K.K. Balu, J. - (1.) THE petitioner holding 50 per cent of the paid-up capital of M/s Girnar Packaging Pvt. Ltd. ("the Company") has filed this petition under Section 397/398 of the Companies Act, 1956 ("the Act") alleging various acts of oppression and mismanagement in the affairs of the Company.
(2.) The main acts of oppression and mismanagement in the affairs of the Company, agitated in the petition relate to the following:- (a) Unlawful withdrawal of the huge fixed deposits of the Company deposited with its Banker; (b) Finalisation of the annual accounts of the Company, inflating the expenses without the knowledge of the petitioner; and (c) Serious dead lock in the management of the Company. Shri H.S. Harish, Advocate appearing for the petitioner has submitted that the Company was incorporated in July, 1987 with authorized capital of Rs. 15 lakhs consisting of 15,000 equity shares of Rs. 100/- each. The petitioner is holding 7,500 equity shares and respondents 2 & 3 together holding 7,500 equity shares in the Company. The main objects of the Company are to carry on the business of manufacture of packing materials etc. The petitioner and respondents 2 & 3, being father and son are directors of the Company. The petitioner and the second respondent have been managing the affairs of the Company. Though the Company was having stable business, the Company incurred losses on account of the recession in the market. Ultimately, the Company closed its business in October, 2000. At the time of closure, the Company had fixed deposits of more than Rs. 15 lakhs with its Banker, which were wrongfully withdrawn by the second respondent in collusion with the third respondent and the Company's Banker. As the parties do not intend to resume the business of the Company, the petitioner now seeks to appoint a Commissioner for sale of the assets of the Company and for distribution of the sale proceeds among the creditors and shareholders of the Company.
(3.) ACCORDING to the respondents, the Company closed its business as early as in October, 2000. The Board of Directors had resolved at the Board meeting held on 17.02.2001 to withdraw the fixed deposits with its Banker in order to meet the current obligations, including the repayment of unsecured loans. The petitioner failed to attend the said Board meeting in spite of the notice of Board meeting sent to him. The petitioner is not attending any of the Board meetings, in spite of the communications sent to the petitioner for such meetings. The respondents have been duly complying with statutory requirements of the Act. As the Company is closed its business, the respondents are willing to sell the assets of the Company and distribute the proceeds among the creditors and shareholders of the Company, as proposed by the petitioner. The respondents have filed a memo dated 04.03.2003 stating that the petition may be disposed of on merits.;