TMI Blog2010 (5) TMI 691X X X X Extracts X X X X X X X X Extracts X X X X ..... he petitioners submitted that the petition was originally moved before the Principal Bench, New Delhi on 19-5-2009. However, the Principal Bench directed to file the petition before the Mumbai Bench, since the matter pertains to the Mumbai Bench. The petition was mentioned before this Bench on 8-6-2009 and this Bench directed the respondents to file reply by 26-6-2009 and the matter was posted on 29-6-2009. On 29-6-2009 the director of the company Mr. Hiten Mange, was present and sought fifteen days time to file counter and the matter was posted to 3-8-2009. On 3-8-2009 the respondents failed to appear before this Bench and the petitioner requested this Bench to order for an investigation without any further delay. The matter was called on 30-3-2010, none appeared for the respondents, however, a representative on behalf of the petitioner was present. This Bench once again directed the respondents to file counter within a period of two weeks and the matter was posted on 26-4-2010 at 2.30 p.m. A notice was also sent along with the copy of the order to the respondents. The matter was finally called on 26-4-2010, none appeared for the respondents. Since sufficient time was given to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... requirement, the directors contravened the provisions of sections 159, 166, 210 and 220 of the Act. Even the directors failed to intimate, the shareholders about the reasons for non-convening the annual general meetings. The non-furnishing of two years annual accounts is a deliberate act to suppress certain financial and management related transactions that took place during those two years period. (iv)The directors failed to present the directors report in a manner as enumerated under section 217 of the Act. The directors report for the financial year commencing from 2001 to 2008 is silent on important issues such as comments on the qualifications in audit report, directors responsibility statement, proper reasons for non- conducting of seven years annual general meeting, etc. (v)The directors failed to appoint a whole time company secretary as per the procedure laid down under section 383A of the Act. (vi)The directors misused the company funds for personal gain. The company invested rupees three crores in another company called Rutvij Chemicals Limited by purchasing its 30 lakhs equity shares. However, this investment and its funds have no reference in the subsequen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssible for the directors to finalise the company s annual accounts. (x)The most important aspect is that the hon ble BIFR in a judgment on Company Application No. 89 of 1999 made a serious observation by remark that the company wrongly represented the banker s dues, as no dues by transferring the secured creditors outstanding to a deficit account running to several crores. Further, the BIFR observed that the balance-sheet of the company as on 31-3-1998 which was derived from the balance-sheet as on 31-3-1996 could, therefore, not be fully relied upon. Summarising the above facts, it is submitted that the directors deliberately committed and violated the above acts and prayed this Bench to pass orders keeping in view the interests of the shareholders at large. 4. Heard the learned practising company secretary and perused the pleading and documents filed in his support. From the perusal it is clear that the directors have violated various provisions of the Act and committed various acts which are prejudicial to the interest of the company and its shareholders at large. It is also seen from the documents that the Registrar of Companies, Gwalior issued notice dated 2-9-2008 to its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... embers. To protect the interest of the company and its shareholders and also to up keep the faith of the public in the judicial system (Quasi Judicial Bodies), this Bench certainly comes to the rescue of the petitioners and its shareholders to do substantial justice by ordering an investigation by invoking the provisions of section 237(b) of the Act. The said provision is extracted hereunder for easy reference : "237. Without prejudice to its powers under section 235, the Central Government: (a )shall appoint one or more competent persons as inspectors to investigate the affairs of a company and to report thereon in such manner as the Central Government may direct, if (i )the company, by special resolution ; or (ii )the court, by order, declares that the affairs of the company ought to be investigated by an inspector appointed by the Central Government; and (b )may do so if, in its opinion or in the opinion of the Tribunal, there are circumstances suggesting (i )that the business of the company is being conducted with intent to defraud its creditors, members or any other persons, or otherwise for a fraudulent or unlawful purpose, or in a manner oppressive of any of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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