DANKHA DEVI AGARWAL (DEAD) THROUGH LRS.versusTARA PROPERTIES PVT. LIMITED AND ORS.

A              DANKHA DEVI AGARWAL (DEAD) THROUGH LRS.
                                  v.
                 TARA PROPERTIES PVT. LIMITED AND ORS.

                                 AUGUST 17, 2006

B                    [B.P. SINGH AND AL TAMAS KABIR, JJ.]


          Companies Act, 1956-Sections 286, 397 and 399-Fradulent transfer
    of shares belonging to a majority shareholder by minority shareholders with
    a view to wrest control over the management and affairs of the company-
C   Board of Directors allotted unsubscribed authorised capital with a view to
    regain control over the company-Minority shareholders were removed from
    Directorship of the company by passing a Resolution in an Extra-ordinary
    General Meeting of the Company-Suit filed by the majority shareholder
    allegedly to declare the purported transfer of shares to the minority
D   shareholders as null and void~Minority Shareholders forged the signature
    of the majority shareholder and withdrew the suit by filing an application-
    Application filed by the majority shareholder for recalling the order of
    withdrawal of the suit was dismissed by the High Court---Correctness of-
    Held, on facts, there are certain suspicious ciru..::mstances under which the
    suit has been withdrawn-Hence, High Court is directed to decide the
E   application for recalling the order afresh.

          Application by minority shareholders for setting aside the Board
    Resolution of removing them from Directorship of the company and the issue
    of remaining unsubscrib.ed shares was allowed by High Court---Correctness
F   of-Held, since the decision of the High Court has not been seriously contested
    on behalf of the company, the appeal is dismissed.

           A company was incorporated with appellant, her husband and her two
    sons as shareholders by allotting 10 shares to each to them. They became
    the first Directors of the Company. The appellant was allotted 3000 additional
G   shares for leasing out her land in favour of the company and thereby became
    a majority shareholder. The appellant transferred part of her shares to the
    wives and children of her two sons and retained the remaining shares with
    her maintaining herself as a majority shareholder. The elder son, with a view
    to wrest control over the management and affairs of the company, is alleged
    to have forged the signatures of the appellant and transferred her shares to
H                                        582
                DANKHA DEVI AGARWAL (DEAD) THROUGH LRS. ' TARA PROPERTIES PVT. LTD.   583

     himself and his wife. On discovery of the fraud and other irregularties, the           A
     Board of Directors passed a Resolution and allotted the unsubcribed shares
     of the authorised share capital to appellant's husband and her younger son.
     The company held an Extra-ordinary General Meeting in which the elder son
     and his wife were removed from Directorship of the company by passing a
     Resolut:on.
                                                                                            B
           The appellant filed a suit before High Court for a declaration that the
     purported transfer of her shares to her elder son and his wife-respondent-
     was null and void and that she was the sole and absolute owner of the shares
     ofthc company. The husband of the appellant died. The respondents forged
     the signatures of the appellant and got the suit dismissed by the High Court           C
     without her knowledge. When the appellant came to know that her suit has
     been dismissed as withdrawn based on her forged signatures, she filed an
     application before the High Court for recalling the orders. Single Judge
     dismissed the application and the appeal preferred by her was also dismissed
     by the Division Bench of the High Court. Hence an appeal filed by the appellant
     before this Court against the respondents.                                             D
           During the pendency of the Civil appeal before this Court, the appellant
     died. The respondents filed an application before High Court for setting aside
     the Board Resolution of removal from Directorship of the Company and the
     allotment of remaining unsubscribed shares. A Company Judge of the High
     Court allowed the application. The Company preferred an appeal which was               E
     dismissed by the Division Bench of the High Court. Hence an appeal filed by
     the company against the respondents.

           The appellant contended that the respondents had forged her signature
     and illegally transferred her shares to themselves without her knowledge with          F
     a view to wrest control over the management and affairs of the company; that
     respondents also forged her signature and filed an application for withdrawal
     of her suit without her consent; and that the advocate of the respondents
     represented falsely as the advocate of the appellant before the High Court
     and withdrew her suit by mentioning before the Court on a day when the
     application was not listed before the Court for hearing.                               G
,-
           Respondent contended that the appellant transferred her shares to him
     and his wife on her own volition; that the appellant withdrew the suit on her
     own as she did not want to pursue it after the death of her husband; and that
     the Company Judge rightly struck down the Board Resolutions of removing
     them from the Directorship of the company and allotment of remaining shares            H
    584                         SUPREME COURT REPORTS (2006] SUPP. 4 S.C.R.

