N. PARTHASARATHY ETC. versus CONTROLLER OF CAPITAL ISSUES AND ANOTHER ETC.

N. PARTHASARATHY ETC. versus CONTROLLER OF CAPITAL ISSUES AND ANOTHER ETC.

Consent given by Controller of Capital Issues for debenture issue of Larsen and Toubro was done after due consideration based on special resolution and statutory requirements; cannot be varied contrary to prospectus or without company resolution. Preferential allotment to shareholders of interconnected companies, with valid special resolution, is legally permissible. Public financial institutions must act in public interest when transferring controlling shares. The Public Interest Litigation is maintainable, but relief for recovery of shares does not survive since financial institutions have already bought back shares.

Parties
Petitioner: N. Parthasarathy; Respondent: Controller of Capital Issues; Respondent: Another
Jurisdiction
India
Judgment Date
16 April 1991
Procedural Posture
Writ Petition/appeal / Final Judgment on Transferred Petitions and Appeals
Legal Topics
Preferential Allotment of Debentures, Controller of Capital Issues Consent, Transfer of Shares by Public Financial Institutions, Public Interest and Business Monopoly, Variation of Consent Orders, Public Interest Litigation Maintainability
Constitutional Law Company Law Monopolies and Restrictive Trade Practices Public Interest Litigation Preferential Allotment of Debentures Controller of Capital Issues Consent Transfer of Shares by Public Financial Institutions Public Interest and Business Monopoly +2 more

Case Brief

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Legal principles 5 Party arguments 2
Sign in to unlock

Parties

N. Parthasarathy

Petitioner

Controller of Capital Issues

Respondent

Another

Respondent

Procedural Posture

Writ Petition/appeal / Final Judgment on Transferred Petitions and Appeals

Legal Issues

  1. 1 Whether consent by Controller of Capital Issues for debenture issue was given after due consideration and application of mind
  2. 2 Whether variation of consent order is permissible without statutory compliance
  3. 3 Whether preferential allotment to shareholders of interconnected companies is valid

Ratio Decidendi

Consent given by Controller of Capital Issues for debenture issue of Larsen and Toubro was done after due consideration based on special resolution and statutory requirements; cannot be varied contrary to prospectus or without company resolution. Preferential allotment to shareholders of interconnected companies, with valid special resolution, is legally permissible. Public financial institutions must act in public interest when transferring controlling shares. The Public Interest Litigation is maintainable, but relief for recovery of shares does not survive since financial institutions have already bought back shares.