Nath Securities Limited, A Company incorporated under v. Aurangabad Paper Mills Limited

Mr. Badal Mittal, Age : Major, Occupation : Business, Resident of Mittal Towers, Nariman Point, Mumbai. .......................... .. Appellant (Original petitioner) .. Respondents (Original respondents) (2) Mr. D.V. Soman, Advocate, for the appellant. Mr. G.K. Naik Thigle, Advocate, for respondent no.1. Mr. A.J. Bhat, Advocate, for respondent no.2. .......................... CORAM : B.R. GAVAI, J. DATE : 9TH JULY 2010 COURT'S ORDER :

By way of present appeal, the appellant challenges the order dated 29th August 2009, passed by the learned Principal District Judge, Aurangabad, below Exhibit 1 in M.A.R.J.I. No. 170/2008, thereby rejecting the application filed by the appellant herein, in so far as grant of injunction against the respondent no.1 herein, is concerned.

2. Mr. D.V. Soman, learned Counsel appearing for the appellant, submits that since the respondent no.2 herein is a majority share holder, the Term Sheet dated 19th October 2006, is required to be construed as an agreement on behalf of respondent no.1 herein. He, therefore, submits that the learned (3) trial court has erred in rejecting the application for injunction against the respondent no.1.

Perusal of the Term Sheet dated 19th October 2006 would reveal that the agreement is between respondent no.2, representing himself and his family and other, holding in the aggregate 38.5 % of the equity shares in the Company. In order to bind the Company, in law, there has to be authorization in favour of a particular person, authorizing him to act on behalf of the Company. The said authorization can only by a resolution of the Company. Admittedly, that is not the position here. The respondent no.2 herein cannot bind the respondent no.1.

In that view of the matter, no error could be found with the approach adopted by the learned trial court, so as to warrant interference.

The appeal is, therefore, dismissed. ( B.R. GAVAI ) JUDGE ......................... bgp/25aa