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2010 (7) TMI 820 - KARNATAKA HIGH COURTWhether the finding of the Company Law Board to the effect that the case of oppression and mismanagement is made out, calls for interference ? Whether the directions issued are in accordance with law or do they call for any interference ? Held that:- Increase in the share capital was for starting a new business, which was never started. Even the consideration paid for the increase in the share capital was withdrawn by way of a housing loan by the directors. When the majority shareholders sought to remove the directors, the said decision was not implemented. It is under these circumstances that the Company Law Board, on a proper appreciation of the admitted and proved facts as evidenced by documentary evidence, rightly held that these acts of respondents Nos. 2 and 3 amount to oppression and mismanagement. The said finding is based on legal evidence. We do not find any good reason to interfere with the well-considered order passed by the Company Law Board, keeping in mind the legal position and evidence as revealed from the material on record. The order of the Company Law Board is upheld. However, in respect of refund of share application money of ₹ 16,00,000 is concerned, the amount outstanding and recoverable from respondent No. 2 by the first respondent-company in its audited books of account shall be deducted from the same and respondent No. 2 will also be given benefit of the amounts shown as due to respondents Nos. 2 and 3 from the first respondent-company in the audited books of account of the first respondent-company in calculating the audited amount refundable towards refund of share application money.The process shall be completed in seven months time from the date of the order.
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