JUDGMENT P. K. Palli, J.—The matter comes up for confirmation of the order dated 30th September, 1996 passed in O,M0Pa No. 415/^6 arising out of Civil Suit No, 87/96 2, The plaintiffs have filed a suit claiming decree of permanent prohibitory injunction restraining defendants No. 1 to 7 from acting as Directors of the Company-defendant No 8—with a further direction to restrain them from intermeddling with their assets, shares, property and business of the said Company as well as holding the annual general meetings. Alongwith the said suit, an application under Order 39, Rules I and 2f Civil Procedure was filed wherein it was stated that defendants No. 1 to 7 are illegally and unauthorisedly trying to usurp the assets of the Company and are trying to proclaim themselves to be the Directors/ Managing Directors without there being any legal sanction, h was also stated that annual general meeting had been convened on 30th September, 1996 to create legal status of their past illegal and unauthorised acts and that the defendants be restrained by way of interim injunction from acting as Directors of the Company and from meaning its affairs. 3. The suit as well as the application, referred to above, came up before the Court on September 30, 1996 on which day an ad interim injunction was allowed as prayed for subject to the plaintiffs serving the defendants positively by the next date of hearing. 4. The defendants have filed written statement as well as reply to the injunction application and it is stated by them that the shares have been rightly transferred in favour of defendants No. 1 to 4. Jaswant Lai Kuthiala and Sumant Kuthiala as well as Anil Kuthiala were legally and validly appointed Directors and Chairman cum-Managing Director respectively of the Company. The plaintiffs have very small percentage of shares. Jaswant Lai Kuthiala and Sumant Kuthiala as well as Anil Kuthiala were legally and validly appointed Directors and Chairman cum-Managing Director respectively of the Company. The plaintiffs have very small percentage of shares. It is also said that defendants No. 9 and 10 had earlier filed a suit on identical pleas and he claimed injunction restraining defendant No. 1 from acting as Director of the Company and operating the accounts but no interim injunction had been granted in that suit and thus the present suit has been filed in collusion with the plaintiffs in the other suit, Le> Civil Suit No 6 of 1996 It is stated that it was not open to the plaintiffs to lay challenge to the transfer of shares vality and legally made in favour of defendants No. 1 to 4. The suit is barred under the provisions of the Companies Act The meeting was validly held on September 30, 1996 and the stay order granted by this Court was received after quite some time after the meeting was over and the plaintiffs are not entitled to the grant of any injunction and the injunction order granted by this Court be vacated. 5. One application O.M.P. No. 457/96 has been filed by defendants No. 1 to 4 with the prayer to restrain the plaintiffs and proforma defendants No 9 to 12 from interfering with the management and control of the affairs of the Company, i.e. defendant No 8. The plaintiffs have also filed reply to this application with the prayer that the stay order has rightly been granted and be confirmed and the defendants be dealt with for flouting the orders passed by this Court. The parties have also filed rejoinders. 6. Yet another application under Order 39, Rule 2-A, Civil Procedure Code has been filed by the plaintiffs for punishing defendant No. I Uttam Chand Sood for disobeying the injunction order dated September 30, 1996, detailed reference to which has already been made above in the order, and in this application it has been stated that the stay order was faxed to the office of defendant No. 1 at New Delhi and inspite of the order, defendant No. 1 pressurised the Company to issue him a cheque in the back date, i.e. dated October, 1, 1996 for a sum of ruppes one lac. It is also said that defendant No. 1 despite the injunction order, is visiting the registered office of the Company and is intermeddling with the business affairs as well as the property and is coercing the management of the Co-operative Tea Factory to pay him the amount through his employees. The defendant is said to be willfully acting in disobedience of the injunction order passed by this Court and is to be suitably dealt with. 7. The defendants have also filed reply to this application and it is stated therein that the meeting was held on September 30,1996 at 200 p.m. and was completed by 2-40 p. m. Majority of the share-holders were present and the business as per agenda was carried out. No stay order was communicated before the meeting concluded and the stay order was received by fax message at 3 25 p.m. The orders have not been disobeyed and the defendant No. 1 has not intermeddled with the business affairs as well as property of the Company nor has coerced the management of the Tea Factory to pay any amount through his employees as alleged by the plaintiffs. Rest of the contents made in the application have been denied with the prayer that in case this Court holds that the defendant has done any act which is construed as amounting to disobedience, the defendant tenders sincere and unqualified apology for the same. 8 An application was also filed by the plaintiffs seeking direction to defendants No. 1 to 4 for production of records of the defendant Company. The record has been placed and inspected by the plaintiffs. An object on was raised for non-production of certain other records which, according to the defendants, has been taken away by the plaintiffs in a clandestine manner and report to that effect has been lodged with the police. Be that as it may. All these applications shall stand disposed of by this order. 