LexRAM PARSHOTAM MITTAL & ANR. versus M/S HILLCREST REALTY SDN.BHD. & ORS. ETC.
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
[2009] 10 S.C.R. 1121
;
RAM PARSHOTAM MITTAL & ANR.
A
v.
M/S HILLCREST REALTY SDN.BHD. & ORS. ETC.
(Special Leave Petition (Civil) Nos.1069-1071 of 2009)
JULY 20, 2009
B
[ALTAMAS KABIR AND CYRIAC JOSEPH, JJ.)
COMPANIES ACT, 1956:
Sections 3, 87(2)(b), 90(2) -
Interpretation and c
applicability of - Held: The very fact that Form 23 was filed
along with the necessary resolutions and a statement in lieu
of prospectus was filed is sufficient for arriving at a prima facie
conclusion that the company ha.s altered its status and had
become a public company - Also having regard to the
D
definition in Section 3(1 )(iii) as soon as its number of
members exceeds 50, the company loses its character as a
private company - The observations made in this case are
of prima facie nature only for disposal of the Special Leave
Petitions and not to influence the final decision in the suits -
E
However, High Court functioning as Trial Court to dispose of
~
the suits early so that the management and affairs of the
company are not left in a state of uncertainty .
.
Respondent No.3, Mis. Hotel Queen Road Pvt. ltd.,
was incorporated as a Special Purpose Vehicle from 23rd
F
August, 2001 for taking over the assets of Hotel Ashok
Yatri Niwas, which was a unit of the India Tourism
Development Corporation ('ITDC'), and to manage the
same as part of the disinvestment process initiated by the
Government of India. After the transfer of assets was G
completed through a Scheme of Arrangement of
Demerger between the ITDC and Hotel Queen Road Pvt.
ltd., which was sanctioned by the Government of India
on 5th July, 2002, the Government of India invited bids
1121
H
1122
SUPREME COURT REPORTS (2009] 10 S.C.R.
A for the purchase of 99.97% of the total voting equity share
capital of Hotel Queen Road Pvt. Ltd. The requisite
•
shares in the said Company were sold to the successful
bidder, Moral Trading and Investment Ltd., by two share
purchase agreements dated 8th October, 2002, entered
B into between the President of India, Moral Trading and
Investment Ltd. and Hotel Queen Road Pvt. Ltd. On the
same date an agreement was entered into between the
President of India and Hotel Queen Road Pvt. Ltd.,
whereby the land on which Hotel Ashok Yatri Niwas was
c erected, was leased out to the Company for 99 years.
In June, 2005, Hillcrest Realty served a notice on
Hotel Queen Road Pvt. Ltd. asking the Company to
convene an Extraordinary General Meeting (EGM) to
remove Mr. Ram Parshotam Mittal and Mrs. Sarla Mittal as
D Directors of Hotel Queen Road Pvt. Ltd. and to appoint
the nominees of Hillcrest Realty in their place. Since,
Hotel Queen Road Pvt. Ltd. declined to hold such a
meeting, Hillcrest Realty issued another notice for
holding an EGM on 4th August, 2005 for the same
E purpose. Hotel Queen Road Pvt. Ltd. thereupon filed a
Suit before the Delhi High Court for an injunction to
restrain Hillcrest Realty from going ahead with the
•
proposed meeting and from exercising voting rights
therein. Holding that the requisition for an EGM by
F Hillcrest Realty was illegal, the Single Judge, held that
any Resolution passed in the said meeting was ineffective
and that Hotel Queen Road being a private company,
Hillcrest Realty had no voting rights which it could have
exercised in the EGM.
G
Hillcrest Realty filed Suit in the Delhi High Court for
a declaration that by virtue of certain resolutions passed
by Hotel Queen Road Pvt. Ltd. on 30th September, 2002,
the Company had converted itself from a private
H company to a public company. On an interim application,
•
RAM PARSHOTAM MITTAL v. HILLCREST REALTY 1123
SDN.BHD. & ORS. ETC.
filed in the Suit by Hillcrest Realty, the Single Judge, upon
A
holding that Hotel Queen Road Pvt. Ltd. had frauciulently
concealed the fact that it had acquired the status of a
public company in the year 2002 and had obtained order
of injunction on 12th August, 2005 by virtue of such
concealment, allowed the application and permitted
B
Hillcrest Realty to vote in the meeting which was
scheduled to be held on 16th October, 2008.
Hillcrest Realty also filed an application, in the Suit
filed by Hotel Queen Road Pvt. Ltd., inter alia, for a C
declaration that Hotel Queen Road was a Public
Company and for vacation of the order of injunction
passed on 12th August, 2005. By his order dated 20th
October, 2008, the Single Judge vacated the interim order
dated 12tExcerpt shown. Read the full judgment & AI analysis in Lexace.