife and son on the other side. We may remember what, Chanakya, great political thinker of the Medieval India, said in his "Arthashastra":--

This very earth is heaven for one whose; son is obedient, the wife is faithful and whose own heart is content with what money he has got.

The true son is one who is obedient to his father, a true father is one who looks after his sons, similarly true friend is one who is trustworthy and true wife is one who makes her husband happy.

"It is a living death to stay in a house where there is; an evil natured, badmouthing woman of low morals, or a cunning and deceitful friend, or an impolite talkative servant, or a possibility of the presence of a snake."

Factual Matrix:

4. Hotel Pegasus Crown runs under the aegis of Pegasus Hotels Private Limited, which is a company incorporated under the Companies Act, 1956. The total paid up share capital of the company as on 31.03.2012 was Rs. 15,43,600/- (Rupees fifteen lakhs forty three thousand and six hundred only) as was reflected in the Annual Return filed by the said company with the Registrar of Companies. The shareholding pattern as per the share register of the Company, Pegasus Hotels Private Limited is as follows:--

5. Article/or Para 5 of the Article of Association of Pegasus Hotels Private Limited provides the share capital as well as variation of right. Under Article 21 of the Article of Association transfer of shares have to be approved by the Board of Directors. Transfer has to be done in compliance with Articles 19 and 20 of the Article of Association. Articles 72, 73 and 74 of the Article of Association provide the manner as to how the Managing Director of the company is to be appointed and also what are the powers and functions of the Managing Director. Article 79 of the Article of Association provides as to how the Manager or Secretary is to be appointed. In the Article of Association of Pegasus Hotels Private Limited, there is no post of so called "Honorary Chairman". The relevant portions of the Article of Association of Pegasus Hotels Private Limited are quoted hereunder:--

"Article of Association
(A Private Company Limited by Shares)


1. Subject to the provision as hereinafter provided, regulations contained in Table A of Schedule 1 of the companies Act, 1956 (hereinafter referred to as Table A) shall apply to the companies so far as the same are applicable to a private company.

  1. (

    1. In these articles, unless there be something in the subject context inconsistent therewith:

    (i) "The Act" means the companies Act, 1956 or any statutory amendment or re-enactment thereof for the time being in force.

    (ii) "The company" means "PEGASUS HOTELS PRIVATE LIMITED".

    (iii) "Board of Directors or Board" means the Directors of the company duly assembled at a meeting of the Directors.

    (iv) "Director" means the Director of the company.

    (v) "Section" means the relevant section of the Act.

    (vi) "Seal" means the common seal of the company.

    (vii) "These present" means the Memorandum of Association and the Articles of Association and the Regulations of the company.

    (viii) "Words" imparting singular number includes the plural number and vice versa.

    (ix) Words imparting masculine gender includes feminine gender.

    2. (b) Unless the context otherwise requires or expression contained in these regulations shall bear the same meaning as in the Act or any statutory modification thereof in force at the time at which these regulations become binding on the company.

    3. The provision of section 171 to 186 of the Act shall not be applicable to the company.

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    1. The authorized share capital of the company is Rs. 15,00,000/- (Rupees fifteen lakhs) divided into 15,000/-(Rupees fifteen thousand) Equity shares of Rs. 100/- (Rupees One hundred) each with power to increase and reduce the authorized share capital of the company and to divide the share capital for the time being into several classes and to attach thereto respectively such preferential, deferred qualified or special rights, privileges or conditions as may be determined by or in accordance with the regulation of the company and to vary, modify and such rights, privileges or conditions in such manner as may for the time being be provided by the regulation of the company.

    2. The shares shall be under the control of the Board of Directors, who may allot or otherwise dispose of the same to such persons at such terms and conditions as they may think fit and proper.

    3. The Directors may issue at par or at a premium the whole or any portion of the share capital of the company for subscriptions at any time and may reserve any portion thereof for issuing in future as they may think fit.

    4. The Directors may also allot and issue shares in the capital of the company as full payment or part payment for any property sold or transferred, goods or machinery supplied or for services rendered to the company and shares which may be so allotted may be issued as fully or partly paid up shares as the case may be.

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      19. Without prejudice to the provision contained in article 20 thereof no share shall be transferred to a person who is not a member of the company so long any person selected by Directors as one whom it is desirable in the interest of the company to admit to membership is willing to purchase the same at a price agreed upon by a transferor and the Board of Directors or at the value fixed by the Auditors of the Company.

      20. Any share may transferred:

    5. By a member or other persons entitled to transfer to any member.

    6. by a member to any child or lineal descendant, son-in-law, father, mother, brother, sister, nephew, niece, wife or husband of such member and

    7. in case of death member by his heir, executor, administrator or by the holder of the succession certificate to any child or lineal descendant, son-in-law, father, mother, brother, sister, nephew, niece, widower of such deceased member.

      21. The directors may also without assigning any reason thereof, refuse the registration of any transfer of shares to a person not previously approved by them. But these provisions shall not apply to a transfer made in pursuance of clause (a), (b) and (c) of Article 20 thereof.

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      66. The quorum necessary for the transaction of the business of the directors shall be two or one third of the total strength whichever is higher.

      67. At the first meeting of the Board, the directors present shall choose one of themselves to be Chairman and the Director so chosen shall continue as chairman until otherwise determined by the Board. If at any meeting the Chairman is not present within fifteen minutes after the time appointed for holding the meeting, the other directors present may choose one of their member to be the Chairman of the meeting.

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      72. The Board may from time to time, appoint one of their member to the Managing Director of the company and may from time to time (subject to the provisions of any contract between him and the company, remove and dismiss him from office and appoint another in his place.

      73. The Managing Director shall not while he continues to hold office be subject to retirement by rotation and he shall not be reckoned as a director for the purpose of determining the rotation of retirement of directors or in fixing the number of director to retire, but shall be subject to the same provisions as to resignation and removal as other directors of the company and he shall ipso facto and immediately cease to be the Managing Director if he ceases to hold the office of the director for any cause.

      74. The Managing Director shall:

    8. Generally look after and manage the affairs of the company:

    9. Subject to the provisions of section 292 of the Act and subject to the supervision of the other directors, have the power for engagement and dismissal of Managers, Assistants, Employees, Clerks, servants and other staff including labourers and shall have the power for the general direction and management of the business of the company with full power to do all acts and things deemed necessary, proper or expedient for carrying on the business and concern of the company including the power to make such investments of the company's funds as he shall think fit and to make and sign all contracts and to draw, accept, endorse cheques, drafts, Government securities and instruments. The Managing Director shall have power to institute suits both civil and criminal against any person and to take necessary steps in all legal cases for and against the company and to grant to any person power of attorney as he may deem expedient and such power at pleasure to revoke;

    10. Exercise such other powers and perform such other duties as may be delegated from time to time by the board of director and

    11. Receive such remuneration from time to time as directed by the Board of Directors.

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      79. Subject to the provisions of the Act:

    12. A Manager or secretary may be appointed by the Board for such terms, at such conditions as it may think...

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