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2009 (11) TMI 651 - HC - Companies LawOppression and mismanagement - bias and mala fide way of allotment of shares by a Managing Director for his own benefit - Held that:- Bereft of legal considerations etc., the act of the management in allotting as many as 2250 shares of the company in favour of two members of the company to the a exclusion of all others by itself can constitute an act of oppression and the question will be as to whether this can be said to be otherwise when tested on the touchstone of the statutory provisions of Section 397 for grant of relief and in the situations as we have mentioned above in terms of clause (a) & (b) of sub-Section (2) of Section 897. Appeal allowed for modification of the order of the Company Law Board directing company to issue six more shares on the same terms as had been issued earlier along with additional 2250 which had been issued in terms of the Resolution dated 13.12.2002 so that the total additional shares the company is issuing in favour of its existing shareholders becomes 2256 and this is to be distributed equally amongst all the then 8 shareholders that is, at 282 shares each and on the same terms. The shareholders who are getting these shares for the first time to pay the amount within four weeks from today by means of a cheque or draft in favour of the company. The Company to transfer such additional shares in favour of all members within a further 10 weeks from the date of receipt of the amount by the Company.
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