A   of the authorised share capital of the compa11y.

          Disposing of the appeals, the Court

           HELD: I. There are certain unusual circumstances in which the suit
    filed by the appellant was withdrawn as also the manner in which the
B   application filed by her for recalling the order of dismissal of the suit was
    dismissed by the Single Judge of the High Court. The manner in which the
    advocate, who was earlier the advocate of her elder son, assumed charge of
    the proceedings on behalf of the appellant in the suit generates an impression
    that all was not above board. The withdrawal of the suit soon afterr the advocate
    took over the proceedings heightens the said suspicion. Added to the above
C   circumstances, is the fact that the suit was mentioned for the purpose of
    withdrawal thereof on a day when the same was not even listed for the said
    purpose. The developments after the filing of the application by the appellant
    for a declaration that the purported transfer of her shares in favour of her
    elder son and his wife was null and void, leading to the withdrawal of the suit,
D   has not been properly dealt with by the High Court. The events leljve a
    lingering doubt as to whether the appellant had really instructed her Advocate
    on Record to give a change in favour of another advocate, who was the advocate
    of the elder son against whom the suit had been filed, particularly when it
    was to his interest that the suit stood withdrawn. The High Court is directed
    to rehear the application and decide afresh after taking into consideration
E   the manner in which the change was obtained by the advocate and the
    mentioning of the matter ex-parte for non-proseuction of the suit on a date
    when the matter was not listed for such purpose. [591-H; 592-A-G)

          2. It has not been seriously argued on behalf of the appellant-company
F   that the Single Judge had erred in holding that the removal of respondents
    from the Board of Directors of the company was illegal on the ground that
    the meetings of the company were without due compliance with the provisions
    of Section 286 of the Comp:mies Act. Similar is the case as far as the issuance
    and allotment of unsubscribed shares in favour of the appellant's husband
    and her younger son is concerned. The Division Bench has affirmed the view
G   of the Single Judge that the story of notice having been given to the elder
    son, of the meeting in which his directorship was in question, and his staying
    away from such meeting, was difficult to accept. The decision of the Single
    Bench or the Division Bench has not been seriously contested on behalf of
    the appellant. In the facts of the case, it is difficult to take a view which is
H   different from that taken both by the Single Judge and the Division Bench of
  DAN KHA DEVI AGARWAL (DEAD) THROUGH LRS. " TARA PROPERTIES PVT. LTD. [ALTAMAS KABIR, J.]   585

the High Court. (592-H; 593-A-CI                                                                   A
      CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1015 of2000.

      From the Judgment and Order dated 13 .9 .1999 of the High Court of
Calcutta in A.P.O.T. No. 1452/1999.
                                                                                                   B
      With Civil Appeal No. 6535 of2004.

     Vijay Hansaria, Rana Mukherjee Siddharth Gf\utam, Goodwill Indeevar
and D. Mahesh Babu for the Appellants.

     R.F. Nariman, Ranjit Kumar, Bijan Kumar Ghosh, R.D. Upadhyay and                              C
Sumita Ray for the Respondents.

      The Judgment of the Court was delivered by

      ALTAMAS KABIR, J. Dankha Devi Agarwal (since deceased) is the
appellant in Civil Appeal No. I 015/2000. She was the mother of Bhagirath                          D
Agarwal (respondent No.2 in the appeal) and Smt. Leela Agarwal (respondent
No.3) is the wife of the respondent No.2.

      Tara Properties Private Limited and three others are the appellants in
Civil Appeal No.6535/2004. It may be mentioned that the appellant in this
appeal is the respondent No. I in the earlier appeal and respondent No.1 in                        E
this appeal is also the respondent No.2. in the earlier appeal and the other
parties are common.

