Cp no. 15 of 2008. Case: Gyan Dev Sadh and Others Vs Parmeshwar Exports (P.) Ltd. and Others. Company Law Board
| Case Number | Cp no. 15 of 2008 |
| Judges | Kanthi Narahari, Member (Judicial) |
| Issue | Companies Act, 1956 - Sections 397, 398, 399, 402; Specific Relief Act 1963 - Section 34 |
| Citation | 2012 (107) CLA 265, 2011 (168) CompCas 341 (CLB) |
| Judgement Date | October 05, 2011 |
| Court | Company Law Board |
Order:
Kanthi Narahari, Member (Judicial)
-
The present petition is filed by invoking various provisions of the Companies Act, 1956 ('the Act') alleging certain acts of oppression and mismanagement in the affairs of the company and sought declaration that:
(a) and (b) All the Board resolutions and shareholders resolutions passed by the respondents 2 to 6 from September 2003 are illegal, null and void.
(c) R1 is quasi-partnership between the petitioner No. 1 family and respondent No. 2 family with 50: 50 ratio and the same to be maintained in future.
(d) Equity share capital of R1-company will not be increased without express consent of petitioners.
(e) and (f) Any agreement to sell, transfer, alienate or any purported lease agreement entered into the R1-company and R8 in respect of fixed assets situated at Plot at MIDC Andheri without consent of the petitioners to be set aside.
(g) Non-sending of notices and non-holding of the Board and general meetings are illegal.
Shri Sanjay Maria, learned counsel for the petitioners, narrated the brief facts. He submitted that R1-company was incorporated as a private limited company on 27th April, 1976 by Late Shri Parmeshwar N Sadh along with petitioner No. 1, respondent No. 2 and Basudev Sadh. It was registered with the Registrar of Companies ('RoC'), Maharashtra. The petitioner Nos. 1, 2 and 3 hold 25,000 equity shares of Rs. 100 each out of total of 50,000 equity shares of Rs. 10 each representing 50 per cent of the issued, subscribed and paid-up share capital of R1-company. The respondent Nos. 2 to 6 hold 25,000 equity shares of Rs. 100 each out of total of 50,000 equity shares of Rs. 10 each representing 50 per cent of the issued, subscribed and paid-up share capital of R1. It is further submitted that R1 is a quasi-partnership between the petitioner No. 1 family and the R2 family on 50: 50 basis. It was agreed upon between the petitioner No. 1 family and the R2 family that the same ratio will always be maintained in future as well. Petitioner No. 1 and the R2 had signed the annual accounts for the year ended 31st March, 2003 and after that the R2 has not sent any annual accounts for the years ended 31st March, 2004, 2005, 2006, 2007 and 2008, respectively. Petitioners requested R2 to 6 to provide the progress report of business of the R1 and the use of the property at Andheri (East) Mumbai owned by the R1 but the R2 to 6 always postponed the matter on one pretext or the other and never provided the report of the same. Petitioners requested the R2 to 6 to provide inspection of the property situated at Andheri (East), Mumbai of the R1 but the R2 to 6 never allowed the petitioners to enter the property at all. Petitioners also requested the R2 to 6 to provide the notice of Board meetings and general meetings and minutes of the same but the R2 to 6 never provided any statement while understanding well that the petitioners are 50 per cent partners in the quasi-partnership.
-
It is further submitted that the petitioners decided to inspect the records of the R1 with the RoC and inspected the records of the R1 on 10th April, 2008 and shocked to know that further 49,960 equity shares have been allotted by R1-company and the paid-up share capital has been increased to 50,000 equity shares. The petitioners have also come to know that R2 to 6 are using the property of R1 situated at Andheri (East), Mumbai for their own personal use and not for the purpose of the business of R1; and it is found that there is no revenue generating for R1 which is clear and unambiguous case of diversion and siphoning off the funds of R1-company. The petitioners have also come to know that the R2 to 6 have given the property of R1-company situated at Andheri (East), Mumbai on lease to. R7 without the knowledge and consent of the petitioners. The petitioners requested the R2 to 6 as well as the R7 to produce the copy of the lease agreement entered into between the R1 and R7. The petitioner No. 1 has come to know from the correspondence exchanged with the R7 that the said purported lease agreement was approved in the alleged Board meeting held on 15th December, 2005 while the fact is that the petitioner No. 1 never received any notice of the said alleged Board meeting of the R1-company. The respondents are using the R1-company as a vehicle for their personal enrichment. The petitioners have now also learnt that as a part of their design to deny and deprive the legitimate rights and expectations as shareholders, as also of the fruits of their labour and vision, the R2 to 6 have been siphoning away valuable assets and rights of the R1-company. The sole motive of R2 to 6 is to exclusively take over the R1 and its management to the exclusion of the petitioners, with the ultimate aim and objective of converting the company into their personal business for their personal benefits and enhancement. It is further submitted that R2 to 6 are not interested in the welfare and well being of the R1 but is actively engaged in illegalities and misconduct and misappropriating assets to their personal accounts under his control which is prejudicial to the R1 and the petitioners as the 50 per cent shareholder of R1. Such actions are bound to result into winding up of the R1. The learned counsel further submitted that the respondents admitted the fact that the petitioners and the respondents are equal shareholders. After September 2003 the petitioners were excluded from the management and the respondents are only in the management. The R2 appointed R3 as director. He contended that there must be clear denial in respect of pleadings if there is no admission either denial or admission it amounts to admission of fact and in support thereof he relied upon the following citations: (i) Badat & Co. v. East India Trading Co. AIR 1964 SC 538 at paras 11 and 13 and (ii) Sushil Kumar v. Rakesh Kumar AIR 2004 SC 230.
-
The respondents have filed detailed reply to the petition. Shri Madon, learned senior counsel narrated the brief facts and submitted that the present petition proceeds on the basis of totally false and/or misleading allegations to the effect that the petitioners are the shareholders and are entitled to act as directors and have an interest in the property and asset owned by the Gyandev Sadh Co. The petitioners have also suppressed from this hon'ble Bench that in fact and on the contrary, by and Under a family arrangement arrived at, inter alia, between the petitioners and the respondents, on 30th August, 2004 and 11th September 2004, it has been, inter alia, agreed between the parties that the shares held in the name of the petitioners belong to Mr. Bazzardev Sadh and the petitioners shall resign as directors of the respondent No. 1-company. The said family arrangement/settlement has been substantially implemented and pursuant to such implementation, inter alia, the possession, of the property held in the name of the Gyandev Sadh Co. has been handed over to the respondents and they are in exclusive use, occupation, possession and enjoyment. The respondents are receiving and appropriating the income and profits as well as making payment of the outgoings in respect of such properties. Since the petitioners have failed and/or neglected and/or delayed completing the remaining part of the implementation, the respondents have filed a suit in the hon'ble High Court being Suit No. 1937 of 2008. The petitioner No. 1 and R2 are brothers and sons of late Mr. Parmeshwar Narain Sadh. The Bazzardev Sadh group and the Gyandev Sadh group are parties to the family arrangement/settlement and accordingly the division has taken place in the following manner. Ananya Fashions (P.) Ltd., Arsh Fashions (P.) Ltd...
To continue reading
Request your trial