Case: Banoo J. Coyajee Vs. Shanta Genevieve Prommeret Parulekar

SUJATA MANOHAR, J.(1) This group of six appeals is filed against an order and judgment of a learned Single Judge dated 13th January 1988 in the Company Petition No. 476 of 1986 as also against an order of the learned Single Judge dated 30th March 1988 in two Company Applications Nos. 93 of 1988 and 110 of 1988 in Company Petition No.(2) Company Petition No. 476 of 1986 was filed by Shanta Genevieve Pommeret Parulekar and Claude-Lila Parulekar (hereinafter called the original petitioners) against Sakal Papers Private Limited and various other respondents as set out in that petition praying for rectification of the Register of Members of the 1st respondent Company in the following manner : (I) The names of original respondents Nos. 5, 6, 8, 11, 12, 13 and 14 (hereinafter referred to as "the purchasers") be removed from the register of Members of the 1st respondent Company in respect of 3417 shares belonging to the estate of Dr. N. B. Parulekar and 93 shares belonging to the 3rd respondent: (II) the names of respondent Nos. 11, 12, 13, 15 and 16 be removed from the Register of Members of the 1st respondent Company in respect of 17,666 shares and for other ancillary reliefs.(3) THE learned Single Judge who heard the petition by his judgment and order dated 13th January 1988 has allowed the petition. He has however, directed the 2nd petitioner to bring into Court a sum of Rs. 80,73,000/- within a period of six weeks. He has clarified that his order shall become operative on this amount being deposited in Court within the stipulated period. If the amount is not deposited, the petition is dismissed. On such amount being deposited he has directed the 1st respondent Company to comply with directions under prayers (a) and (b) and he has directed respondents Nos. 5, 6, 8, 11, 12, 13, 14, 15 and 16 to comply with the orders and directions under prayers (c) and (d ). He has also directed respondent Nos. 11, 12, 13, 15 and 16 a sum of Rs.17,66,600/- in respect of 17,666 shares returned to the Company as per prayer (b) and directed that 17,666 shares shall remain in the custody of the 1st respondent Company till such time as the Board of Directors as re-constituted after rectification, decides the price and the parties to whom these shares should be allotted. He has also given certain other directions. The petitioners did not deposit in Court the said sum of Rs.80,73,000/- within the stipulated period. They applied for extension of time by taking out Company Application Nos. 93 of 1988 and 110 of 1988. These applications have been rejected by the learned Single Judge by his judgment and order dated 30th April 1988. The present appeals are filed by various parties in respect of these two judgments and orders of the learned Single Judge.(4) APPEAL No. 742 of 1988 is an appeal filed by the original petitioners against the judgment of the learned Single Judge dated 13th January, 1988 conditionally allowing the main Company Petition No. 476 of 1986. Appeal No. 655 of 1988 is filed by the executors and trustees of the will or Dr. Parulekar against certain findings given by the learned Single Judge against them in his judgment and order dated 13th January 1988. Appeal No. 711 of 1988 is filed by the purchasers of 3417 shares sold by the executors and trustees under the will of Dr. Parulekar as also of 93 personal shares of some of the executors sold by them, against the finding given by the learned Single Judge in his judgment and order on 13th January 1988. Appeal No. 710 of 1988 is another appeal filed by these purchasers against certain finding given by the learned Single Judge in his order dated 30th March 1988 dismissing the Company Applications for extension of time. Appeal No. 1214, of 1988 is an appeal filed by the 1st respondent Company against the findings given by the learned Single Judge against it in his judgment dated 13th January 1988 while Appeal No. 1032 of 1988 is another appeal filed by the 1st respondent Company against the finding given by the learned Single Judge against the Company in his judgment rejecting the application for extension of time. acts:(5) IN order to appreciate the contentions raised by the parties in these appeals it is necessary to examine the relevant facts. The 1st petitioner in Company Petition No. 476 of 1976 is the widow of Dr. Parulekar, who died on or about 8th January 1973. Dr. Parulekar, was the founder of the 1st respondent Company. The first petitioner is a shareholder and a permanent Director of the 1st respondent Company. The Second petitioner is the daughter of Dr. N.B. Parulekar and the 1st petitioner. She is also a shareholder of the 1st respondent Company. The 1st respondent Company was incorporated in 1948. It carries Parulekar and the 1st petitioner. She is also a shareholder of the 1st respondent Company. The 1st respondent company was incorporated in 1948. It car on the business of publishing a news-paper called Sakal from Pune, Bombay and Kolhapur. Dr. (Mrs.) Banoo J. Coyaji, Jasvantlal Matubhai and Arun Jasvantlal are respondents Nos. 2, 3 and 4. These respondents and the 1st petitioner are the executors of the last Will and Testament of Dr. N. B. Parulekar. The original 5th respondent is the Managing Director of the 1st respondent company. The other respondents are the current shareholders and/or directors of the 1st respondent company. The 10th respondent is the Chairman of the 1st respondent company.(6) The authorised share capital of the 1st respondent Company is Rs.25 lakhs consisting of 25,000 equity shares in the face value of Rs.100/- each. The issued share capital of the 1st respondent company, however, was only 734 shares of the face value of Rs.100/- each prior to November 1985. Disputes is the Company Petition No. 478 of 1976 related to 3411 shares of the deceased Dr. Parulekar which were held by the executors of the Will of Dr. Parulekar at the material time and 93 shares then held in trust by original respondents Nos. 3 and 4 jointly in their own right.(7) AS on 21st September 1985 the share-holding of the 1st respondent Company was as follows :"first petitioner 560 Shares; second petitioner 1172 Shares; second respondent 750 Shares; third respondent 93 Shares; executors of the will of the deceased 3416 Shares; the Trustees of Lila Trust 1317 Shares; image Advertising and marketing Pvt. Ltd. 25 Shares;making a total of 7334 shares. The two petitioners had thus 23% of the shares of the 1st respondent Company as of this date.(8) Under Article 57 of the Articles of Association of the 1st respondent Company it is provided as follows :"57-A. In the event any member of Company desires to transfer his shares he shall be bound to offer the share either to Dr. N. B. Parulekar or to Madame Shanta Parulekar or such other persons or persons as Dr. N. B. Parulekar or Madame Shanta Parulekar may direct or may nominate and in which event the transferee or transferees shall pay such price as may be certified by the Auditors of the Company. "(9) ARTICLE 58 further provides that subject to Article 57-A no shares shall be transferred so long as any members of any person selected by the Directors as one to whom it is desirable, in the interest of the Company, to admit to membership, is willing to purchase the same at the fair value as mentioned in Article 61 therein below. Under Article 61, in case any difference arises between the Transferor and the Purchaser as to the fair value of a share, the Auditors of the Company shall certify in writing the sum which, in there opinion , is the fair value and the same shall be binding on the transferor and the purchaser.(10) UNDER the terms of the Will of Dr. Parulekar, 3417 shares in the 1st respondent Company which formed a part of Dr. Parulekars residuary estate, were directed to be held on Trust by the executors/trustees :" (1) for the spread of education through newspapers, magazines and periodicals, (2) for effecting improvement of the quality and standard of journalism and training of personal in journalism. (3) for purchase of shares of concerns, firms, companies or from person or persons interested in or concerned with newspapers, magazines, periodicals and otherwise in journalism; (4) for publication of books and literature for masses at low and reasonable prices and (5) for such other objects and acts that may be necessary to bring about improvement of information amongst the massess. . . . . " the Will directed that the above trust shall be known as the Sakal Papers Trust".