      Since the two appeals arise out of the same set of facts between the
same parties, they have been taken up together for hearing and disposal and
are being disposed of by this common judgment.                                                     F
      Tara Propelties Private Limited (hereinafter referred to as 'the Company')
was incorporated on 28th December, 1962, as a family company with Tara
Chand Agarwal (since deceased), Dankha Devi Agarwal, his wife (since
deceased), their elder son, Bhagirath Agarwal and younger son Chandra
Prakash Agarwal. Each of them was allotted 10 shares each in the newly- G
fonned company. On 2nd March, 1963 Dankha Devi Agarwal granted a lease
of the land at 13, Camac Street, Calcutta, to the Company and in lieu of
premium ofRs.3 lakhs, 3000 shares of the Company were allotted in favour
of Dankha Devi Agarwal. By virtue of such allotment, Dankha Devi Agarwal
came to hold 30 I 0 shares and the rest continued to hold I0 shares each. All H
    586                        SUPREME COURT REPORTS [2006] SUPP. 4 S.C.R.

A the share holders were indicated as the first Directors of the Company.
            On account of transfer of shares by Dankha Devi Agarwal during her
    life time, the share holding pattern as on 28th June, 1977, was as follows:-
      Dankha Devi                                           -   1660 shares
      Tara Chand Agarwalla                                  -   10 shares
B     Bhagirath Agarwal                                     -   IO shares
      Chandra Prakash Agarwal                               -   I0 shares
      Smt. Lila Agarwalal wife of
      Bhagirath Agarwal                                      - 200 shares

c     Smt. Rekha Agarwal wife of
      Chandra Prakash Agarwal                               - 300 shares

      Rajesh S/o Bhagirath Agarwal                              200 shares

      Vandana D/o Chandra Prakash Agarwal                       300 shares
D
      Anita D/o Bhagirath Agarwal                            - 350 shares
         The aforesaid share-holding will indicate that the company was a family
    company.

E       As will appear from the materials on record, Tara Chand Agarwal moved
  to New Delhi in 1978 along with his wife and younger son leaving the family
  company in the sole charge of his elder son Bhagirath Agarwal. Subsequently,
  the family returned to Calcutta and from a public notice issued by the
  Calcutta Municipal Corporation on 25th September, 1989, in t~e Calcutta
  Edition of the Daily Statesman, it came to light that the tax liability of the
F company in so far as the property leased to the company was concerned was
  to the tune of Rs.23,06,748/- which was outstanding. On coming to learn of
  the said outstanding dues, a meeting of the Directors of the company was
  convened by Tara Chand Agarwal where the agenda was for production of
  relevant records by Bhagirath Agarwal for the inspection of the other Directors.
G However, as the records wen: not produced by Bhagirath Agarwal on the plea
  that the same had been misplaced, Tara Chand Agarwal caused an
  investigation to be made by a Chartered Accountant from whose report it
  transpired that on or about 17th May, 1983 out of the share holding of 1660
  shares held by Dankha Devi Agarwal, 1150 shares were purported to have
  been transferred by her to Bhagirath Agarwal and a further 500 shares were
H purported to have been transferred in favour of his wife. By the said process,
  DANKHA DEVI AGARWAL (DEAD) THROUGH LRS. ''·TARA PROPERTIES PVT LTD. [ALTAMAS KABIR, J.]   587

Bhagirath Agarwal and his wife increased their share holding from I0 to I410 A
and from 200 to 700 respectively while reducing the share holding of late
Dankha Devi Agarwal from I660 shares to only 10 shares. On discovery of
the aforesaid facts and other irregularities alleged to have been committed
by Bhagirath Agarwal, the Board of Directors decided to issue a balance of
I960 equity shares out of the authorized share capital which had remained
unsubscribed at the meeting of the Board of Directors held on 20th October, B
1989. The Company decided to allot 1500 shares out of the said 1960 equity
shares to Tara Chand Agarwal and to allot the remaining 450 shares to his
younger son, Chandra Prakash Agarwal.

