2019] 163
Mittal
was
substantially
interested
and
invested
in
HQRL,
the
shares
ought
to
be^
allotted
(as
well
as
transferred
by
Moral)
to
him
as
well.
As
against
Hillcrest’s
investment^
of
Rs. 28 , 29 , 29 , 000 /-,
the
appellants
had
invested
only
Rs. 90
lakhs
in^
the
share
capital
of
HQRL.
The
said
3
meetings
had
a
direct
bearing
on
shareholding^
of
Hillcrest.
The
parent-subsidiary
relationship
between
Moral
and
HQRL^
was
independent
of
the
status
of
HQRL
as
a
public
company
limited
by
shares^
and
as
a
consequence
of
the
shareholders’
resolution
dated
30. 9. 2002.
The^
appellants
sought
to
negate
not
only
the
rights
of
Mr.
Ashok
Mittal
but
also
voting^
rights
of
Hillcrest.
That
the
appellants
had
limited
financial
investment
in^
HQRL.
Factually,
there
was
no
substantial
investment
by
Moral
out
of
its
own^
funds
in
HQRL;
whereas
Hillcrest
and
Mr.
Ashok
Mittal
had
substantially
invested^
in
HQRL.
That
the
appellants’
reliance
on
FEMA
is
erroneous.
Before
dilating
on
the
issue
of
validity
of
aforesaid
three
impugned
reso
lutions, -
it
is
a
common
ground
and
it
was
stated
by
learned
counsel
appearing
for^
the
parties
that
two
civil
suits
are
pending
consideration;
one
being
OS
No. 992 / 2005
filed
by
HQRL
for
injunction
to
restrain
Hillcrest
Realty
from
proceeding^
with
the
proposed
resolutions
of
EOGM
and
from
exercising
voting
rights^
therein;
the
other
Suit
No. 1832 / 2008
seeking
declaration
that
HQRL
had
become^
a
limited
company
by
virtue
of
the
resolution
passed
on
30. 9. 2002.
The
matter^
travelled
to
this
Court
in
the
matter
of
grant
of
injunction
which
has
been^
decided
in
Ram Parshotam Mittal(
supra).
Rival
contentions
were
raised
before^
this
Court
as
to
whether
HQRL
is
a
private
limited
or
public
limited
company.^
This
Court
has
observed
that
the
decision
on
the
aforesaid
question
would^
be
dependent
upon
the
decision
of
the
issue
whether
by
resolution
adopted^
on
30. 9. 2002 ,
HQRL
had
lost
its
private
character
and
had
been
con
verted -
into
a
public
limited
company.
While
the
issues
are
the
same
in
the
two
suits,^
this
Court
has
observed
that
the
interim
order
dated
12. 8. 2005
had
been
obtained^
by
suppression
of
material
facts
and
prima faciefinding
recorded
by^
the
Division
Bench
of
the
High
Court
was
that
by
resolution
adopted
on
30. 9. 2002 ,^
HQRL
had
shed
its
private
character
and
had
been
converted
into
a^
public
limited
company.
This
Court
without
meaning
to
decide
the
issue
finally^
prima facieobserved
that
an
application
was
filed
before
the
Registrar
in^
Form
23
along
with
resolution
dated
30. 9. 2002
is
sufficient
to
arrive
at
aprima facie
conclusion
that
HQRL
had
altered
its
status
and
had
become
a
public^
company.
It
was
further
observed
by
this
Court
that
since
the
number
of^
members
exceeded
50
as
the
shares
were
said
to
have
been
allotted
to
134
persons^
on
30. 9. 2002 ,
prima facieHQRL
lost
its
private
character.
However,
this^
Court
also
observed
significantly
as
this
issue
has
to
be
decided
in
the
two
pending^
suits,
it
would
not
be
proper
for
this
Court
to
dwell
into
the
question
further.^
This
Court
held
that
considering
the
explanation
to
section
87 ( 2 )(
b)
gives^
Hillcrest
as
a
cumulative
preference
shareholder
the
right
to
vote
on
every^
resolution.
This
Court
also
made
it
clear
that
the
observations
wereprima facie
in
the
nature
of
limited
only
for
disposal
of
special
leave
petition
and^
should
not
influence
the
final
decision
in
the
suits.
The
question
relating
to^
HQRL
whether
it
is
a
private
or
public
company
has
been
left
open
forRam Parshotam Mittal
v.
Hotel Queen Road (P.) Ltd. (SC)