KAMAL KUMAR DUTTA AND ANR. versus RUBY GENERAL HOSPITAL LTD. AND ORS.

Citation: [2006] SUPP. 4 S.C.R. 462 · Decided: 11-08-2006 · Supreme Court of India · Bench: H.K. SEMA · Disposal: Appeal(s) allowed

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Judgment (excerpt)

A 
B 
c 
KAMAL KUMAR DUTTA AND ANR. 
RUBY GENERAL HOSPITAL LTD. AND ORS. 
AUGUST 11, 2006 
[H.K. SEMA AND A.K. MATHUR, JJ.] 
letters Patent Appeal: 
Civil Procedure Code, 1980; 
Section lOOA-Appeal-Vested right-C'essation of-Held, can be taken 
aw~ by a subsequent enactment either expressly or by necessary intendment, 
after the insertion of section I OOA where appeal has been decided from an 
original order by a single Judge, no further appeal has been provided and 
D that power which used to be there under the Letters Patent of the High Court 
has been subsequently withdrawn. 
Interpretation of statutes; 
Statement by the law Minister made on the floor of the House or the 
E letter of the Law Minister-Held: change the words and intendment of a 
Statute which is borne out from the words and the same has to be given its 
natural meaning. 
F 
The Companies Act, 1956; 
Sections 397 & 398-0ppression and mismanagement-Held, on facts, 
clear case of oppression and mismanagement made out. 
The respondent company was promoted by two non-resident Indian 
Doctors, the appellants (holding 52. 74% of the equity shares in the said 
company) along with respondent no.2, who is the younger brother of appellant 
G no.I who were first directors of the company. Appellant no.I contributed Rs. 
4.26 crore out of which equipments worth Rs. 3.5 crore were brought from 
USA for which he was to be allotted shares. Though the Reserve Bank of India 
granted permission on 22.3.1997 to allot shares in favour of appellant no. I 
but the same was withdrawn on 20.5.1998 at the instance of the company. The 
H 
462 
KAMAL KUMAR DUTT Av. RUBY GENERAL HOSPITAL LTD. 
463 
company filed a writ petition challenging the said approval by the Reserve A 
Bank of India before the High Court of Calcutta. The High Court directed to 
give personal hearing to the parties and the Reserve Bank of ,India once granted 
approval for allotment of shares in favour of appellant no. 1. The said approval 
was again challenged by the company by filing a writ petition before the High 
Court. Then again some directions were not properly followed and another B 
writ petition was filed by the company. In compliance to the directions issued 
by the High Court, the Reserve Bank of India after hearing the parties passed 
an order granting permission to allot shares to the appellant no.I against 
supp)y of second hand medical equipment as capital contribution. Subsequently, 
a writ petition was filed by the company in 2004 before the High Court of 
Calcutta and the same is said to be still pending. The main grievance of C 
appellant no.I was denial of his shares for supply of medical equipments worth 
Rs. 3.5. crore and consequential ousting from the chairman and directorship 
of the company for which an 11pplication under Sections 397 & 398 of the 
Companies Act, I956 (hereinafter to be referred to as the Act) was filed 
alleging various acts and oppression and mismanagement in the affairs of 
the company before the CLB and inter alia praying that necessary directions D 
may be given to relieve the company from mismanagement of the respondents 
and to relieve the oppressive, harsh and unreasonable conduct of the 
respondents on the appellants and other members of the company and to stop 
such acts or conducts of the respondents which are prejudicial to the interest 
of the shareholders of the company and the public at large; to direct the E 
respondents to comply with the statutory provisions of the Act to serve the 
notice of the Board of Directors meetings of the company and the meetings of 
the shareholders of the company on the appellants and other shareholders; 
the appellants should be involved in the effective management of the affairs of 
the company; to remove the Managing Director (respondent no.2) from the 
company and to prohibit him from interfering with the effective management F 
of the company; to quash the allotment and issue of the shares of the value of 
Rs. 42, I0,000/- allotted illegally and unlawfully by the respondents to 
corporate shareholders, to direct the respondents to restore the shares of 
the appellants which are shown as share application money by illegal and 
unlawful entries, to direct the respondents for allotment of shares for the G 
sum of Rs. 3,05,53,290/- to appellant no.I being the value of the goods already 
supplied and to appoint an independent observer to attended the meetings of 
the board of Directors and the meeting of the shareholde

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