      On 24th October, 1989, a special notice was given for calling an extra- C
ordinary general meeting. A copy of the said notice was duly served on
Hhagirath Agarwal, and a copy was also sent to the Registrar of Companies.
Despite receipt of notice, Bhagirath Agarwal did not attend the meeting and
the Board of Directors took a Resolution to remove both Bhagirath Agarwal
and Smt. Leela Agarwal from the Directorship of the company. The decision
of the Board of Directors was conveyed to the Registrar of Companies and D
the requisite forms were also deposited with him.

       Simultaneously, with the notice for holding the extra-ordinary general
meeting of the company, Dankha Devi Agarwal also filed a suit, being No.874
of I989, in the Ordinary Original Civil Jurisdiction of the Calcutta High Court
for a declaration that the purported transfer of 1650 shares in the name of the E
plaintiff to Bhagirath Agarwal and his wife were null and void and without
any effect and for a further declaration that Dankha Devi Agarwal was the
sole and absolute owner of I660 shares in the defendant-company. She also
claimed a decree against the said .Shagirath Agarwal, to deliver up and
cancel the relevant shares in connection with the transfer of the said I650 F
shares in favour of Bhagirath Agarwal and his wife who were made defendant
Nos. 2 and 3 in the suit. On 6th November, 1989 itself, an ad interim order
of injunction was passed in the suit restraining the defendant Nos. 2 and
3 from transferring or otherwise dealing with the shares in question and
also from exercising any voting right or from receiving dividends in respect
of the said 1650 shares.                                                        G
       Bhagirath Agarwal filed a Company Petition No.290/1990 on 18th June,
1990, before the Calcutta High Court against the company, Tara Chand
Agarwal, Smt. Dankha Devi Agarwal, Chandra Prakash Agarwal and others
inter alia under Sections 397 and 399 of the Companies Act. The same was
                                                                                                  H
    588                        SUPREME COURT REPORTS [2006] SUPP. 4 S.C.R.

A admitted and an order of status quo was passed by the learned Single Judge
  on 18th June, 1990 and an additional interim order was also passed to the
  effect that no Board meeting or any General Meeting were to be held. The
  matter wa5 duly contested and ultimately on 20th March, 1992 the Company
  Application was disposed of by the learned Single Judge with a direction for
  settlement of all the family assets in three equal shares of Tara Chand
B Agarwal and Dankha Devi Agarwal, Bhagirath Agarwal and Chandra Prakash
  Agarwal. The said order was, however, stayed by the Division Bench on 15th
  July, 1993 in an appeal filed by Bhagirath Agarwal. Subsequently, in March
  1995, Tara Chand Agarwal died. Subsequent to his death, on or about 28th
  July, 1995, the suit filed by Dankha Devi Agarwal was sought to be withdrawn,
C purportedly without the knowledge of Smt. Dankha Devi Agarwal.
           On 2nd September, 1998 upon discovering that her suit had been
    dismissed as withdrawn, Smt. Dankha Devi Agarwal made an application for
    recalling of the orders dated 20th June, 1995 and 28th July, 1995 on the ground
    that she had not withdrawn her suit and that the application for withdrawal
D   was based on her forged signatures obtained by Shri Bhagirath Agarwal.
    The said application was contested by Shri Bhaghirath Agarwal and was
    ultimately dismissed by the learned Single Judge on 4th August, 1999. An
    appeal preferred from the said order dated 4th August, 1999, was dismissed
    by the Division Bench on 13th September, 1999. In the first of the two appeals
E   being heard by us, this Court granted leave to appeal to Smt Dankha Devi
    Agarwal against the aforesaid order of the Division Bench of the High Court
    dated 13th September, 1999. While the said appeal was pending in this Court,
    Smt. Dankha Devi Agarwal died in January, 2001.

           Simultaneously with the aforesaid proceedings Shri Bhagirath Agarwal
p   also filed an application for setting aside the resolution adopted by the Board
    of Directors of the Company removing him and his wife from the Directorship
    of the Company. On 6th August, 2001, the said application was allowed by
    the learned Single Judge and the removal of the said respondents from the
    Board of Directors and the allotment of 1960 shares to Tara Chand Agarwal
    and Chandra Prakash Agarwal were struck down. Further, the appointment
G   of the respondents I to 5 as Directors of the Company in the Board meeting
    of 5th September, 1998, was upheld.

