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B.O.I. Finance Ltd. v. Custodian and Ors’
In the case of BOI Finance Ltd v Custodian and Ors, the argument was put before the Supreme Court that breach of RBI directions or instructions by the bank are unlikely to lead to a contract being void, where the transaction is not otherwise invalid. This would particularly be the case where a penalty was provided as a deterrent in order to prevent non-compliance.
However, notable fact in this case was that no general rule can be laid down in these matters and that one needs to look at the object of the statute on a case by case basis.
Bhagwati Developers Pvt. Ltd. V. Peerless General Finance and Investment Company Ltd. And Anr. [2005]
In this case, S.K. Roy issued and allotted 30,000 shares of Peerless to himself and his relatives, and being the majority share holder therein, hence acquired control over it.
Ajit Kumar Chatterjee (3.66% shares) and Arghya Kusum Chatterjee (1.01% shares) filed Company Petition under Sections 397 and 398 of the Companies Act 1956, before the High Court of Calcutta with the consent of M/s Bhagwati Developers Pvt. Ltd. (4.78% shares) and R.L. Gaggar (7.61% shares), alleging mis-management and oppression.
S.K. Roy contested the said Company Petition by raising the preliminary issue of maintainability, stating that the valid shares held by the petitioners and consenting parties therein, were valued at less than 10 per cent of the total shareholding, and thus, the petition itself was not maintainable. The Company Court Judge dismissed the said Company Petition as not maintainable.
Later on, both Mr. Ajit and Mr. Arghya withdrew their petition. The appellant Bhagwati Developers filed application for the purpose of recalling the order of dismissal of the said appeals, and for the transposition of the Chatterjee brothers as proforma respondents, whilst substituting the appellant as the sole appellant therein. The Division Bench rejected the plea.
What was the decision of Supreme Court? Listen Audio.