9. Learned Counsel appearing for the plaintiffs Mr, Bhupender Gupta, submits that the plaintiffs and the proforma defendants have 43% shares of the defendant Company and defendants No. 99 10 and 11 are members of the Board of Directors One Jishan Lal Kuthiala was the Managing Directors who died on October 26, 1994 and that there is no Managing Director at this time. It is stated that no meeting of the Board of Directors has ever been held after the demise of Jishan Lal Kuthiala. Vide notice for the meeting to be held on September 26, 1995, it was provided that defendants No. 5 and 7 who are share-holders, would be appointed as Directors. Defendant No, 6 who is the son of late Jishan Lal Kuthiala, is said to have been appointed as Managing Director with effect from November 5, 1994 whereas defendants No, 5 and 7 were co-opted as Additional Directors under section 260 of the Companies Act It is stated that no such meeting of the Board of Directors was ever held* not any business was transacted or could be transacted without proper quorum. Mr. Gupta strongly objects to the procedure employed in respect of the sale of shares and for that matter he has pointed out that under the Articles of Association, the shares could not be transferred except as provided for in Clause (14). It is being strongly argued that no meeting ever took place after the death of the then Managing Director and no offer was made in respect of the sale of the shares to any member of the Board and if the plaintiffs had come to know, they were desirous of purchasing the same in accordance with the terms of the Articles of the Association. 10. It is sought to be projected by Mr Gupta that defendant No. 1 is making a desperate bid that the plaintiffs should sell their shares of the Company to him but they are not interested. It is highlighted that on September 26 and 27, 1996 the plaintiffs came to know of the meeting to be held on September 30, 1996. The notice is said to have been issued by defendant No, 2 in the capacity of Director of the Company. The approval and confirmation of appointments of defendants No. 1 to 4 as Directors in the annual general meeting has been put on the aganda. These persons do not have any connection with the affairs of the Company and are not entitled to hold out themselves as Directors nor they are eligible to be appointed as such. Mr. Gupta further lays stress that defendants No 5 to 6 have colluded with defendants No. 1 to 4 and their acts and conduct are likely to put the Company in further losses. Mr. Gupta further lays stress that defendants No 5 to 6 have colluded with defendants No. 1 to 4 and their acts and conduct are likely to put the Company in further losses. 11. It is submitted that the defendants have deliberately not made available the entire record for Inspection by the plaintiffs whereas actually the record is with them and it is being wrongly stated by them that the said record has been taken away by the plaintiffs. 1 2, Mr. Gupta has pointed out several discrepancies from the record made available to the Court by the defendants and has drawn my attention particularly to the proceedings of the meetings held on November 3, 1994 November 5, 1994, September 26, 1995 and October 5, 1995 as well as to Clause (14) of the Memorandum of the Association, It is sought to be highlighted that at some places the signatures which purports to be of the then Chairman and Managing Director Jishan Lal Kuthiala, are not his and members have been shown to be present by proxy whereas according to the proceedings different language appears The argument is based to high-light that after the death of Jishan Lal Kuthiala, the defendants have manoeuvred and forged the record to suit their convenience and as such the defendants No. 1 to 4 cannot be held to have acquired any right, title and interest as Directors of the Company and the shares purchased by them cannot be said to be valid and legal in accordance with the Article of the Association. 13. Mr. Ashu, M. Punchhi and Mr. EL D. Sood, learned Counsel appearing for defendants No 1 to 4, in reply to the arguments advanced by the plaintiffs, urge that the plaintiffs could not be permitted to lay challenge to the transfer of shares made in favour of the defendants as well as to the appointment of defendant No 1 Uttam Chand Sood, It is stated by them that Jaswant Lal Kuthiala and Suxnant Kuthiala were legally and validly appointed as Directors in accordance with the well settled procedure and so was the appointment of Anil Kuthiala as Chairman-cum-Managing Director particularly when Jishan Lal Kuthiala, late Chairman-cum-Managing Director, expressed his desire to relinquish the charge of the Company on account of ill health. It is stated that the plaintiffs as well as defendants No. 9 to 12 have 126 shares only and the percentage comes to 23,30. Mr, Punchhi has further high-lighted the efforts which have teen made by defendant No. I as Chairman-cum-Managing Director to revive the functioning of the Company by investing considerable amount in it from his own pocket as interest free loan My attention has also been drawn