        Aggrieved by the said Judgment and Order of the learned Single Judge,
  the appellant filed an appeal, being APOT No. 594 of 200 I, and filed an
H application therein for appointment of Receiver and other reliefs. On 6th
 DANKHA DEVI AGARWAL !DEAD) THROUGH LRS. •·.TARA PROPERTIES PVT. LTD. [ALT AMAS KABIR J]   589

August, 2003, the Division Bench dismissed the appeal leaving the interim A
application, being ACO No. 19 of 2002, undecided. Civil Appeal No. 6535 of
2004 is directed 1gainst the said judgment and order of the Division Bench
of the Calcutta High Court.

       Appearing for the appellant, Mr. Vijay Hansaria sought to highlight the
case of the appellant that Bhagirath Agarwal had forged the signatures of B
Smt. Dankha Devi Agarwal to illegally and wrongfully transfer 1650 shares
belonging to Smt. Dankha Devi Agarwal to himself and his wife in a bid to
wrest control of the management and affairs of the respondent-Company,
which had been founded by Shri Tara Chand Agarwal. Mr. Hansaria, also
highlighted subsequent facts involving the withdrawal of the suit filed by C
Smt. Dankha Devi Agarwal questioning the transfer of the aforesaid shares
in the name ofShri Bhagirath Agarwal and his wife. He emphasized that even
for the purpose of withdrawing the suit the signature of Smt. Dankha Devi
Agarwal had been forged and the advocate appearing on her behalf in the
said application was changed and another advocate was appointed. The
changed advocate appeared before the Court on a day when the matter was D
not listed and upon mentioning, the application was treated to be listed on
that day's list and was allowed to be withdrawn.

      Mr. Hansaria submitted that despite the unusual facts brought to notice
of the learned Single Judge and the fraud perpetuated in withdrawal of the
application for restoration of the suit, the learned Single Judge dismissed the E
application for revival of the suit and even the appeal filed by Smt. Dankha
Devi Agarwal against the said order of the learned Single Judge was dismissed
by the Division Bench at the ad-interim stage leaving her deprived of her
assets.

      Mr. Hansasria submitted that the second of the two appeals before us,
                                                                                                 F
is an off-shoot of the facts relating to the first appeal and a decision therein
will be dependent on the out-come of the first of the said two appeals.

      Mr. Hansaria submitted that under unavoidable circumstances Shri Tara
Chand Agarwal had moved to Delhi along with his wife, Smt. Dankha Devi G
Agarwal and second son, Shri Chandra Prakash Agarwal, leaving the family
business in the care of their elder son, Shri Bhagirath Agarwal but on coming
to learn of the manner in which the affairs of the company were being
managed by Shri Bhagirath Agarwal, Smt. Dankha Devi Agarwal, his own
mother, was compelled to file a suit to undo the fraudulent activities of Shri
Bhagirath Agarwal. Mr. Hansaria submitted further that the learned Single H
    590                     SUPREME COURT REPORTS [2006] SUPP. 4 S.C.R.

A Judge of the Calcutta High Court decided Smt. Dankha Devi Agarwal's
    application for restoration of her suit in a completely injudicious manner and
    based his decision on a comparison of Smt. Dankha Devi Agarwal's signatures
    on the different documents in the case without taking into consideration the
    passage of time and the age of Smt. Dankha Devi Agarwal.

B           The defence set up by Shri Bhagirath Agarwal is one of denial of all
    the allegations made on behalf of the appellant. In fact, it is his specific case
    that Dankha Devi had no role to play in the events subsequent to the transfer
    of 1650 shares by her in his and his wife's favour. It was contended that the
    transfers had been effected by Dankha Devi Agarwal in favour of her elder
C   son on her own volition as far back as in 1983-84 and returns were filed before
    the Registrar of Companies on 15th June, 1984 where such transfer of shares
    was recorded. Nothing was done in respect of the transfer of the said shares
    till 6th November, 1989, when Smt. Dankha Devi Agarwal allegedly filed the
    suit for cancellation of the transfer documents relating to the said 1650 shares.
    An interim order was passed in the suit restraining Shri Bhagirath Agarwal
D   and the group represented by him from disposing of the said shares or
    exercising their right to vote on the basis thereof. It was urged that the
    subsequent steps taken for withdrawal of tl;e suit after the death of her
    husband was also at the instance of Smt. Dankha Devi Agarwal who obviously
    did not wish to pursue the matter further. It was submitted that only upon
E   being satisfied that Smt. Dankha Devi Agarwal did not wish to proceed with
    the suit was an order passed therein permitting her to withdraw the suit.