(11) THE Executors of the Will of Dr. Parulekar gave a notice dated 18th November, 1984 of a meeting of the executors to be held on 27th November, 1984 for the purpose of passing resolutions to enable the executors holding 3417 shares of the 1st respondent Company to sell these shares at or for the price of Rs. 2250/- per share (which was the offer then received by the executors) or at such price as may be realised under Article 61 of the Articles of Associations of the Company. The second resolution which was proposed was to the effect that the executors had given a notice to the 1st petitioner under Article 57-A for the sale of these shares. In the event of the 1st petitioner (being a party named under Article 57-A exercising her rights under Article 57-A, the executors do sell the shares to her at the above mentioned price. The resolution further stated that if the 1st petitioner exercised her rights under Article 57-A but did not agree to the aforesaid price, then the sale should take place at a price to be fixed in accordance with Article 57-A Lastly it was proposed that if the 1st petitioner did not exercise her rights and did not put the shares at a price fixed under Article 61, then the executors shall sell the shares to any other person or persons at or for the price of Rs. 2250/- per share.(12) A Notice of the meeting containing the above agenda was served on all the executors including the 1st petitioner. Thereupon the second petitioner wrote a letter dated 27-1-1984 tot he third respondent stating that 1st petitioner would not be able to attend the meeting convened on 27th November on account of her meeting by two weeks. This request was considered by the executors who were present at the meeting held on 27th November, 1984. They felt that the meeting need not be postponed because the resolutions proposed to be moved regarding the sale of 3417 shares of the 1st respondent did no jeopardise the interests of the 1st petitioner. The proceeded with the meeting. The proposed resolutions were thereafter passed at the meeting.(13) BY notice dated 29th May, 1984, addressed to the 1st petitioner the executors of late Dr. Parulekar gave notice to the 1st petitioner under Article 57-A of the Articles of Association. The notice mentioned that the executors desired to transfer 3417 shares of the 1st respondent Company at the offered price of Rs. 2250/- or at a fair value that may be determined by the auditors under Article 61. The notice further stated that if the petitioner chose not to exercise her right under Article 57-A or was not willing to pay the fair price as may be fixed by the auditors, the executors would be free to sell the same to any other person in accordance with the articles.(14) THE 1st petitioner, by her letter dated 14th December, 1984, accepted the offer made on behalf of the executors. She agreed to purchase 3417 shares at a price as may be certified by the Companys Auditors. She nominated her daughter, the 2nd petitioner, as a nominee under Article 57-A for the purchase of these shares.(15) Similarly a Notice dated 10th November 1984 was given to the 1st petitioner as well as the Board of Directors of the 1st respondent Company by respondents Nos. 3 and 4 in respect of the 93 shares held by them in the 1st respondent company, offering to sell these shares to the 1st petitioner.(16) THEREUPON the 1st respondent Company gave a notice to all its shareholders to the effect that the said 3417 shares as also 93 shares of respondents 3 and 4 were proposed to be sold by these persons. Under Article 57-A, an offer had been made to the 1st petitioner for the purchase of these 3417 plus 93 shares and the 1st petitioner had been given time till 15th December 1984 for indicating her intention. The notice further stated that the Board of Directors had resolved that in the event of 1st petitioner not exercising her rights under Article 57-A, it had been decided to sell the said structures to the existing shareholders of the Company. In accordance with the Articles of Association of the 1st respondent Company, each shareholder was therefore asked to send his or her reply to the Company by 28th December 1984 as to whether he/she was willing to purchase the said shares in toto in accordance with the Articles of Association.(17) AS the 1st petitioner and/or her nominee agreed to purchase the said shares at a price certified by the auditors of the Company, the matter was referred to the Companys auditors M/s. G. M. Oka and Co., for determining the fair value of the shares.(18) THE auditors by their letter dated 28th January, 1985 asked the 1st petitioner whether she wished to submit any information for the purpose of determining the fair value of these shares. She was requested to make her written submission within 7 days. At the request of the 1st petitioner, this time was extended upto 20th February 1985. On 20th February, 1985 however, she wrote to the auditors, saying that the auditors request to make a written submission was premature. The auditors should have prepared a draft report of the valuation of these shares along with the draft certificate and sent it to her for her submissions. This letter is dated 20th February, 1985. It is clear when this letter was received by the auditors. In any event, the auditors issued a certificate dated 21st February 1985 under Article 57-A of the Articles of Association certifying that the price to be paid for the transfer of 93 shares was Rs. 2,10,273/- and for 3417 shares was Rs. 77,25,857/ -. The price was calculated at the rate of Rs. 2160/- per share. The petitioner protested against this valuation contending, inter alia, that an adequate opportunity was not given to them for making submissions and there was denial of natural justice. They also challenged the fair value as fixed by the auditors.(19) THEY filed a suit on 2nd March, 1985 in the Court of the Civil Judge, Junior Division, Pune, being Suit No. 624 of 1985, for a permanent injunction restraining the executors, that is to say, respondents Nos, 2, 3 and 4, from selling the said shares to any one other than the petitioners. No interim order however, was granted in this suit. Thereafter on 9th September 1985 the executors sold and transferred 3417 shares to respondents Nos. 8, 11, 12, 13 and 14 for the price of Rs. 78,59,100/ -. The price was arrived at on the basis of each share being valued at Rs. 2300/ -. The third and 4th respondents also sold their 93 shares at the same price to respondents 5 and 6. Thus the shares actually fetched a higher price than that fixed by the auditors.(20) ON 20th September, 1985 the transfer forms in respect of 3417 and 93 shares were lodged with the 1st respondent Company. At the meeting of the Board of Directors of the 1st respondent Company held on 21st November 1985 the transfer of these shares was approved. The Board of Directors resolved to register of these shares in the name of the transferees. At this meeting respondent No. 3 ceased to be the Chairman and Director of the Company and respondent No. 2 was appointed as Chairman of the Board in his place. Respondents Nos. 5 and 10 were appointed as Additional Directors of the 1st respondent Company. Notice of this Board meeting was sent to the petitioners. The petitioners attended the Board meeting. But they walked out after protesting against the insufficiency of notice of the Board meeting. The item relating to the transfer of these shares was not shown on the Agenda of the Board meeting. This business appears to have been transacted under the heading "any other business".(21) Prior thereto, at the Annual General Meeting of the Company held on 16th November 1985 a resolution was passed on 16th November, 1985 a resolution was passed to increase the issued share capital of the company from Rs. 7,33,400 to Rs. 25 lakhs. The resolution also authorised the Board of Directors to allot and issue 17160 new shares at par to any person, whether a member of the Company or not. Once again the agenda of the Annual General Meeting did not show that any new shares were proposed to be issued or allotted. Hence at the Annual General Meeting it was resolved that in view of the lack of notice for the resolution. The resolution should be ratified at an extraordinary General Meeting to be convened for this purpose. This has been done. These resolution for issuing fresh shares were carried by a majority of votes. 