9911796707
TMI Blog2001 (1) TMI 997X X X X Extracts X X X X X X X X Extracts X X X X ..... by the company between 4-12-1998 and 26-12-1998 is null and void; and (f) to declare that respondents 2 to 10 have no authority to alienate or deal with the company's properties. 2. The acts of oppression agitated in the petition relate to the following : (i) illegal allotment of the impugned shares on 20-4-1979 in favour of respondents 3, 4 and two other members. (ii) alleged acts of oppression of the second respondent in respect of the management and affairs of the company in a manner prejudicial to the interests of the petitioner as well as the company; (iii) alleged misappropriation of the funds and properties of the company; (iv) alleged misuse of the properties of the company. 3. Shri C.A. Sundaram, senior counsel for the petitioner, while initiating arguments submitted that the company was incorporated in July, 1974 with the main object of carrying on all kinds of dairying business. However, the company ceased to carry on any business or commercial activity since the year 1979. The company has neither filed the balance sheets nor annual reports with the Registrar of Companies, Tamil Nadu and did not conduct annual general meeting for the past several years. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... avate large junks of earth from the land belonging to the company for manufacturing bricks and the benefits derived from such excavation were not accounted in the books of the company. The second respondent entered into various agreements in relation to the land of the company with a number of parties and made good profits which were misappropriated by him. The second respondent entered into development agreement with builders and took huge advances which were misappropriated by him. The second respondent created second charge on the assets of the company and availed credit facilities which remained unpaid. Shri Sundaram drew our attention to the various liabilities aggregating to ₹ 42,19,720 which, according to him, do not reflect the correct picture. According to the petitioner, the company owes much larger amount to several persons. On account of the alienation of the landed properties and misappropriation of funds of the company by the second respondent, the High Court by its order dated 20-3-1998 in C.P. No. 49 of 1987 had superseded the board of directors of the company and appointed Advocate Receiver to conduct an extraordinary general body meeting in order to elect a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be a director by the High Court on the sole ground that he did no possess the qualifying shares as on the date of his appointment as director. The High Court did not disqualify the second respondent from being elected director in accordance with the Act for ever. Accordingly, the second respondent after having acquired the qualifying shares was duly elected as a director in the extraordinary general meeting held on 20-6-1998 in the presence of Advocate Receiver appointed by the High Court. Thus the election of Directors in the meeting held on 20-6-1998 was approved by the High Court. Anyway, he resigned as a director in April, 2000. The petitioner has sought the same reliefs already claimed in the company petition before the High Court. The only new act of oppression made in the present petition relates to the increase of capital and the allotment of shares on right basis. Shri Somayajee has reiterated that the petitioner cannot complain about the increase of capital as the rightful entitlement of the petitioner was offered to him. The increase of capital was required by the company and supported by decision of the board of directors. Moreover, it is an isolated act, which canno ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e company and allotment of shares in the year 1979 and also in November, 1998 in favour of the third respondent. A close scrutiny of the petition in CP No. 49 of 1987 filed by the petitioner before the High Court of Madras reveals that all these issues, Save the allotment of shares in 1998, have been raised and considered by the High Court and appropriate orders passed. The petitioners have raised the very same issues afresh in the present petition. The High Court, in our view, having gone into the various acts of oppression and mismanagement alleged by the petitioner has passed orders in which case the petitioner is barred from raising the very same issues in the present company petition before the CLB. We are not, therefore, inclined to go into these acts of oppression and mismanagement alleged by the petitioner in the affairs of the company related prior to November, 1998. 7. In relation to events after the order of the High Court, it is on record that a new set of directors was elected in an EOGM held on 20-6-1998 pursuant to the directions given by the Madras High Court. Of the four directors elected, except the second respondent, the other three were new directors who did no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e than ₹ 45 lakhs by way of secured as well as unsecured loans besides a huge liability in regard to interest to Bank of Madura which has filed an execution petition before the Debt Recovery Tribunal claiming over a sum of ₹ 4.65 crores. We also note from the notice for the AGM convened on 24-6-2000 that the company had proposed to engage itself in marketing dairy products. Thus, without raising further funds, the company would not be able to survive leave alone revive itself. Therefore, the action of the board of directors as approved by the general body to raise fresh capital is found to be bona fide and in the interest of the company. Therefore, taking into consideration that the share capital is being raised for the benefit of the company and that the petitioner had been offered shares on a right basis, we do not propose to interfere with the decision of the general body or the Board in deciding to issue further shares. Since, we have kept the right offer to the petitioner pending till the disposal of this petition, the petitioner is at liberty to apply for his right entitlement, if need be, even for additional shares as offered by the company of about 14,000 shares ..... X X X X Extracts X X X X X X X X Extracts X X X X
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