Holding

The Court held that the earlier Supreme Court orders constitute the basis for the company to file a suit for appointment of a commissioner to conduct the general body meeting in accordance with the arbitration award and the company's bye‑laws.

Summary

Sikh Newspaper Ltd., a newspaper company, was unable to function due to a deadlock among its shareholders. The Supreme Court had earlier ordered an arbitrator to determine the genuine shareholders as of 10‑Nov‑1987 and to fix a date for a general body meeting, directing the company to convene the meeting and to maintain a status‑quo on its assets. Subsequent interlocutory applications sought clarification on who would prosecute the arbitration and on the appointment of a fresh arbitrator after Justice Venkataramiah declined. The Court observed that no party had been identified to pursue the arbitration and therefore granted time to file an affidavit, after which the company expressed its willingness to proceed. The Court held that the earlier orders (5‑Apr‑1989 and 6‑Mar‑1990) remain the basis for action, directing the company to file a suit in the appropriate trial court to appoint a commissioner who will conduct the general body meeting in accordance with the arbitration award, the bye‑laws and the Articles of Association, and to prevent alienation of assets pending the meeting.

Issues considered

Whether the company can proceed to convene a general body meeting based on the arbitration award and earlier Supreme Court directions.
Whether a fresh arbitrator needs to be appointed after the initial arbitrator declined to act.
Whether the court can direct the filing of a suit to appoint a commissioner to conduct the meeting and enforce the status‑quo on company assets.

Subjects

Company LawGeneral Body MeetingArbitrationCommissionerStatus QuoShareholder DisputeArticles of AssociationCourt Directions

Judgment

A SIKH NEWSPAPER LTD.
v.
'f
D.M. JALANDHAR AND ORS.

JANUARY 2, 1996

B [K. RAMASWAMY AND G.B. PATTANAIK, JJ.]

Company Law :

Newspaper Company-Deficiency in its working-<Jeneral Body Meet-
;
ing of Shareholders for the purpose of working of the company-Suit to be
c filed by the Company--Commissioner to be appointed to conduct the General
Body meeting in accordance with bye-laws and A11icles of Association of the
Compan~arlier orders passed in this matter by Supreme Court to be basis
for taking further action-Directions-lssued.

CIVIL APPELLATE JURISDICTION: I.A. Nos. 8-11of1993.
D
IN

Civil Appeal No. 5855of1983.

From the Judgment and Order dated 4.2,83 of the Punjab & Haryana
E High Court in L.P.A. No. 94 of 1983.

R.S. Sodhi, Ms. Meenakshi Arora, Ms. Ruby Ahuja, Mrs. M. Karanjawala
for the Appellants.

Swaraj Kaushal, R.S. Suri, N.K. Aggrawal, G.K. Bansal Rani Jethmalani •
F (NP) for the .Respondents.

The following Order of the Court was delivered :

We have heard the counsel on either side. This Court on march 6, 1990
passed the order as under :
G
"The Arbitrator will determine the above issue and other connected
·~
issued indicated above and make his award giving the list of the genu-
ine shareholders of the company as on 10.11.87 within four months
from the date of his entering upon the reference. The arbitrator will
also fix a suitable date for the holding of a meeting of the above gen-
H
16
SIKH NEWSPAPER v. D.M. JALANDHAR 17
era! body of shareholders of the company under the Chainnanship of A
the persons mentioned, and for transacting the business referred to, in
the Minutes of Settlement annexed to the order dated 11.11.87 in the
manner indicated therein. We direct the appellant company, there-
upon, to take necessary steps to convene the meeting on the date so
fixed and issue necessary notices to the shareholders on the list drawn
B
. up by the arbitrator. We further direct that the meeting be held on the
date specified rn the award notwithstanding any order, injunction or
prohibition issued by any court restraining the holdingofthe meeting
or restraining the shareholders or any of them from voting at the meet-
ing and subject only to any directions that may be issued by this Court
before the meeting is actually held. Till the final disposal of the mat- c
ter, the fixed assets of the Company should not be alienated, parted
with or encumbered by any of the parties without the pennission of
this Court."