4260 votes were cast for the resolutions and 3104 against the resolutions. At the Board meeting held immediately after this Annual General Meeting, the board resolved to issue additional 17,666 shares at par to respondents Nos. 11, 12, 13, 15 and 16.(22) AS a result, the purchasers and/or allottees who are admittedly controlled by respondent Nos. have now a substantial holding in the 1st respondent Company. They together hold 21,926 shares out of 25,000 shares of the 1st respondent Company.(23) THEREAFTER a meeting of the Board of Directors held on 2nd February, 1986. The 5th respondent was appointed as the Joint Managing Director of the 1st respondent Company. At this meeting it was also proposed to appoint the 2nd petitioner as a Joint Managing Director along with respondent No. 5. The 2nd petitioner declined to accept the offer. The Board however, decided to keep this offer for consideration at the next Annual General Meeting of the Company. Although the petitioner had initially declined to act as Joint Managing Director, she ultimately accepted the arrangement and she was appointed as Joint Managing Director. Although she assumed duties as Joint Managing Director, she has not so far signed the requisite agreement relating to her appointed. Company Petition No. 476 of 1986.(24) The petitioner filed present Company Petition on 28-8-1986 challenging the transfer of 3417 shares and the issuance of 17,666 new shares. The petition is filed under section 155 of the Companies Act. under section 55, "if the name of any person is, without sufficient cause, entered in the register of members of a company, or after having been entered in the register is, without sufficient cause, omitted there from,. . . . . . . . the person aggrieved, or any member of the company, or the company, may apply to the Court for rectification of the register. "under sub-section (3), on an application under this section, the Court may decide any question relating to the title of any person who is a party to the application, to have his name entered in or omitted from the register. The Court also has the power to generally decide any question which it is necessary or expedient to decide in connection with the application for rectification. Transfer of 3417 Shares.(25) THE 1st challenge of the petitioners relates to the transfer forms which have been signed by the executors in respect of 3417 shares transferred by them. In the share transfer form, the four executors namely, the 1st petitioner and respondents 2, 3 and 4 are shown as transferors. The transfer forms however, are only signed by three out of four executors namely, respondents 2, 3 and 4. The petitioners contended that as the 4th transferor has not signed the transfer forms, these transfers are bad in law and ought not to have been registered. The executors rely upon the fact that under the terms of the Will, the executors have the like powers which are contained in the declaration of trust dated 28th June, 1972 and the deed of settlement dated 31st July, 1972. Under them the trustees are entitled to act by majority. The petitioners further submit that the executors of the trust have, at their meeting of 27-11-1984, passed a resolution to the effect that any one of the executors may be authorised to implement the resolution and also to take steps to execute the transfer forms and complete the transaction of sale. According to the executors therefore, three of the executors can sign the transfer forms for the purpose of validly transferring the said shares to the transferees.(26) Now, it is true that the transfer forms do not have an endorsement to the effect that the three executors have signed on behalf of all the executors. Nor does the transfer form state that the form is signed by the three executors pursuant to the authority given to them under a resolution passed at their meeting held on 27-11-1984. But the fact remains that in view of the terms of the said will read with the deeds of trust referred to therein, the trustees, for the purpose of selling these shares and for conducting any other business, were entitled to act by a majority. The trustees had therefore, the power to sell these shares, on the basis of a decision taken by the majority of trustees. The trustees have also passed a resolution authorising any one of them to execute the transfer forms for the purpose of implementing their resolution to sell the said shares. It is therefore not necessary for all the trustees to sign the transfer forms.(27) Under section 108 of the Companies Act a company shall not register a transfer of shares unless a proper instrument of transfer duly stamped and executed by or on behalf of the transferrer and by or on behalf of the transferee has been delivered to the company alongwith the certificate relating to the shares. In the present case the transfer form is signed by three transferrers. Under the resolution of the trustees executors any one of the executors was entitled to sign the transfer forms. Hence the three executors who have signed transfer forms have done so as transferrers in valid exercise of power under the said resolution. At the highest the only defect is that they have not stated that they have signed the transfer forms on behalf of all the executors or in exercise of their authority under the said resolution. This, in our view, is, at the highest, only an irregularity which can be easily corrected by the transferrers. In these circumstances it would be futile to invalidate the registration of transfer of these shares when the transferrers can immediately submit fresh transfer forms signed by them on behalf of all the transferrers. As set out in the case of (Killick Nixon Ltd. v. Dhanrai Mills P. Ltd.) reported in 54 Company Cases 532 at pages 465, (A judgment to which one of us was a party), the Court should not accept any invitation to indulge in a futile exercise under section 155. The provisions of this section are not meant for correcting procedural errors.(28) IN the case of (Bentely-Stevens v. Jones and others) reported i 1974 (2 ). ER 653 there were irregularities in convening an extraordinary general meeting of the Company at which the plaintiff was removed as a director. The Court held that it would not grant an interlocutory injunction in respect of the irregularities which could be cured by going through the proper processes. If, for example, the proceedings that followed the board meeting were invalid because proper notice had not been given the invalidity could be occurred by the giving of a valid notice. The Chancery Court cited with approval the pronouncement of Lindley L. J. in (Browne v. La Trinidad) :"i think it is most important that the Court should hold last to the rule upon which it has always acted, not to interfere for the purpose of forcing companies to conduct their business according to the strictest rules, where the irregularity complained of can be set right at any moment. "applying the same principles here the irregularity if any, in signing transfer forms can be easily set right by the trustees signing the transfer forms under the authority given to them under the resolution passed at the meeting of executors and trustees relevant to earlier. Trustees power to act by a Majority:(29) IT was submitted on behalf of the petitioners by Mr. S. J. Shah, that the majority cannot ride roughshod over a minority. Even when the trustees have the authority to act by majority, their decision has to be taken only after discussion with the minority. In support the cited the case of (Fakira Krishnaji v. Ganpat Sakharam and others) reported in A. I. R. 1954 Nag. 92. A learned Single Judge of this Court in that case observed that the majority decision, in order to be binding on the entire body of the trustees, should have been arrived at after due deliberation by all the trustees. Where it was an act of the majority alone it will not be binding on the minority. The ratio of this judgment does not apply to the present case. Because the notice of the meeting of the executors/trustees was sent to the 1st petitioner also. The notice clearly set out the purpose for which the meeting had been called. The 1st petitioner was therefore, aware of the reason for convening the meeting. She had returned to the house from hospital at the time when the meeting was called. Her stand on the subject under discussion was also familiar to the trustees. In fact, even now she has not