In a letter to DCA, Chhabria's lawyers Mulla & Mulla & Craigie Blunt & Caroe stated, ``looking at the speed and urgency with which the approval was granted our client feels that all the facts and circumstances behind such appointment may not have been brought to the knowledge of the DCA.''

``If DCA was aware that the annual general meeting (AGM) of HL was fixed within 31 days from the date when Mallya was appointed as the managing director by the board of directors and since under Section 269 (3) of the Companies Act an application seeking approval from DCA from the appointment of managing director has to be made to central government with a period of 90 days from the date of such appointment, it would have been natural that the DCA instead ofrushing with the clearance ought to have waited till the AGM was over to ascertain whether the majority of the shareholders approve the same,'' the letter said, questioning the appointment of Mallya as MD of the company just before the AGM.

``In any event, as is the usual practice, the DCA ought to have deferred the consideration till the approval of the general body is obtained and should have so informed the company. The fact that this usual procedure was not followed and the fact that such condition has not been set out in the approval letter itself clearly vitiates the approval,'' the letter said.

M D Chhabria, uncle of Kishore Chhabria, controls -- through various companies -- over 50 per cent of HL, and it has already filed with HL resolutions proposing removal of Mallya from the board. ``Under these circumstances, our client strongly feels that the approval from the DCA should have been sought by HL only after the completion of the AGM and in any event after approval of the shareholders was soughtand obtained at GM of the HL,'' the letter said.

``This letter is being addressed as an objection to the wrongful action of the part of the DCA granting such approval in violation of all norms. On behalf of Chhabria, we hereby call upon the DCA to withdraw the approval which has been wrongly and illegally granted,'' the letter said.

Chhabria had earlier served two notices to Herbertsons seeking the removal of Chairman and Managing Director, Vijay Mallya and three other Mallya nominees in the AGM. The Mumbai High court has said that the resolution seeking Mallya and the removal of his directors should be voted and the proxies be kept in a sealed envelop with the registrar of the court till the next hearing scheduled for February 9, 1999.

Meanwhile, when asked to comment on any possible patch-up before the AGM, sources close to the Chhabria family said, ``the present environment is not congenial for any rapprochement.'' There is no question of any deal with Mallya, they said.