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2019 (8) TMI 999 - Tri - Companies LawOppression and mismanagement - removal of minority directors - appointment of his wife as director and transfer of 10 shares to her, etc. - HELD THAT:- The petitioners and the second respondent are first and permanent directors of the company. Therefore, they cannot be removed by the impugned proceedings and the alleged resignation of the first petitioner is also denied. In this regard, the first petitioner, namely, Puttanarayanappa Nadikeraiah, has addressed a letter dated September 18, 2014 to Mr. Nagaraj P. (respondent No. 2), by, inter alia, intimating that he came to know about his alleged resignation when he made a public inspection of documents of the company, with the Registrar of Companies on August 30, 2005 - the second respondent, though holding 70 per cent. of shareholding, cannot act arbitrary against the interests of minority shareholders (petitioners), who are none else than his family members. It is settled principle of law that affairs of company will be run basing on majority rule and courts/Tribunal, as a general principle, do not enter into internal affairs of the company unless a serious prejudice is caused to minority shareholders, contrary to law. Therefore, in order to strike a balance between majority and minority shareholders, it is necessary to intervene in the issue to the extent of removing the petitioners from the position of directors of the company. It is a fit case to exercise powers conferred on the Tribunal, under section 402 of the Companies Act, 1956 read with section 241/242 of the Companies Act, 2013 to pass appropriate orders in order to put an end to the affairs of the company. We hereby set aside the removal of the petitioners from the position of directors of respondent No. 1-company, and consequently their positions as directors are hereby restored - respondents are hereby directed to convene a board meeting of the company, within a period of two months, after duly serving appropriate notices to all petitioners, and to transact usual business by resolving their other issues if any.
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