challenged the decision taken by the majority of executors at this meeting to offer 3417 shares for sale. Nor has she challenged the consequent decision taken by the majority of offer the shares to her in view of the provisions of Article 57-A of the Articles of Association of the Company. There is therefore no question of the 1st petitioner contending that the majority decision of the trustees is not binding on her. In fact she has acted on the decision by accepting the shares offered to her at a valuation to be fixed by the auditors. Offer to other shareholders:(30) It has also been contended that the offer made to all other shareholders of the Company in the event of the petitioners not exercising their right under Article 57-A is defective. This contention also can not be accepted. The Company did inform all its share-holders that the trustees were proposing to sell the shares in question and that in the event of the petitioners not exercising their right under Article 57-A, the shares would be available for purchase by the other shareholders. None of the other shareholders showed any interest in purchasing these shares. It was submitted before us that the 2nd petitioner, being a share-holder, could have purchased these shares in her own right even if she had declined to purchase these shares as a nominee of the 1st petitioner, under Article 57-A. There is however, no material before us which would indicate that she had, at any time, informed the company that she proposed to exercise her rights as a shareholder to purchase these shares. Throughout, even in various litigations which are pending, her claim has been to enforce her rights under Article 57-A as a nominee of the 1st petitioner. There is therefore no basis for the submission that the 2nd petitioner had exercised her rights as an ordinary shareholder to purchase these shares. Valuation by the Auditors :(31) IT is contended by Mr. S. J. Shah, learned Counsel for the petitioners, that the petitioners were not bound by the valuation of these shares made by the auditors because the valuation was not fair. Under Article 61 of the Articles of Association the auditors are required to certify in writing what, in their opinion, is the fair value of the shares in case there is any difference between the transferrer and the purchaser as to the fair value of a share. The article further provides that in fixing this fair value the auditors shall be considered as acting as an expert. As observed in Ponningtons Company Law at p. 817. "if the pre-emption clause required the shares to be offered to the other members at a fair value certified by the directors of the Companys auditor, the Court cannot enquire into the correctness of the valuation, unless there is evidence that it was not honestly made, or unless the person who made it set out the reasons for his valuation and those reasons show that he did not apply the proper principles. . . . . . . . And in that situation the transferors only remedy is to the persons who made the valuation for the difference between the valuation and the real value of the shares as damages in an action for negligence."(32) In the case of (Baber v. Kenwood Manufacturing Co. Ltd. and Whinney Murray and Co.) 1978 (1) Lioyds Law Reports 175 at page 179 it is held. "if two persons agree that the price of property should be fixed by a Valuer on whom they agree, and he gives that valuation honestly and in good faith, they are bound by it. If there were fraud or collusion, of course, it would be very different. Fraud or collusion unravels everything. "the petitioner were therefore, bound by the valuation made by the auditors unless they can establish fraud or collusion. Otherwise, the auditors certificate is final and one cannot go into the question whether the valuation is fair or proper or not.(33) IN the first place, there is no material before us which would indicate that the valuation made by the auditors was not fair. On the contrary, while the auditors valued the shares at Rs.2160/- each, at the actual sale to the 5th respondent and the companies controlled by him, the shares fetched a higher price of Rs. 2300/- per share. We have also to bear in mind that the 3417 shares held by the trustees as also 93 shares held personally by some of the trustees, were sold as a controlling block of shares in the 1st respondent Company. They would therefore fetch a higher price. The trustees were also duty bound to obtain the best possible price for the shares because the sale proceeds were impressed with the public trust created by the settler. They were therefore entitled to sell these shares as a controlling block of shares in the 1st respondent, Company. As a consequence they seem to have fetched a good price of Rs. 2300/ -. The valuation made by the auditors, therefore, in this context cannot be considered as unfair.(34) THE petitioners have not relied upon the balance sheets of the Company or any other financial data of the company to establish that the valuation made by the auditors was unfair. The petitioners however contend that at a subsequent date, after having obtained control of the 1st respondent company, the Board of Directors issued an additional 17,666 shares at par. This according to the petitioners, would indicate that the valuation made by the auditors of the company was unfair. We do not see how a fresh issue of shares at a subsequent date at per can, in any manner affect the valuation earlier made by the auditors of the company of shares which were then available for sale. The Board of Directors are within their right in issuing fresh shares at par. They could have even issued bonus shares. This does not mean that the earlier share valuation which was made by the auditors in respect of the shares which were sold by one group of shareholders to another was unfair. In fact we have not been shown even the balance sheets of the company for the relevant dates in order to establish the petitioners claim upon the fact that they have made a complaint to the Institution of Auditors in respect of the conduct of the auditors of this company. That by itself cannot establish that the valuation was unfair.(35) THE auditors, according to the petitioners, have acted in collusion with the other executors and the intending purchasers in order to deprive the petitioners of their right to purchase these shares. No particulars of such collusion and/or fraud are set out in the petition. In the absence of any particulars, this plea cannot be accepted. The petitioners seem to suggest that by valuing the shares at higher figures, the petitioners were deprived of their right to purchase these shares. Presumably therefore, the petitioners did not exercise their right under Article 57-A because they did not have enough funds to purchase these shares at Rs. 2160/- per share. We do not have any necessary material to indicate what were the funds available with the petitioners, what according to the petitioners was the fair value of the shares and whether the funds with the petitioners were adequate for the purchase of these shares at the "fair value" as claimed by the petitioners. The entire argument is therefore purely hypothetical. In fact, in this situation, there appears to be a clear conflict of interests and duties as far as the petitioners are concerned. The 1st petitioner, as an executor/trustee under the will of her husband was duty bound to realise the maximum possible price for the shares held by her along with other executors so that the maximum possible amount can be made available for the purposes of the trust created by her deceased husband. On the other hand, as a person who was entitled to purchase these shares in exercise of her right of pre-emption under Article 57-A of the Article of association, she was interested in obtaining these shares at as low a price as possible. The second petitioner was only her nominee for the purpose of purchase of these shares. Both were therefore, equally interested in purchasing these shares at as low a price as possible. The entire challenge to the valuation made by the auditors of the company indicates the interest of the petitioners in obtaining these shares at as low a price as possible. Looking to this clear conflict of interests and duties, it is doubtful, whether the petitioners, so long as the 1st petitioner remained an executor/trustee, could have at all purchased these shares in exercise of their rights under Article 57-A. In any case we have no material to arrive at any finding of fraud or collusion on the part of the auditors, or even any deliberate over valuation.