CLB lifts stay on J&N issue, pulls up Turner Morrison

In its December 2 ruling, the CLB vacated its interim order which had stayed Jenson & Nicholson from increasing, issuing and alloting further equity or preference capital. The paints company had sought the vacation of the ex-parte interim order passed on November 10, 1997, questioning the maintainability of the petition by Turner Morison group.

The CLB has strongly noted the "non-disclosure of material facts" by Turner Morrison in its petition seeking issuance of ex-parte restraint order under Sections 397 and 398 of the Companies Act of 1956.

The CLB has stated that it would not have have passed the ex-parte order but for the Turner Morrison group’s stated apprehension that Jenson & Nicholson was likely to implement its decision taken at the May 20 board meeting to issue preference shares, which could possibly dilute Turner’s shareholding to less than 14 per cent.

According to documents, the CLB has said: "Unfortunately, the petitioners (Turner Morrison) neither brought to our notice that that the said proposal had later been approved by the General Body, nor that one of the petitioners had sought to obtain a stay-order against holding that annual general meeting in Calcutta High Court which was not granted." Moreover, the CLB stated that the fact that one of the petitioners attended the general body meeting where the proposal of preference shares was approved was also not mentioned while seeking an ex-parte order.