to Civil Suit No 6/96 filed by Arun Kuthiala, Gian Chand Kuthiala and Radha Krishna Kuthiala defendants No. 9 to 11 in which these defendants, as plaintiffs, claimed themselves to be the Directors of the Company and sought identical relief against the present defendants. No injunction has been granted to them. It is also stated that these persons along with certain other plaintiffs have also gone to the Company Law Board making out similar complaint and they are at liberty to pursue their remedy there. It is high-lighted that the defendants No. 9 and 10 ceased to be the Directors as they did not attend the meetings of the Board of Directors as required. It is also submitted on behalf of the defendants that no challenge can be entertained to the transfer of shares made in their favour and that they are managing the affairs of the Company in accordance with the provisions of the Companies Act. My attention has been invited to the meeting held by the Board of Directors on October 7, 1994 and notices were duly seat to all the Directors, It was in that meeting that Jishan Lal Kuthiala was present and Jaswant Lal Kuthiala and Sutnant Kuthiala were co-opted as Directors and in the extraordinary general meeting which was convened by Jishan Lal Kuthiafa, he expressed his desire to relinquish the charge because of his ill health This meeting was held on November 3, 1994 and resolution was passed whereby Anil Kuthiala, his son, was appointed as Chairman-cum-Managing Director. Notices were sent to all the members of the Company for the said extraordinary meeting and it was there that the transfer of 79 fully paid up shares were duly transferred in the names of Anil Kuthiala and his family members. 14. Notices were sent to all the members of the Company for the said extraordinary meeting and it was there that the transfer of 79 fully paid up shares were duly transferred in the names of Anil Kuthiala and his family members. 14. My attention has also been drawn particularly to the fact that Anil Kuthiala as Chairman-cum-Managing Director convened the annual general meeting of the share-holders for September 26, 1995 where his appointment as well as the appointment of two other Directors was duly approved. The accounts were also said to have been approved in the said meeting. In the meeting held on September 3, 1994, the appointment of the Directors was confirmed and it was in July, 1995 when nobody came forward to buy the shares, the shares were transferred in the name of Uttam Chand Sood and his family members, i.e. defendants No. 2 to 4 and this was done after following proper procedure. It was duly accepted the concerned authorities under the Companies Act. Defendant No. 1 was co-opted as Director on October 7, 1^95, and was appointed as Additional Director to hold the office till the holding of the annual general meeting. 15. Learned Counsel appearing for the defendants have also brought to my notice the proceedings of the meeting held September 27, 1994 when Joginder Lal Kuthiala offered his 69 shares and no member expressed any desire to purchase the same and it was in the given situation that Jishan Lai Kuthiala bought these shares. The proforma defendants who were the Directors of the Company, were present in that meeting but never offered to purchase these shares, 16. Whether the meeting held on October 7, 1994 is valid or invalid, is to be decided after the parties lead evidence on the point but, as it appears, Anil Kathiala was appointed as Chairman cum-Managing Director in the presence of Jishan Lal Kuthiala. Both, Jaswant Lai Kuthiala as well as Sumant Kuthiala were co-opted as Directors in that very meeting It is high lighted by defendants No. 1 to 4 as well as by the learned Counsel Ms. Both, Jaswant Lai Kuthiala as well as Sumant Kuthiala were co-opted as Directors in that very meeting It is high lighted by defendants No. 1 to 4 as well as by the learned Counsel Ms. Devyani Kuthiala who appears for defendants No. 5 to 7, that for several years the functioning of the Company was going on smoothy and the plaintiffs or the proforma defendants never raised any objection nor objected to the business of defendant No. 8 which was being managed by defendants No. 5, 6 and 7 for over one year. No objection was raised even to the appointment of Anil Kuthiala Chairman and Managing Director and he has been operating the bank account and dealing with the factory and its business as such. It is, thus, being argued that defendant No. 1 came to be validly appointed as Director in accordance with the well set procedure and thereafter as Chairman-cum Managing Director of the Company. The learned Counsel have also brought to my notice Article 15 of the Memorandum of the Association according to which in case the Board is unable to sell those shares within two months of the receipt of the notice, the vendor after the expiry of one month may sell the shares not sold to any person subject to Articles 11, 12 and 13 at any price. Articles 11, 12 and 13 relate to the transfer of shares, It is, thus, projected from the side of the defendants that the shares stood valid ly and legally transferred in favour of defendants No. 1 to 4 when none of the plaintiffs or proforma defendants expressed any desire to purchase the same. 17. It is stated that the defendants have more than 55% shares and the plaintiffs are unnecessarily creating problems in the smooth functioning of the Company. The learned Counsel for the defendant have also brought to my