(36) THE petitioners next contend that the other executors, namely, respondents Nos. 3 and 4 were also interested in selling their personal holding of 93 shares at a high price. Hence they were interested in getting the auditors to make a high valuation. As earlier stated, there is no material which would indicate that the executors asked the auditors to overvalue the shares. In fact, the shares when sold fetched a higher price that fixed by the auditors. Moreover in the case of respondents Nos. 3 and 4, their personal interest does not conflict with their interest as trustees and executors. Both were equally interested in getting as good a price as possible for the shares. They are therefore not in the same position as the petitioners. Natural Justice:(37) THE petitioners have also challenged the valuation made by the auditors on the ground that there was a denial of natural justice in determining this valuation. According to the petitioners the auditors should have first prepared a draft valuation giving their reasons and submitted a copy of it to the petitioners for their comment. After the petitioners were heard on this draft valuation the auditors should have finalised their valuation. In not doing so they have violated principles of natural justice.(38) THE entire argument is misconceived. The auditors were acting as experts and relying on their own skill and judgment in giving their valuation of shares. The question of applying principles of natural justice in such a case does not arise. In any case they were not bound to follow the procedure as suggested by the petitioners. Moreover, before giving their valuation certificate, the auditors did ask the petitioners whether they would like to make any submission or produce any material regarding the valuation of shares. They extended time for this purpose at the request of the petitioners. The petitioners however did not avail of this opportunity and on the last day of the extended time, claimed that natural justice was denied to them because the draft valuation etc. were not meant to them for comment : Hence this contention of the petitioners has no merit. Readiness and willingness of the petitioners to purchase:(39) IT was next contended by the petitioners that the respondents have acted illegally in selling these shares to a third party when the petitioners were ready and willing to exercise their right of preemption under Article 57-A. Undoubtedly the petitioners accepted the offer made to them under Article 57-A to purchase these shares. The offer was to sell these shares at a price of Rs.2250/- per share which was the offer then received by the executors from a third party, or at a price to be determined by the auditors under Article 57-A. The petitioners agreed to purchase these shares at a price to be determined by the auditors. The price so fixed by the auditors was binding on the petitioners. Nevertheless, when the auditors determined the price, the petitioners challenged the price and did not agree to purchase these shares at the price fixed by the auditors. In these circumstances the executors were free to offer the shares for sale elsewhere in accordance with the articles of the company. There is no breach of any contract on the part of the executors.(40) AFTER these shares were sold by the executors to the 5th respondent and the companies controlled by him to the knowledge of the petitioners, the petitioners wrote a letter accepting the valuation made by the auditors and offered to purchase the shares at the valuation made by the auditors. This belated acceptance at time when the petitioners were fully aware that the shares were already sold, does not appear to be genuine. Validity of the Board Meeting of 21st November, 1985:(41) IT was next contended by the petitioners that the agenda of the meeting of the Board of Directors at which the transfer of these shares was accepted by the Board, did not contain this item relating to the transfer of these shares. Hence according to the petitioners, the Board meeting was invalid. The petitioners, after objecting to the manner of convening the Board meeting, had left the meeting. The subject matter of transfer of shares was taken up after the petitioners had left under the heading "to consider any other matter with the permission of the Chairman". In this connection our attention was drawn to section 286 of the Companies Act which deals with the meetings of the Board of Directors. This section does not say that every item which is discussed at the Board meeting must be specified on the agenda of the Board Meeting. In fact the section does not refer to any agenda. The Punjab and Haryana High Court in the case of (Sureshchandra Marwaha v. Lauls Pvt. Ltd. and others) reported in 48 Com. Cases 110 dealing with a similar where, at the meeting of the Board of Directors, some shares were transferred about which there was no mention in the agenda of the meeting, said, "no provision of law or the Articles of Association of the Company has been brought to our notice obliging the Board of Directors to only transact that business for which agenda is issued. It is well-known that every agenda of a meeting has a residuary clause "to consider any other matter with the permission of the Chairman". The matter with regard to the transfer of shares was considered at the meeting of the Board of Directors with the permission of the Chairman. No illegality was committed thereby. " Similar observations are made by the Delhi High Court in the case of (Smt. Abnash Kaur v. Lord Krishna Sugar Mills Ltd.) reported in 44 Company Cases 890. The Delhi High Court also said that the law does not require an agenda for a meeting of the Board of Directors and any business whatsoever can be transacted at the Board Meeting. In any case this is, at the highest, only an irregularity and it would not vitiate the transfer of shares.(42) THE petitioners have alleged that at the very same meeting of the Board of Directors, the respondent No. 5 was brought on the Board of Directors as an additional director. There was, therefore, a conspiracy between the other directors of the 1st respondent Company and the purchasers of the transferred shares to oust the petitioners. In this context it is necessary to bear in mind that respondent No. 5 and the Companies controlled by him had, by paying the price of Rs. 2300/- per share, acquired a controlling block of shares in the 1st respondent company. All the directors of the 1st respondent were aware of this fact. In these circumstances if respondent No. 5 desired to be on the Board of Directors of the 1st respondent Company, there was nothing underhand about it. This cannot be considered as a conspiracy against the petitioners. The petitioners had the first option to purchase this group of shares. The challenge, therefore, to the transfer of 3417 plus 93 shares of the 1st respondent company fails. The question of rectification of the register of members in this connection does not arise. Fresh Issue of 17666 shares :(43) THE next ground of challenge is to the fresh issue of 17666 shares to respondent No. 5 and his group of companies at par. This was done at the Annual General Meeting of the Company held on 16th November 1985. At the relevant date the authorised capital of the 1st respondent Company was Rs.25 lakhs divided into 25000 shares of Rs.100/- each. The issued capital was Rs.7,33,400/- (7334 shares ). At this Annual General Meeting, it was decided to issue the balance authorised shares, that it to say 17,666 shares of Rs.100/- each so as to increase the issue share capital to Rs.25/- lakhs. The Agenda of the Annual General Meeting did not show this item of fresh issue of 17,666 shares at par. The respondent claim that there was urgent financial necessity to obtain additional share capital for the purposes of this Company. They rely upon the need to purchase certain machinery and so on. We are not very impressed with this so called financial necessity.(44) The Board meeting which immediately followed the Annual General Meeting decided to allot these shares at par to respondent No. 5 and certain other companies under his control. This clearly indicates that respondent No. 5 and his group of shareholders, who were in control of the respondent Company, had decided to make a fresh issue of share capital of themselves at par so as to strengthen their control over the Company. For this purpose they brought in certain additional funds, being the price of these shares which they purchased at par.