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2012 (7) TMI 33 - HC - Companies LawWhether a management that is found guilty of converting the majority group of shareholders in a company into a minority by issuing further shares in the company without notice to the majority group is liable to be dislodged - group of shareholders represented by the petitioners before the Company Law Board was, admittedly, the majority shareholders in the company prior to the first of the impugned allotment of shares - Agarwal group, by issuing/allotting further shares in company to its group concern without notice to petitioners, had converted petitioners into minority shareholders and had acquired management/control of company - CLB found that issuance of further shares was without convening shareholder's meeting and without passing appropriate resolutions therefor, yet it did not set aside impugned allotment and directed a shareholders' meeting to be convened by company on basis of shareholding as on October, 2003 – Held that:- Sarda group, had promoted the company and were at the helm of its affairs till the arrangement with the Agarwal group by which the Agarwal group was installed in the management ; but the Sarda group continued to hold the majority shares in the company - Agarwal group was to remain in the management of the company at the pleasure of the Sarda group - Agarwal group then to have taken advantage of its managerial position in the company to issue further shares unto itself and to denude the Sarda group of its majority control, was a grave act of oppression - CLB found as a matter of fact, that allotments were made without complying with legal requirements therefor and without notice to petitioners, allotments to be cancelled
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