notice the fact that beside sending notices for the meeting under Certificate of Posting, the notice was also published in the Tribune dated September 19, 1996 and the plaintiffs were welcomed to participate in the proceedings and watch them. The appointment of defendants No 1 to 4 who had already been appointed as Directors, was confirmed by the shareholders in the meeting held on September 30f 1996 at 200 p.m. before the stay order reached defendant No. 1 after 300 p m. 18. The appointment of defendants No 1 to 4 who had already been appointed as Directors, was confirmed by the shareholders in the meeting held on September 30f 1996 at 200 p.m. before the stay order reached defendant No. 1 after 300 p m. 18. After having weighed the rival contentions of the parties, I am of the opinion that the points being raised and agitated, can be decided only after the evidence is led by the parties. It would not be proper to make any observation at this stage since it would ultimately affected the decision to be given in the suit finally, 19. In my considered opinion, defendants No. 1 to 7 have been able to make out a case for the modification of the order dated September 30, 1996 passed by this Court, Defendants No. 1 to 7 have been able to show prima facie that the plaintiffs as well as defendants No. 7 to 12 own 23% of shares only and further that in a separate suit No 6/96 filed by the present defendants No. V and 10, no injunction has been issued although the said suit was filed on January 19, 1996, the stay in the present suit was granted on September 30, 1996. A look at the plaint filed in that suit shows that the relief which is claimed in the present suit, if not exactly identical, is almost similar. It thus cannot be ruled out that when the plaintiffs in that suit could not succeed in getting the ad interim injunction, the present suit has been got filed by them through the present plaintiffs. Be that as it may. No satisfactory answer has been supplied as to how the interest of the plaintiffs and the proforma defendants would suffer in the given situation as they are only share-holders and that too in a small proportion. Their interest can sufficiently be safeguarded even if the affairs are permitted to be run by defendants No, 1 to 4. Vide order dated September 30, 1996 the interim injunction was granted as was prayed for. In the prayer it has been said that defendants No. 1 to 7 be prevented from acting as Directors of the Company and be further restrained from managing its affair properties and intermeddling with the assets, shares and business of the Company. 20. Vide order dated September 30, 1996 the interim injunction was granted as was prayed for. In the prayer it has been said that defendants No. 1 to 7 be prevented from acting as Directors of the Company and be further restrained from managing its affair properties and intermeddling with the assets, shares and business of the Company. 20. In narration of the events given in detail in the earlier part of this order, it reveals that functioning of the Company has been brought to a grinding halt which would not serve any purpose either of the plaintiffs or of the defendants The defendants are in possession, management and control of the Company at least prima facie and it would not be proper to restrain them from carrying out its affairs in accordance with the well set procedure as given in the Companies Act and also in accordance with the provisions contained in the Articles of Association. 21. In my considered opinion, the interest of the plaintiffs would be sufficiently safe-guarded in case defendants No. 1 to 7 are given certain directions. The defendants would proceed strictly in accordance with law and procedure as well as Articles of Association. The proceedings and the minutes would be honestly recorded. Defendants No. 1 to 7 shall have no right, title or authority to tinker with the fixed assets of the Company or any of its immovable properties and machinery. The defendants would further make available to this Court a photo copy of the true and correct account duly verified after every three months. No sale or purchase of shares would be permitted except with the permission of the Court. The defendants would also place before the Board of Directors the day to day business and other proceedings and the plaintiffs shall have the right to send one of them as their representative to such meeting as observer. In case such a representative desires to record his dissent, the same should be duly incorporated in the proceedings and shall form part of the record. As and when the general meeting is to be held, registered notices would be sent by the defendants to all the share-holders including the plaintiffs and proforma defendants. In case such a representative desires to record his dissent, the same should be duly incorporated in the proceedings and shall form part of the record. As and when the general meeting is to be held, registered notices would be sent by the defendants to all the share-holders including the plaintiffs and proforma defendants. 22, Both the parties would be at liberty to move this Court as and when so necessiated by the exigencies of the situation to take such appropriate orders as are deemed necessary from time to time. 23. In view of the above, all the applications mentioned in the operative part of this order, are disposed of accordingly and the stay order dated September 30, 1990 is modified in the aforesaid terms. Order Accordingly.