TMI Blog2002 (8) TMI 869X X X X Extracts X X X X X X X X Extracts X X X X ..... r from the affairs and management of the Company, diversion of business and funds of the Company, manipulation of the expenses incurred by the Company, unauthorized sale of the assets of the Company, unlawful writing off huge debts of the company and misappropriation of funds. 3. Shri Krishna Srinivasan, Advocate appearing for the petitioner, while initiating his arguments submitted that initially the printing business was carried on by the respondents 2 and 3 as a partnership concern, wherein the petitioner was subsequently inducted as a partner in April 1986, all the three being equal partners and the petitioner being a qualified technical partner. With the growth of business, the partnership was converted into a private limited compan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... disposed the assets of the Company for a loss. The Company had to incur a loss of ₹ 95 lakhs in the year 1999-2000 on account of the mismanagement by respondents 2 to 4. The respondents inflated consumption of raw materials at more than 90 per cent and manipulated the expenditure, which has gone as high as 158 per cent. In the process, the respondents diverted profits of over ₹ 48 lakhs to themselves. The annual general meeting of the Company for the year 1999 was held in September 1999. Annual general meeting for the year 2000 was conducted after 20 months. The respondents have not chosen to finalise the accounts for the year 2001 violating the provisions of Section 166 of the Act. The respondents' mismanagement resulted i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioner continues to be a director of the Company he never participates in the management and affairs of the Company. He further pointed out that the petitioner himself had started his own printing business in 1986-87, without the knowledge of the respondents, which incurred a huge loss and has bank liability of ₹ 20 lakhs. According to Shri Datar, the petitioner sought the assistance of the respondents to bail him out from the financial difficulties resulted on account of his private business, which was declined by the respondents resulting in filing of this petition. Shri Datar justified the borrowal from Global Trust Bank as well as the sale of land by the Company, by which the petitioner has never been aggrieved. Shri Datar po ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stained. In this connection, he relied on (i) Ravi Shankar Taneja v. Motherson Triplex Tools (P.) Ltd. [2001] 4 CLJ 102 (CLB) - To show that in case of allegations of mismanagement, siphoning off of funds without giving any particulars or details, no adjudication on these issues is possible on the basis of suspicion and surmises; (ii) Allianz Securities Ltd. v. Regal Industries Ltd. [2001] 4 CLJ 314 (CLB) to show that the allegation of diversion and siphoning off funds for personal use without particulars substantiating such allegations cannot be taken cognizance by the CLB; and (iii) Jaladhar Chakraborty v. Power Tools Appliances Co. Ltd. [1994] 79 Comp. Cas. 505 - to show that the acts of oppression must not only be alleged wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the consumption of raw-materials and manipulated expenses. The petitioner on his own admits that he had been excluded from the management from 1996 onwards. There is nothing on record to show that at any point of time, he had attempted to enforce his rights as a director for this long period. More so, when he claims himself to be the only technically competent person. Therefore, as far as allegation that he has been excluded from the management cannot be considered at this belated time. In respect of other acts of mismanagement like diversion of funds, manipulation of expenses, unauthorized sale of asset etc. as alleged by him have not been substantiated, without which we are not inclined to grant any relief, as has been upheld by the Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t go into as to the source of investment. However, since the respondents had produced an affidavit from Shri Bijal K. Patel, who is purported to have arranged the loans through M/s. Chittamoor Holdings and Finance (P.) Ltd. and M/s. Chottabhai and Company to the petitioner for subscribing to the shares, which was later repaid by the second respondent, we gave the opportunity to the petitioner to rebut the same. The petitioner has now produced two letters dated 21-6-2002 and 10-7-2002 from M/s. Chittamoor Holdings and Finance (P.) Ltd. The letter dated 21-6-2002 shows that loans were taken by the petitioner and respondents 2 and 3 during June 1995 from M/s. Chittamoor Holdings and Finance (P.) Ltd. These loans were settled by them during the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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