K.K.Balu, - (1.) IN the company petition filed by Shri Devendra Gupta ("the petitioner") under Sections 397 and 398 of the Companies Act, 1956 ("the Act"), alleging certain acts of oppression and mismanagement in the affairs of M/s. Picnic Park Hotels Private Limited ("the company"), the petitioner has filed the present application praying for the following reliefs: (a) to appoint a qualified chartered accountant to finalise the annual accounts of the company commencing from April 1, 2003, till date; (b) to appoint a commissioner to initial all the statutory books and accounts maintained by the company; (c) to appoint a commissioner to fix a date for convening and conducting the annual general meeting of the company from the financial year 2003-04 till date; (d) to direct the second respondent to deposit a sum of Rs. 7,02,500 already spent by the petitioner; and (e) to direct the second respondent to periodically submit a copy of the statement of receipts and payment of the company every week.
(2.) Shri Tha Sirish Chowdhary, learned Counsel, in support of the applicant submitted: The company was engaged in the business of running a hotel, which came to be closed as early as on March 11, 2005. However, the hotel could be re-opened on March 20, 2005, with the initiative of the petitioner, towards which he had incurred expenses amounting to over Rs. 7 lakhs, as per the details given in the instant application. In the course of the proceedings, this Bench by an order dated January 5, 2005, appointed a commissioner to administer and manage the affairs of the company. This order has been kept in abeyance, in the light of certain mediation for settlement among the parties. The second respondent is acting in a manner which is causing serious prejudice to the interest of the company. With the intervention of the family well wishers, a proposal to resolve the disputes was mooted out, which resulted in two memorandum of understanding between the parties. The applicant was ready and willing to comply with the terms of the MoUs, but the second respondent and other brothers were not prepared to perform their part of the MoUs and ultimately the second respondent filed a civil suit in O.S. No. 498 of 2005 before the High Court of Madras. Consequently, this Bench stayed the proceedings of the company petition, till disposal of C.S. No. 498 of 2005. The High Court was pleased to dismiss C.S. No. 498 of 2005 by an order dated July 23, 2007. The company which is in the management of the second respondent has not convened any annual general meeting for over three years and the last annual general meeting was convened for the year ended March 31, 2003. The company neither adopted the accounts nor filed before the Registrar of Companies or the Income-tax authorities. If the annual general meetings are not convened, serious prejudice will be caused to the company and the shareholders. Hence, the applicant sought for appropriate directions of the Bench. Shri S.R. Raghunathan, learned Counsel, while vehemently opposing the prayer of the applicant, submitted: The present application is liable to be dismissed, in view of the order dated January 22, 2007 made in C.A. Nos. 181, 121 and 182 of 2006, (Sunitha Gupta v. Devendra Gupta, [2008] 141 Comp Cas 157 (CLB)) whereby the proceedings of the company petition have been stayed till disposal of the civil suit in C.S. No. 498 of 2005, already filed by the second respondent. The second respondent and his wife being the fifth respondent herein have filed a suit in C.S. No. 912 of 2006 before the High Court of Madras seeking for a declaration that the memorandum of understanding dated October 10, 2005, between the parties, merged with the MoU dated January 8, 2005, shall be binding upon the parties thereto and allocate the properties and that the petitioner herein is entitled to hold, possess enjoy and run the business in the manner contained therein and for several other reliefs. In the light of C.S. No. 912 of 2006, the High Court by an order dated July 23, 2007, closed C.S. No. 498 of 2005. By virtue of this order and finding that C.S. No. 498 of 2005 has actually merged with the prayer in C.S. No. 912 of 2006, the High Court categorically found that the order passed by the CLB on January 22, 2007 in the light of pendency of C.S. No. 498 of 2005 shall not be affected by the closure of C.S. No. 498 of 2005. Hence, the order dated January 22, 2007 of the CLB staying the proceedings in C.P. No. 56 of 2004 holds good and consequently the present application is liable to be dismissed.
(3.) SHRI Sirish Chowdhary, learned Counsel, in his rejoinder pointed out that the applicant has filed a review application in April, 2008 before the High Court of Madras to review the direction given on July 23, 2007 in C.S. No. 498 of 2005 closing the civil suit, namely, C.S. No. 498 of 2005 and is pending adjudication and disposal. There is, therefore, no impediment for the CLB to proceed further in the matter.;