(45) Can this action be challenged Let us first examine the legal effect of the Agenda of the Annual General Meeting not showing this item on the agenda. Section 172 of the Companies Act which deals with the meetings of the Company requires that the notice of the meeting shall specify the place, the day, and hour of the meeting and shall contain a statement of the business to be transacted at the meeting. Section 172 also requires explanatory statement to be annexed to such notice as set out in that section. The respondents certainly committed an irregularity in not mentioning this item in the agenda of the Annual General Meeting. But this irregularity does not, in our view, vitiate the decision which was taken. As set out earlier, the Court will not interfere in the case of irregularities which can be cured. In the present case, even without these additional shares which were issued, respondent No. 5 and his group of shareholders had a majority control over the Company. This is clear from the votes which were cast at the Annual General Meeting in favour of and against this fresh issue of shares. 4260 votes were cast in favour of this resolution while 3049 votes were cast against the resolution. Hence they were and are in a position to get the fresh issue sanctioned at the meeting of the Company after notice. Moreover, at the same Annual General Meeting, it was decided that an extra ordinary general meeting of the Company would be called after proper notice to ratify this fresh issue of 17,666 shares at par. Such an extra ordinary general meeting was held after notice on 31st January, 1986 when the issue of these shares at par was ratified. According to the petitioners this ratification is invalid as the shareholders of the newly issued 17,666 shares also voted at this extra ordinary general meeting in favour of the resolution. But quite early, even if we ignore the 17,666 additional votes which were cast in favour of the resolution that remaining votes in favour, which are 4260, far exceed 3049 votes case against the resolution. The ratification is valid. We do not see any reason to invalidate this issue.(46) AS observed by Melish L. J. in the case of (Mc. Dougall v. Gardiner) reported in (1875)1 Ch. D. Pages 13 at pages 25, "if the thing complained of is a thing which in substance the majority of the company are entitled to do or if something has been done irregularly which the majority of the company are entitled to do regularly, or if something has been done illegally which the majority of the company are entitled to do legally, there can be no use in having litigation about it, the ultimate end of which is only that a meeting has to be called, and then ultimately the majority gets its wishes". Pro-rata distribution of the fresh issue. :(47) UNDER section 98 (1) of the Companies Act where there is a further issue of capital such further shares shall be offered to the persons who at the date of the offer are holders of the equity shares of the Company in proportion, as far as possible, to the capital paid up on the shares at that date. Section 81 (3), however, provides that section 81 does not apply to Private Limited Company. A Private Limited Company, therefore, is entitled to offer such further issue of shares in such manner as it may determine, subject of course to its Articles of Association. The Articles of Association of the 1st respondent Company do not require such further issue of shares to be allotted in any particular manner to existing shareholders. The allocation of further issue of shares, therefore, to respondent No. 5 and his group of companies, is not illegal or contrary to law. Moreover, the respondents have, at the hearing of the petition, made a "with prejudice" offer to distribute this 17,666 shares at pro rata to the petitioners so that the petitioners may continue to have their 41% holding of shares in the 1st respondent Company. This "with prejudice" offer has been made again at the hearing of these appeals before us also. But this offer has not been accepted by the petitioners. We do not see how this issue of 17,666 shares at par can be invalidated, although undoubtedly, it has caused prejudice to the petitioners by strengthening the control of respondent No. 5 and his group over the 1st respondent company. If any other remedy at law is available to the petitioners in this connection they are free to avail of it. But we fail to see how the register of members can be rectified under section 155 of the Companies Act in respect of these shares when respondents were within their right in issuing these shares at par. Subsequent events :(48) WE would also like to refer to some subsequent events which also make difficult to set the clock back, so to speak. In the first place, by selling 3417 shares the executors received a sum of about Rs.80 lakhs. After discharging the liabilities under the will of the deceased Dr. Parulekar, net sale proceeds amounting to about Rs.60 Lakhs have been used to create a public charitable trust for the purposes set out by the settler in his will. The fund is now impressed with a public charitable trust. Secondly, the fund which were brought into the Company by respondent No. 5 and his controlling group of companies by purchasing the fresh issue of 17,666 shares, has also been utilised by the Company for its expansion, for investments and for the purchase of machinery. This fund also in not now available for being released to the original buyers.(49) In these circumstances the learned Single Judge, while allowing the petition, had directed the petitioners to bring in a sum of Rs. 80,73,000/- within the time stipulated by him under his order. The petitioners however, failed to deposit this amount or any part thereof in Court within the stipulated period. Their application for extension of time was also rejected by the learned Single Judge for reasons which are set out by him in his order of 31st March, 1988. In these circumstances and looking to the fact that the petitioners have not been able to raise the funds within the period given to them by the learned Single Judge for acquiring a controlling interest in the 1st respondent Company, we do not see how any reliefs can be granted to the petitioners. The direction of the learned Single Judge relating to the retention of 17,666 shares with the company until they are reallotted by the directors also, in our view, is a relief which is not within the ambit of section 155 of the Companies Act. Be that as it may, looking to these circumstances, it is difficult to grant any relief to the petitioners under section 155. They have been unable to avail of their rights under Article 57-A to acquire controlling interest in the 1st respondent Company. For various reasons with which we are not concerned, either they do not have the requisite funds, or for reasons best known to them, they have not availed of their rights as required by law. We may also mention in this connection the fact that even initially, the suit which they filed in a Poona Court was not a suit for specific performance of their right under Article 57-A, but only a suit to restrain the executors from selling the shares to anyone other than the petitioners. Only in August 1986 they filed the present company petition which again is for a limited relief under section 155 of the Companies Act and not a petition under section 397 or 398 of the Companies Act. It was only after the judgment was delivered by the learned Single Judge in this company petition that they have now filed two suits in March 1988 for specific performance. Section 155 is a discretionary remedy which is not normally resorted to when there are allegations of fraud. We need not however, go into this aspect of the matter because, in any event, for reasons which are set out by us in our order, the petitioners are not entitled to any relief as prayed for by them in the petition. The Judgment of 31st March 1988 :(50) THE appeals before us from the judgment of the learned Judge dated 31st March, 1988, declining to grant any extension of time, are all filed by either the trustees, the purchasers from the trustees or by the Company in respect of certain observations made in that judgment and order. The petitioners have not filed any appeal before us challenging the order refusing to extend time for the deposit of Rs. 80,73,000/ -. The impugned observations are in respect of the readiness and willingness of the petitioners to purchase the shares in question. The learned Judge has observed that on account of the failure of the petitioners to deposit Rs. 80,73,000/- within the stipulated period the petition stands dismissed. But the observations made in his judgment would continue to bind the parties. In view of the fact that the appeals from the main judgment are now allowed, the appellants from this part of the order can have no grievance now.