        Appearing for Shri Bhagirath Agarwal, Mr.R.F. Nariman, learned senior
  counsel, pointed out that an extra-ordinary general meeting had been convened
  on 5th September, 1998, as per the orders passed by the Calcutta High Court
F in which Smt. Dankha Devi Agarwal was brought in a wheel-chair. According
  to the report of the Chairman of the meeting appointed by the High Court,
  she had been completely reduced to a vegetable existence and did not respond
  to any question or realize what was happening around her. The Chairman
  expressed the opinion that although Dankha Devi Agarwal was in the meeting
  room, she did not have the slightest notion of what was going on there and
G she did not cast her vote in the meeting.
          Mr. Nariman further contended that the Special Leave Petitions which
    have been filed did not contain the left thumb impression of Dankha Devi
    Agarwal, as has been made out, and that the same was forged for the purpose
H   of presenting the Special Le:ive Petitions. It was further contended that after
  DANKHA DEVI AGARWAL (DEAD) THROUGH LRS." TARA PROPERTIES PVT. LTD. [ALTAMAS KAHIR. J.]   59 J
the death of Dankha Devi Agarwal, Shri Chandra Prakash Agarwal has A
substituted his name and the name of his wife as appellants in place of
Dankha Devi Agarwala and it was, therefore, quite clear that the entire matter
had been engineered by Shri Chandra Prakash Agarwal to prevent Shri
Bhagirath Agarwal and his group from enjoying the benefits of the profits and
income from the business of the company which comprised of house properties
as well as two tea gardens.                                                    B
      Regarding the allotment of 1960 shares by Shri Tara Chand Agarwal in
his own favour and in favour of Shri Chandra Prakash Agarwal, Mr. Nariman
submitted that it had been rightly decided by the learned Company Judge that
the removal of Shri Bhagirath Agarwal and his wife from the Board of Directors                    C
of the company was unlawful as was the allotment of the said 1960 shares.
Both the decisions said to have been adopted by the Board of Directors at
the meeting held on 22nd November, 1989 were struck down and the
appointment of the respondent Nos. I to 5 as Directors of the company at
the Board meeting held on 5th September, 1998, was upheld.
                                                                                                  D
      From the facts as disclosed, it is quite clear that there were differences
within the family with Shri Tara Chand Agarwal and his younger son, Shri
Chandra Prakash Agarwal, on one side and his elder son, Shri Bhagirath
Agarwal on the other, and that Smt. Dankha Devi Agarwal was merely used
as a front for the parties to further their individual gains.
                                                                                                  E
       As has been rwealed from the materials on record, the transfer of the
 1650 shares ofSmt. Dankha Devi Agarwal in favour ofShri Bhagirath Agarwal
and his wife was effected some time in 1983-84 at a time when Shri Tara Chand
Agarwal and Smt. Dankha .Devi Agarwal along with_ the family of Chandra
Prakash Agarwal had shifted to Delhi. It was after Shri Tara Chand Agarwal
and others returned to Calcutta in 1985 that a Board Meeting of the Company F
was convened by Tara Chand Agarwal on 26th May, 1989, when Shri Bhagirath
Agarwal was requested to produce the minute book of the Board's meetings.
It was thereafter that CS No.874/1989 was filed by Smt. Dankha Devi Agarwal
against the respondents in the Calcutta High Court inter alia praying for a
declaration that she was the sole and absolute owner of 1660 shares and that G
the transfer of 1650 shares in favour of respondents Nos. 2 and 3 be declared
null and void.

      Be that as it may, there are certain unusual circumstanGes in which the
aforesaid suit filed by Smt. Dankha Devi Agarwal was withdrawn as also the
manner in which the application filed by her for recalling the order of dismissal H
    592                    SUPREME COURT REPORTS [2006[ SUPP. 4 S.C.R.

