Law: Companies Ordinance, 1984

Section: 86

Companies Ordinance (XLVII of 1984)--Ss. 86 & 87---Civil Procedure Code (V of 1908), O.XXXIX, Rr. 1 & 2---Law Reforms Ordinance (XII of 1972), S.3---High Court appeal---Application under O.XXXIX, Rr. 1 & 2, C. P. C: for grant of injunction in a suit for declaration, cancellation, permanent injunction and specific performance of agreement for sale of shares---Crux of the plaintiffs case was that the lenders were selling 73.50% shares by calling bids through press advertisements; and such shares included 50.63% shares purchased by the plaintiff from the original buyer which had not yet been transferred in the name of the plaintiff---Record showed that all the actions were taken when the directors nominated by the plaintiff were on the Board of the company including the person authorised to file the present suit---Plaintifs assertions that the shares which were subject-matter of the Original Agreement and Novation Agreement were part of the shares being sold by the lenders was patently false and that the plaintiff had right of first refusal for the purchase of shares being sold by the lenders, appeared to be equally baseless---Memorandum of Understanding, as claimed, had not given any such rights to the plaintiff who, in any case, was not a party to the said Memorandum--Shares, subject-matter of the Original Agreement and Novation Agreement, having not been transferred in the name of the plaintiff; assertion of plaintiff that the lenders could not sell the shares without first offering the same to it was misconceived---Plaintiffs claim that it was ready to operate the company and to improve the bid also appeared to be illusory in view of its own conduct in the past---Plaintiffs nominee Directors voluntarily withdrew their nominations from the election of the company and had never shown any interest in the affairs of the company thereafter---No possibility existed that the plaintiff could run the affairs of the company even if the shares, subject-matter of the Original Agreement and the Novation Agreement, were transferred to it as the same would only constitute a small minority in the currently paid-up capital of the company ---Plaintiff had not…

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