JUDGMENT
Sunil Ambwani, J.
1. This company petition to wind up Banaras Beads Ltd. under the just and equitable clause under Sections 433 and 433(f) of the Companies Act, 1956 (‘the Act’) has been filed by Shri Ajit Kumar Gupta, holding shares in the company, on various grounds, namely, that the company has not complied with statutory requirements of the Act, by not submitting the annual return, failure to prepare and audit the accounts of the company, and are, thus, acting in oppression to the minority shareholders’ interest in the company.
2. From the record, I find that two groups holding majority of shares in the company, namely, Shri Ashok Kumar Gupta and Shri Raj Kumar Gupta, submitted their disputes to an arbitrator, who has given detailed award on 1-11-1998. Objection against the award was dismissed by the District Judge, Varanasi, against which first appeal from order (809 of 1999) is pending before this Court and by interim order dated 15-12-1999, it has been provided that the scheme formulated by the arbitrator shall be subject to the consideration of the High Court on its merits and the parties may participate in the proceedings before the High Court without prejudice to their rights and contention. The award is, as such, subject to the approval of the scheme by the High Court.
3. Company Petition No. 14 of 1999 has been filed by Shri Raj Kumar Gupta and nine others including Shri Ajit Kumar Gupta under Sections 397, 398, 399, 402, 403, 406, 408 and 409 of the Act, before the CLB,
complaining of oppression and mismanagement. In this petition, an order has been passed by the CLB, Principal Bench, New Delhi, on 28-12-2001, with the consent of Shri Raj Kumar Gupta, the petitioner, and Shri Ashok Kumar Gupta, the second respondent providing for modalities of deciding the fair value of the shares to be finalised by the Bench and the matter has been fixed for hearing on 18-3-2002.
The order is quoted as below :
“Company Petition No. 14 of 1999.
Present : S. Balasubramanian, Vice-Chairman.
In the matter of Banaras Beads Ltd.
Parties present :
1. Raj Kumar Gupta, petitioner.
2. Ashok Kumar Gupta, second respondent.
Order
1. With a view to resolve the disputes in relation to C.P. No. 14 of 1999 (Banaras Beads Limited), Shri Ashok Kumar Gupta, respondent No. 2 and Shri Raj Kumar Gupta, the petitioner, were present before the Bench.
2. The consensus emerged was that Shri Raj Kumar Gupta will take over the management and control of the company in exclusion of Shri Ashok Kumar Gupta and that all the shares held by Shri Ashok Kumar Gupta and his group would be acquired by Shri Raj Kumar Gupta. To enable this exercise to be completed, it has also been agreed that the company/Shri Ashok Kumar Gupta will furnish the following particulars/details to Shri Raj Kumar Gupta :
(1) The details of top ten shareholders along with their shareholding with folio number as on 1-8-1981, and as on 1-1-2002.
(2) List of loans and advances as on 1-1-2002, along with action taken to recover the dues and also the terms on which such loans and advances were given.
(3) The details of sources of funds for purchase of cylinders and the usage of the proceeds of the sale of these cylinders.
(4) The details of stock as on 31-3-2001, and approximate stock as on 1-1-2002.
(5) Disbursement of the amount of dividend during the last three years in respect of all the family members.
(6) A draft profit and loss account and balance-sheet in respect of Varanasi unit and other associate companies under the control of Shri Ashok Kumar Gupta for the year ended 31-3-2000 and 2001.
(7) Shareholding details of Ram Gulam Kanhiya Lal Trust as on 1-1-2002.
(8) Inspection of the share transfer register and also the minutes of the shares transfer committee.
(9) Copy of the title deed relating to the premises at B-31 /7, Moti Bhavan, Lanka, Varanasi, along with list of tenants and the rent received.
3. Likewise, Shri Raj Kumar Gupta will furnish draft profit and loss account and balance-sheet of Delhi office and other associated companies as on 31-3-1999, 31-3-2000 and 31-3-2001. Shri Raj Kumar Gupta will also furnish details of all outstandings as on 1-2-2002, and the action taken to recover the same.
4. It has been agreed by both the parties that in case Shri Raj Kumar takes over the company, fair value for the shares held by Shri Ashok Kumar Gupta and his group will be paid by Shri Raj Kumar and his group. The modalities of deciding the fair value will be finalised by this Bench.
5. All the above documents/particulars/details will be exchanged in the presence of this Bench on 25-2-2002, at 11.00 a.m. whereafter the parties will be present on 18-3-2002, at 3.00 p.m. to decide the modalities for valuation of shares.
6. In view of this agreement, the hearing fixed on 3-1-2002 and 4-1-2002, stands deferred.”
4. It has also been pointed out that Company Application No. 23 of 1998 under Section 391 read with Section 394 of the Act, proposing a scheme of arrangement in pursuance of the award given by the arbitrator and approved by the board of directors, was filed, in which, the court directed meetings of shareholders and creditors to be held. After the meetings, a Company Petitioner No. 29 of 1999 is pending for sanctioning the scheme.
5. The company is also defending Suit No. 119 of 2000, viz., State Bank of India v. Banaras Beads Ltd. for recovery of Rs. 8.11 crores approximately. Criminal cases filed by Registrar of Companies against the company being Criminal Cases Nos. 439 and 440 of 2000 are also pending at Varanasi, for delay and failure of compliance with the provision of the Companies Act, 1956.
6. Shri R.P. Agarwal, appearing for Banaras Beads Ltd., has relied upon Sections 443(2), which provides that where the petitioner has filed a petition on the ground that it is just and equitable that the companies should be wound up, the court may refuse to make an order of winding up, if it is of the opinion that some other alternative and efficacious remedy is available to the petitioners, and that they are acting unreasonably in seeking winding up, instead of pursuing the said remedy.
7. In the present case, not only the petitioners have an alternative and efficacious remedy, but that they are actually availing of and pursuing that remedy. The promoter of the applicant-company Shri Ajit Kumar Gupta, is a petitioner in Company Petition No. 14 of 1999 before the CLB. This court has every reason to believe that the interest of Shri Ajit Kumar Gupta who also holds the shares in the respondent-company will be protected by the CLB, in case any scheme is formulated, or any arrangement is proposed, in exercise of the powers under Sections 397 and 398. I find that the apprehension that he will not be heard, is wholly unfounded.
8. In the aforesaid circumstances, this company petition under Section 433(f) is not maintainable, and is, dismissed.