(51) IN his judgment of 31st March, 1988 the learned Single Judge has also observed that in the suit for specific performance it would be open for the petitioners to show their capacity and to convince the Court that they are in a position to really purchase these shares and to enforce specific performance of the contract. These observations should not be interpreted to mean that the readiness and willingness of the petitioners will have to be judged only at the point of time when the suits for specific performance are decided. The learned Judge has merely referred to the fact that the question of readiness and willingness of the petitioners throughout the material period, to purchase these charges will have to be decided by the Court which tries those suits on the basis of the evidence which is available before the Court. These observations cannot be read to mean that if the law requires the petitioners to prove their readiness and willingness throughout the material period, the requirements of law have, in any manner, been modified by the learned Single Judge or by us.

Decision:
1[ds]It is therefore not necessary for all the trustees to sign the transferthe resolution of the trustees executors any one of the executors was entitled to sign the transfer forms. Hence the three executors who have signed transfer forms have done so as transferrers in valid exercise of power under the said resolution. At the highest the only defect is that they have not stated that they have signed the transfer forms on behalf of all the executors or in exercise of their authority under the said resolution. This, in our view, is, at the highest, only an irregularity which can be easily corrected by the transferrers. In these circumstances it would be futile to invalidate the registration of transfer of these shares when the transferrers can immediately submit fresh transfer forms signed by them on behalf of all the transferrers. As set out in the case of (Killick Nixon Ltd. v. Dhanrai Mills P. Ltd.) reported in 54 Company Cases 532 at pages 465, (A judgment to which one of us was a party), the Court should not accept any invitation to indulge in a futile exercise under section 155. The provisions of this section are not meant for correcting proceduralis therefore no question of the 1st petitioner contending that the majority decision of the trustees is not binding on her. In fact she has acted on the decision by accepting the shares offered to her at a valuation to be fixed by the auditors. Offer to othercontention also can not be accepted. The Company did inform all itsthat the trustees were proposing to sell the shares in question and that in the event of the petitioners not exercising their right under Articlethe shares would be available for purchase by the other shareholders. None of the other shareholders showed any interest in purchasing these shares. It was submitted before us that the 2nd petitioner, being acould have purchased these shares in her own right even if she had declined to purchase these shares as a nominee of the 1st petitioner, under ArticleThere is however, no material before us which would indicate that she had, at any time, informed the company that she proposed to exercise her rights as a shareholder to purchase these shares. Throughout, even in various litigations which are pending, her claim has been to enforce her rights under Articleas a nominee of the 1st petitioner. There is therefore no basis for the submission that the 2nd petitioner had exercised her rights as an ordinary shareholder to purchase these shares. Valuation by the AuditorsArticle 61 of the Articles of Association the auditors are required to certify in writing what, in their opinion, is the fair value of the shares in case there is any difference between the transferrer and the purchaser as to the fair value of a share. The article further provides that in fixing this fair value the auditors shall be considered as acting as anIN the first place, there is no material before us which would indicate that the valuation made by the auditors was not fair. On the contrary, while the auditors valued the shares at Rs.2160/each, at the actual sale to the 5th respondent and the companies controlled by him, the shares fetched a higher price of Rs. 2300/per share. We have also to bear in mind that the 3417 shares held by the trustees as also 93 shares held personally by some of the trustees, were sold as a controlling block of shares in the 1st respondent Company. They would therefore fetch a higher price. The trustees were also duty bound to obtain the best possible price for the shares because the sale proceeds were impressed with the public trust created by the settler. They were therefore entitled to sell these shares as a controlling block of shares in the 1st respondent, Company. As a consequence they seem to have fetched a good price of Rs.. The valuation made by the auditors, therefore, in this context cannot be considered as unfair.(34) THE petitioners have not relied upon the balance sheets of the Company or any other financial data of the company to establish that the valuation made by the auditors was unfair. The petitioners however contend that at a subsequent date, after having obtained control of the 1st respondent company, the Board of Directors issued an additional 17,666 shares at par. This according to the petitioners, would indicate that the valuation made by the auditors of the company was unfair. We do not see how a fresh issue of shares at a subsequent date at per can, in any manner affect the valuation earlier made by the auditors of the company of shares which were then available for sale. The Board of Directors are within their right in issuing fresh shares at par. They could have even issued bonus shares. This does not mean that the earlier share valuation which was made by the auditors in respect of the shares which were sold by one group of shareholders to another was unfair. In fact we have not been shown even the balance sheets of the company for the relevant dates in order to establish the petitioners claim upon the fact that they have made a complaint to the Institution of Auditors in respect of the conduct of the auditors of this company. That by itself cannot establish that the valuation wasdo not have any necessary material to indicate what were the funds available with the petitioners, what according to the petitioners was the fair value of the shares and whether the funds with the petitioners were adequate for the purchase of these shares at the "fair value" as claimed by the petitioners. The entire argument is therefore purely hypothetical. In fact, in this situation, there appears to be a clear conflict of interests and duties as far as the petitioners are concerned. The 1st petitioner, as an executor/trustee under the will of her husband was duty bound to realise the maximum possible price for the shares held by her along with other executors so that the maximum possible amount can be made available for the purposes of the trust created by her deceased husband. On the other hand, as a person who was entitled to purchase these shares in exercise of her right ofpreemption under Articleof the Article of association, she was interested in obtaining these shares at as low a price as possible. The second petitioner was only her nominee for the purpose of purchase of these shares. Both were therefore, equally interested in purchasing these shares at as low a price as possible. The entire challenge to the valuation made by the auditors of the company indicates the interest of the petitioners in obtaining these shares at as low a price as possible. Looking to this clear conflict of interests and duties, it is doubtful, whether the petitioners, so long as the 1st petitioner remained an executor/trustee, could have at all purchased these shares in