COSMOSTEELS PRIVATE LTD. versus JAIRAM DAS GUPTA & ORS.

COSMOSTEELS PRIVATE LTD. versus JAIRAM DAS GUPTA & ORS.

When the Supreme Court directs, under Ss. 397/398 read with S. 402 of the Companies Act, 1956, that a company purchases shares of certain members and thereby reduces its share capital, it is not mandatory to follow the procedures for capital reduction under Sections 100-104, nor to give notice to creditors, so long...

Source-derived case information.

Parties
Appellant: Cosmosteels Private Ltd.; Respondent: Jairam Das Gupta & Ors.; Intervener: Bharat Refineries (Interveners) - Niren De and S. V. Tambvekar
Jurisdiction
India
Judgment Date
16 December 1977
Procedural Posture
Civil Miscellaneous Petition / Civil Appeal / Supreme Court Appellate and Post Decree Application Stage
Outcome
Civil Miscellaneous Petition rejected; original Supreme Court order stands.
Legal Topics
Oppression and Mismanagement, Share Capital Reduction, Procedures Under Companies Act, Notice to Creditors and Government, Natural Justice
Company Law Oppression and Mismanagement Share Capital Reduction Procedures Under Companies Act Notice to Creditors and Government Natural Justice

Source-derived case record

Summary, issues, holding and outcome

More case intelligence is available

Unlock the full research layer for this judgment.

Full judgment text Legal principles 4 Authorities cited 2 Party arguments 2 Amounts and remedies 4
Sign in to unlock

Parties

Cosmosteels Private Ltd.

Appellant

Jairam Das Gupta & Ors.

Respondent

Bharat Refineries (Interveners) - Niren De and S. V. Tambvekar

Intervener

Procedural Posture

Civil Miscellaneous Petition / Civil Appeal / Supreme Court Appellate and Post Decree Application Stage

Legal Issues

  1. 1 Is it necessary to follow the procedures in Sections 100-104 of the Companies Act, 1956, for reduction of share capital when relief is granted under Section 402?
  2. 2 Is notice to company creditors or Central Government necessary where share capital is reduced by Supreme Court order under compromise terms in oppression proceedings?

Ratio Decidendi

When the Supreme Court directs, under Ss. 397/398 read with S. 402 of the Companies Act, 1956, that a company purchases shares of certain members and thereby reduces its share capital, it is not mandatory to follow the procedures for capital reduction under Sections 100-104, nor to give notice to creditors, so long as the interests of creditors are otherwise safeguarded. Notice under Section 400 to the Central Government is not required at the appellate stage if it has been previously issued at trial stage.

Court Disposition

Civil Miscellaneous Petition rejected; original Supreme Court order stands.

Orders

  • Suit Nos. 729/74 and 933/76 in Bombay High Court (filed by interveners) directed to be expedited and disposed of within six months.