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2017 (7) TMI 666 - Tri - Companies LawOppression and mismanagement - maintainability of petition - Held that:- Contention of the Respondent challenging the maintainability of the present Petition does not stand as the Petitioner being the daughter and the successor-in-interest to the estate of the Late NCG represents a part of the deceased's property as a representative and therefore can be deemed to be a shareholder of 11.6% shareholding in the company through the Late NCG. The Petition is therefore maintainable Respondents were guilty of mismanaging the affairs of the Company so much so that it led to the Company's name being struck off the list of active companies. In addition to it the appointments of the various directors in the Company were done contrary to the statutory provisions and Articles of Association of the Company. For these reasons, it can be concluded that the public company is being run in a manner prejudicial to the interests of the stakeholders of the Company. Moreover, the Company as per a special resolution passed on 26th October, 1990, the Company became public under Section 44 of the Companies Act, 1956 and the word “Private” was deleted from the name of the company. However, the Articles of Association of the Company continue to reflect the present company being a private company. The Articles of Association of the Company needs to be amended to that effect. Petition is partly allowed. The Respondents are hereby directed to fulfil all the statutory compliances for a public limited Company as has been mandated under the Companies Act, 1956 with respect to the appointment of the directors to the Board. It is directed hereby that the Petitioner be given the right to partake in the management and the affairs of the Company to the extent of the shareholding she is entitled to. The Respondents are directed to amend the Articles of Association of the Company to reflect that the Company is a public limited company and not a private limited company. Preliminary decree is being passed for the appointment of a special auditor and conducting a special audit for auditing and for verification of the accounts of the Company. The expenditure of the special auditor and the audit to be conducted will be borne by the Respondents. Moreover, the shareholding in the Company that the Petitioner is claiming to be entitled to, is a part of the inheritance dispute that is pending at the Civil Court. Since the Tribunal herein is concerned with the issue of oppression and mismanagement, any finding by the Tribunal or the order passed herein shall have no effect on the aforementioned Civil Partition proceedings pending between the parties in any Civil Court
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