A of the suit was dismissed by the learned Single Judge. The manner in which
    Smt. Anjali Agarwal, who was Shri Bhagirath Agarwal' s Advocate, assumed
    charge of the proceedings on behalf of Smt. Dankha Devi Agarwal in the suit
    filed by her against Bhagirath Agarwal, generates an impression that all was
    not above board. The withdrawal of the suit soon after Smt. Anjali Agarwal
B   took over the proceedings heightens the said suspicion. Added to the above
    circumstances, is the fact that the suit was mentioned by the learned counsel
    briefed by Smt. Anjali Agarwal for the purpose of withdrawal thereof on a day
    when the same was not even listed for the said purpose.

           The developments after the filing of the application by Smt. Dankha
C   Devi Agarwal for a declaration that the purported transfer of 1650 shares in
    favour of Bhagirath Agarwal and his wife was null and void, leading to the
    withdrawal of the suit, has not been properly dealt with either by the learned
    Single Judge or the Division Bench which merely followed the order of the
    learned Single Judge. Both the Single Judge and the Division Bench appear
    to have been influenced by the affidavit said to have been sworn by Shri
D   Chandra Prakash Agarwai on 24th July, 1995, wherein it had been stated that
    Smt. Dankha Devi Agarwal was unable to hear, speak, read or write and that
    she was leading a vegetable existence and her mind had gone completely
    blank. The events, as disclosed leave a lingering doubt as to whether Smt.
    Dankha Devi Agarwal had really instructed her Advocate on Record to give
E   a change in favour of Smt. Anjali Agarwal, who, as indicated hereinabove,
    was the advocate of Shri Bhagirath Agarwal against whom the suit had been
    filed, particularly when it was to his interest that the suit stood withdrawn.

         In such circumstances, we allow the appeal and set aside the order
  passed by the Division Bench of the High Court dated 13th September, 1999,
F dismissing the appeal against the order dated 4th August, 1999, passed by
  the learned Single Judge dismissing the application filed by Smt. Dankha Devi
  Agarwal for recalling the orders passed by the learned Single Judge dated
  20th June, 1995 and 28th July, 1995. We also set aside the said order of the
  learned Single Judge dated 4th August, 1999 and direct the aforesaid application
  to be re-heard and decided afresh after taking into consideration the manner
G in which the change was obtained by Smt. Anjali Agarwal and the mentioning
  of the matter ex-parte for non-prosecution of the suit on a date when the
  matter was not listed for such purpose.

          As far as Civil Appeal No.6535/2004 is concerned, it has not been
H seriously argued on behalf of the appellant that the learned Single Judge had
 DANKHA DEVI AGARWAL (DEAD) THROUGH LRS. '·TARA PROPERTIES PVT. LTD. [ALTAMAS KABJJU.]   593

erred in holding that the removal of Shri Bhagirath Agarwal and his wife from A
the Board of Directors of the company was illegal, on the ground that the
meetings of the company held on 26th October, 1989 and 21st November, 1989
were without due compliance with the provisions of Section 286 of the
Companies Act. Similar is the case as far as the issuance and allotment of 1960
shares in favour of Shri Tara Chand Agarwal and Shri Chandra Prakash B
Agarwal is concerned. The Division Bench has affirmed the view of the
learned Single Judge that the story of notice having been given to Shri
Bhagirath Agarwal of the meeting where his directorship was in question, and
his staying away from such meeting, was difficu It to accept. The decision of
the Single Bench or the Division Bench has not been seriously contested on
behalf of the appellant. In the facts of the case, it is difficult to take a view C
which is different from that taken both by the Single Judge and the Division
Bench of the High Court.

       The aforesaid appeal, therefore, fails and is dismissed.

      Consequently, we are not convinced that any order is required to be D
passed as prayed for in the application filed on behalf of Shri Bhagirath
Agarwal under Section 340, Code of Criminal Procedure being I.A.No. 10/2006
and the same is also dismissed.

     Let a copy of this order in so f~r as it relates to Civil Appeal No. I 015/
2000 be communica•ed to the High Court.                                                        E
B.S.                                                             Appeals disposed of.