DOYPACK SYSTEMS PVT. LTD. ETC. versus UNION OF INDIA & ORS., ETC.

Citation: [1988] 2 S.C.R. 962 · Decided: 12-02-1988 · Supreme Court of India · Bench: SABYASACHI MUKHERJI · Disposal: Disposed off
Cited by 10 judgment(s) · cites 12 · see the full citation network in Lexace
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Judgment (excerpt)

A 
DOYPACK SYSTEMS PVT. LTD. ETC. 
v. 
UNION OF INDIA & ORS., ETC. 
FEBRUARY 12, 1988 
B 
[SABYASACHI MUKHARJI AND G.L. OZA, JJ.] 
Swadeshi Cotton Mills Company Limited (Acquisition and Trans-
fer of Undertakings) Act, 198~Whether under section 3 thereof equity 
shares in Swadeshi Polytex Limited and Swadeshi Mining and 
Manufacturing Company vest in the Central Govt. and whether the 
C immovable properties have also vested in the Govt. under the said 
section. 
What fell for consideration in all these matters, viz., (i) SLPs. 
(civil) Nos. 4826 and 7045of1987, (ii) SLP (civil) No. 5240of1987, (iii) 
C.M.Ps. Nos. 12029-31/87 (in CAs Nos. 577-79 of 1987), (iv) C.M.Ps. 
D 
Nos. 16635 and 16918/87 (in S.L.P. (c) No. 4826/87) and (v) Transfer-
red Cases Nos. 13 and 14 of 1987 (with CMPs. Nos. 16887-89 and 
17018/87), was a common question of law-whether equity shares in 
two companies, i.e. 10,00,000 shares in Swadeshi Polytex Ltd. and 
17, 18,344 shares in Swadeshi Mining and Manufacturing Company 
Ltd., held by the Swadeshi Cotton Mills, vested iu the Central Govern-
E 
ment under section 3 of the Swadeshi Cotton Mills Company Ltd. 
(Acquisition and Transfer of Undertakings) Act, 1986. The other sub-
sidiary question was whether the immovable properties, namely, 
bungalow No. l a,nd Administrative Block, Civil Lines, Kanpur, had 
also vested in the government. 
'r 
F 
There were six original proceedings initiated by various parties 
< 
which gave rise to these civil appeals, special leave petitions and trans-
ferred cases before this Court. These were: 
~-
On 18th February, 1987, a suit was filed before the Delhi High 
Court by one Naresh Kumar Barti against Dr. Raja Ram Jaipuria, 
G 
Swadeshi Polytex and others, for an injunction restraining the company 
from holding the 17th annual general meeting on the ground that 34% 
shares in the Swadeshi Polytex vested in the National Textile Corpora· 
tion (N. T.C.) in view of sections 3 and 4 of the Act. In the suit, an 
application was also filed praying that in the event of the annual general 
meeting of the company being allowed to be held, an independent 
H 
Chairman should be appointed to conduct the meeting. The High Court 
962 
• 
..... 
DOYPACK SYSTEMS v. U.0.1. 
963 
-( refused to pass any order (in view of an order already passed by the 
A 
Allahabad High Court). Against this order of the Delhi High Court, two 
special leave petitions were filed in this Court one by Doypack Systems 
Pvt. Ltd. (defendant No. 10 in the Delhi Suit), which came to registered 
"t 
as Civil Appeal No. 577 of 1987 after the grant of special leave, and the 
other, by Naresh Kumar Barti, the plaintiff in the Delhi Suit, which 
came to be registered as Civil Appeal No. 578 of 1987 aftt:r the grant 
of special leave. 
B 
On 24th February, 1987, one Bari Prasad Aggarwal filed a suit in 
-
the court of the Third Additional Civil Judge, Kanpur praying inter alia 
.. 
that Shri Raja Ram Jaipnria should not preside over the l7th annual 
I'- general meeting of the company. The application for an interim injunc-
c 
~tion filed in the suit was dismissed. In the appeal preferred by the 
plaintiff before the Allahabad High Court, an order was passed by the 
High Court on 2nd March, 1987, appointing Shri M.P. Wadhawan as 
the Chairman of the said annual general meeting. Against this order 
dated 2nd March, 1987, passed by the Allahabad High Court M Is. 
D 
,.-~ 
Doypack System Pvt. Ltd., preferred a special leave petition in this 
Court, which after the grant of leave, was registered as Civil Appeal 
No. 577 of 1987. The three special leave petitions were heard together as 
Civil Appeals Nos. 577, 578 and 579 of 1987 and disposed of by this 
Court by a common order on 6th March, 1987, appointing Shri Jaswant 
'f 
Singh as the Chairman of the said annual general meeting. 
E 
-
On 26th February, 1987, another suit-Suit No. 506 of 1987-was 
filed in the Delhi High Court by Mukesh Bhasin for a declaration that 
• 
Swadeshi Cotton and Swadeshi Mining had no right in respect of 34% of 
the share-holdings in Swadeshi Polytex and that the said shares were 
) 
vested in the N.T.C. by virtue of the said Act. By order dated 9th 
March, 1987, the High Court disposed of that application aud granted 
F 
.,_~injunction restraining defendants Nos. 3 and 4 in that suit from exercis-
ing any right whatsoever attached to the 34% shares of defendant No. 2 
held by them and particularly any voting right in the annual general
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