Yogeshwari Kumari V Lake Shore Palace Hotel Case Summary

Similarly, in Yogeshwari Kumari v. Lake Shore Palace Hotels (P.) Ltd. the petitioners by virtue of their shareholding of 25.1 per cent had special rights inasmuch as though they constituted a minority no special resolution could be passed without their consent. The Court observed that any attempt to disturb this percentage shareholding without consent of the petitioners could be an act of oppression as the petitioners were willing to increase the capital base and meet the requirement of the company. The court thus held that the respondents cannot have any objection and cannot insist that only share capital has to be increased to raise capital for the company.

Where in a family company being carried on as a quasi-partnership, there was equal

For getting loans from the Industrial Finance Corporation the parties converted the company into a public company and amended its articles of association, but no attempt was made to incorporate the original agreement between the three parties under the amended articles. It became necessary for the company to raise its capital still further and sanction was obtained in that regard from the Controller of Capital Issues. Under S. 81(now 62) of the Companies Act 1956 the new shares had to be offered in the first instance to the existing share-holders in proportion to the capital paid up on the existing shares at that date subject to any direction to the contrary which may be given by the company in general meeting. Sharp differences arose between the parties with regard to the new issue. The two groups of persons opposed to the appellant succeeded in passing a resolution that the shares should be allotted privately in the best interest of the company at the sole discretion of the directors. This was followed by a suit by the appellant and some other shareholders of his group for a declaration that the resolutions were ultra