I.A. Nos. 8-11193 have been filed seeking direction to the District Mag-
istrate, Jalandhar, or for that matter any other person, to restore the status quo D
with regard to the status of the applicant Shri Ratnesh Singh Sodhi as the
Printer, Publisher and Editor in Chief of the Akali Patrika owned by Sikh News-
paper Ltd. and to restore status quo with regard to the same as on 16.4.1993
till a meeting of the share-holders of the Company (as decided by the Arbitra-
tor) is held to detennine the said issue. E
An affidavit has been filed by Balraj Singh Takhar stating that he has
settled down in States and he no longer is interested in pursuing the matter and
that, therefore, he is entitled to withdraw from the contest and let the matter be
closed. When the matter had come up before us on November 27, 1995, in
view of the above statement, Shri R.F. Nariman, learned counsel who appeared F
for the second appellant in the main appeal had stated that in view of the con-
sent of the parties for appointment of an arbitrator, namely, Shri Justice E.S.
Venkataramiah, as he then was, and since the learned Judge had declined to act
as an arbitrator, he requested appointment of a fresh arbitrator to pursue the
direction issued by this Court. At that stage, it was pointed out that since the G
Court had no material before it as to who is to prosecute the arbitration pro-
ceedings and on whose behalf, it would be difficult to give such direction as
sought for which reads thus :

"Learned counsel appearing for the 2nd respondent in the main
matter and the applicant in this application stated that in view of the H
-~
18 SUPREME COURT REPORTS [1996] l S.C.R.
A affidavit filed by Balraj Singh Takhar, son of Shri Banta Singh, ap-
pellant No. 2 , that he does not wish to proceed further in the manage-
ment of "Daily Akali Patrika" and that since he has been prosecuting r
the proceedings and having been settled in U.S.A., it would be diffi-
cu It for him to proceed with the matter in India. Therefore, he stated
that Shri Ratnesh Singh Sodhi may be entrusted to function as printer,
B publisher and chief editor of the Patrika.

Shri R.F. Nariman; learned counsel appearing for appellant No. 2
stated that earlier order passed by this Court, inter alia, directed, by
consent of the parties, appointment of an arbitrator and though Jus-
c tice Venkataramiah, as he then was, was chosen by the parties to be
an arbitrator, since the learned Judge had declined to act as an Arbi-
trator, a fresh Arbitrator needs to be appointed.

Shri Sodhi, learned counsel appearing for the first appellant con-
tended that he has instructions to state that the first appellant is will-
D ing to have the matter settled by arbitration.

We do not have any material on record as to who is intending to
prosecute the arbitration proceedings and on whose behalf. Under
these circumstances, we cannot give any directions except on filing
of an affidavit by appropriate persons concerned and also by consent
E of all the parties.

Shri sodhi seeks for and is granted four weeks' time for filing an
affidavit. Post after four weeks."

Accordingly, Shri Sodhi, learned counsel had taken time to file an affi-
F davit in that behalf. Now, an affida~it has been filed stating that the company
is prepared to pursue the proceedings in the arbitration.

Having heard the learned counsel on both sides, we think that appropri-
ate course would be as under :

The order passed by this Court initially made on April 5, 1989 and the
•
•
G
final order dated March 6, 1990 would form the basis for further action in the
matter. I-

The company would file a suit in the trial Court having Jurisdiction over
the area in which the company is stuated. In the suit, for conducting the meet-
H ing of the General Body, the trial Court would take the aforesaid orders passed
SIKH NEWSPAPER v. D.M. JALANDHAR 19
by this Court as basis to take further action. A

- On that basis a Commissioner would be appointed to conduct the meet-
ing of the General Body and would follow the directions issued in the order
dated March 6, 1990 and conduct the proceedings in accordance with th~ bye-
laws and the Articles of Association of the Company and take funher action
as may be prayed in the suit consistent with the bye-laws and the Articles of B
Association of the company.

This order, we think, would meet the situation available for working of
the company. The I.As. are accordingly ordered.

G.N. Directions issued. C