exercise of their rights under ArticleIn any case we have no material to arrive at any finding of fraud or collusion on the part of the auditors, or even any deliberate overearlier stated, there is no material which would indicate that the executors asked the auditors to overvalue the shares. In fact, the shares when sold fetched a higher price that fixed by the auditors. Moreover in the case of respondents Nos. 3 and 4, their personal interest does not conflict with their interest as trustees and executors. Both were equally interested in getting as good a price as possible for the shares. They are therefore not in the same position as the petitioners. NaturalTHE entire argument is misconceived. The auditors were acting as experts and relying on their own skill and judgment in giving their valuation of shares. The question of applying principles of natural justice in such a case does not arise. In any case they were not bound to follow the procedure as suggested by the petitioners. Moreover, before giving their valuation certificate, the auditors did ask the petitioners whether they would like to make any submission or produce any material regarding the valuation of shares. They extended time for this purpose at the request of the petitioners. The petitioners however did not avail of this opportunity and on the last day of the extended time, claimed that natural justice was denied to them because the draft valuation etc. were not meant to them for comment : Hence this contention of the petitioners has no merit. Readiness and willingness of the petitioners tothese circumstances the executors were free to offer the shares for sale elsewhere in accordance with the articles of the company. There is no breach of any contract on the part of theDelhi High Court also said that the law does not require an agenda for a meeting of the Board of Directors and any business whatsoever can be transacted at the Board Meeting. In any case this is, at the highest, only an irregularity and it would not vitiate the transfer ofare not very impressed with this so called financialclearly indicates that respondent No. 5 and his group of shareholders, who were in control of the respondent Company, had decided to make a fresh issue of share capital of themselves at par so as to strengthen their control over the Company. For this purpose they brought in certain additional funds, being the price of these shares which they purchased atthis irregularity does not, in our view, vitiate the decision which was taken. As set out earlier, the Court will not interfere in the case of irregularities which can be cured. In the present case, even without these additional shares which were issued, respondent No. 5 and his group of shareholders had a majority control over the Company. This is clear from the votes which were cast at the Annual General Meeting in favour of and against this fresh issue of shares. 4260 votes were cast in favour of this resolution while 3049 votes were cast against the resolution. Hence they were and are in a position to get the fresh issue sanctioned at the meeting of the Company after notice. Moreover, at the same Annual General Meeting, it was decided that an extra ordinary general meeting of the Company would be called after proper notice to ratify this fresh issue of 17,666 shares at par. Such an extra ordinary general meeting was held after notice on 31st January, 1986 when the issue of these shares at par was ratified. According to the petitioners this ratification is invalid as the shareholders of the newly issued 17,666 shares also voted at this extra ordinary general meeting in favour of the resolution. But quite early, even if we ignore the 17,666 additional votes which were cast in favour of the resolution that remaining votes in favour, which are 4260, far exceed 3049 votes case against the resolution. The ratification is valid. We do not see any reason to invalidate thisdo not see how this issue of 17,666 shares at par can be invalidated, although undoubtedly, it has caused prejudice to the petitioners by strengthening the control of respondent No. 5 and his group over the 1st respondent company. If any other remedy at law is available to the petitioners in this connection they are free to avail of it. But we fail to see how the register of members can be rectified under section 155 of the Companies Act in respect of these shares when respondents were within their right in issuing these shares at par. Subsequent events:(50) THE appeals before us from the judgment of the learned Judge dated 31st March, 1988, declining to grant any extension of time, are all filed by either the trustees, the purchasers from the trustees or by the Company in respect of certain observations made in that judgment and order. The petitioners have not filed any appeal before us challenging the order refusing to extend time for the deposit of Rs.. The impugned observations are in respect of the readiness and willingness of the petitioners to purchase the shares in question. The learned Judge has observed that on account of the failure of the petitioners to deposit Rs. 80,73,000/within the stipulated period the petition stands dismissed. But the observations made in his judgment would continue to bind the parties. In view of the fact that the appeals from the main judgment are now allowed, the appellants from this part of the order can have no grievance now.(51) IN his judgment of 31st March, 1988 the learned Single Judge has also observed that in the suit for specific performance it would be open for the petitioners to show their capacity and to convince the Court that they are in a position to really purchase these shares and to enforce specific performance of the contract. These observations should not be interpreted to mean that the readiness and willingness of the petitioners will have to be judged only at the point of time when the suits for specific performance are decided. The learned Judge has merely referred to the fact that the question of readiness and willingness of the petitioners throughout the material period, to purchase these charges will have to be decided by the Court which tries those suits on the basis of the evidence which is available before the Court. These observations cannot be read to mean that if the law requires the petitioners to prove their readiness and willingness throughout the material period, the requirements of law have, in any manner, been modified by the learned Single Judge or bythese circumstances and looking to the fact that the petitioners have not been able to raise the funds within the period given to them by the learned Single Judge for acquiring a controlling interest in the 1st respondent Company, we do not see how any reliefs can be granted to the petitioners. The direction of the learned Single Judge relating to the retention of 17,666 shares with the company until they are reallotted by the directors also, in our view, is a relief which is not within the ambit of section 155 of the Companies Act. Be that as it may, looking to these circumstances, it is difficult to grant any relief to the petitioners under section 155. They have been unable to avail of their rights under Articleto acquire controlling interest in the 1st respondent Company. For various reasons with which we are not concerned, either they do not have the requisite funds, or for reasons best known to them, they have not availed of their rights as required by law. We may also mention in this connection the fact that even initially, the suit which they filed in a Poona Court was not a suit for specific performance of their right under Articlebut only a suit to restrain the executors from selling the shares to anyone other than the petitioners. Only in August 1986 they filed the present company petition which again is for a limited relief under section 155 of the Companies Act and not a petition under section 397 or 398 of the Companies Act. It was only after the judgment was delivered by the learned Single Judge in this company petition that they have now filed two suits in March 1988 for specific performance. Section 155 is a discretionary remedy which is not normally resorted to when there are allegations of fraud. We need not however, go into this aspect of the matter because, in any event, for reasons which are set out by us in our order, the petitioners are not entitled to any relief as prayed for by them in the petition. The Judgment of 31st March 1988: