162 SEBI & Corporate Laws - Reports [Vol. 154
Learned
counsel
would
contend
that
the
aforesaid
three
Board
meetings
before^
the
Company
Law
Board
were
gravely
vitiated
and
invalid
for
the
rea
sons -
that
they
were
in
violation
of
Sections
286
and
300
of
the
Companies
Act
which^
operate
independently.
The
resolutions
passed
in
the
impugned
meetings
were^
basically
for
allotment
of
shares
by
the
appellants
to
themselves
and
one
of^
the
meetings
held
on
10. 5. 2005
also
concerned
with
purported
transfer
of
shares^
from
Moral
to
Mr.
R.P.
Mittal.
These
meetings
constituted
continuous
acts^
calculated
to
prejudice
and
oppress
Hillcrest
and
Mr.
Ashok
Mittal.
The
appellants^
had
limited
financial
investment
in
HQRL
and
Hillcrest
and
Mr.
Ashok^
Mittal
have
substantially
invested
in
HQRL.
Moral
transferred
the
bank
loan^
to
HQRL,
and
the
latter
repaid
it.Learned
counsel
further
contended
that
the
appellants’
argument
that
the
High^
Court
had
reached
its
conclusions
on
the
basis
of
this
Court’s
view^ prima facie
in
the
matter
of
grant
of
interim
injunction,
was
incorrect
and
errone
ous. -
The
findings
in
the
impugned
judgment
are
based
entirely
on
the
settled
legal^
propositions.
It
was
submitted
that
the
appellants’
reliance
on
FEMA
is^
erroneous.
It
was
further
submitted
that
the
appellants
had
on
30. 8. 2018
sought^
to
file
certain
documents
which
were
neither
placed
on
record
before
the^
Company
Law
Board
or
the
High
Court;
neither
pleaded
nor
relied
upon
before^
courts
below
and
not
even
pleaded
before
this
Court.
Finally,
it
was
prayed^
that
the
appeals
be
dismissed.It
was
also
submitted
by
learned
counsel
for
Mr.
Ashok
Mittal
that
the
appeals^
were
decided
by
the
High
Court
under
section
10 F
of
the
Companies
Act,^
1956
and
confined
to
questions
of
law.
Reliance
was
placed
on
Parmesh-
wari Prasad Gupta
(
supra).
On
the
anvil
of
decision
in
M.S. Madhusoodhanan
v. Kerala Kaumudi
(
P)
Ltd.[ 2003 ]
46
SCL
695
(SC),
the
aforesaid
3
Board
meetings^
were
vitiated
and
invalid
on
account
of
being
in
violation
of
sections
286 ,^
300
and
108
of
the
Companies
Act,
1956.
Strong
reliance
was
also
placed
on^
Firestone Tyre & Rubber Co.(
supra).It
was
also
contended
by
learned
counsel
for
Mr.
Ashok
Mittal
that
he
had
seriously^
been
oppressed
as
he
admittedly
had
substantial
interest
in
HQRL;
allotment^
of
shares
by
appellants
allotted
shares
to
themselves
without
pro
viding -
any
opportunity
of
representation
to
Mr.
Ashok
Mittal
and
also
without
providing^
any
opportunity
to
Mr.
Ashok
Mittal
to
participate
in
the
offer;
said
allotment^
was
at
gross
undervaluation
and
in
breach
of
the
fiduciary
position
of^
Mr.
R.P.
Mittal
and
Mrs.
Sarla
Mittal
as
Directors
of
HQRL;
the
3
meetings
violated^
Section
286
thereby
ipso factoinvalidating
the
meetings.
Mr.
Ashok
Mittal^
had
a
right
to
participate
in
the
offer
of
shares
to
any
extent
irrespective
of^
his
existing
equity
shareholding
of
1
share;
and
that
transfer
of
shares
by
Moral^
to
Mr.
R.P.
Mittal
was
against
loan.
Even
Mr.
Ashok
Mittal
had
granted
loan^
to
Moral
but
against
that
Moral
did
not
transfer
any
shares.
Appellants’
reliance^
on
section
81 ( 1 A)
is
unmerited.
It
was
further
contended
that
the
appellants’^
argument
of
Mr.
Ashok
Mittal
holding
only
one
share
is
manifestly
erroneous.^
The
Company
Law
Board
concluded
that
inasmuch
as
Mr.
Ashok