- (1.) Tin Plate Dealers Association Pvt. Ltd. (hereinafter referred to as "the said company") was incorporated under the provisions of the Indian Companies Act, 1913. The company for substantial period had no activity save and except receiving income from immovable property. The company had a large plot of land at New Delhi on lease from Delhi Development Authority acquired in 1981. It was a closely held company. The shares were held by the Sanwalka group and the Gupta group. Prior to 1986 one Satyasil Gupta was in control and management of the said company whereas the entire shareholding belonged to him and his family members. In 1986 the Sanwalka were invited to join the company. They were allotted shares in the company. The shares which were allotted to the Sanwalkas, were originally held by M/s. Gupta Brothers (a concern of Gupta) who did not respond to the unpaid calls and thereby the shares were forfeited. Those forfeited shares were allotted to the Sanwalkas. At the time of issuance of such shares the company, however, accepted the partly paid up value of the shares. The shares were Rs. 100 each whereas the paid up value was Rs. 35 per share. The letters of allotment of shares are appearing at pages 127-134 of the paper book. According to the Sanwalkas no call was ever made to them by the Guptas who were in control of the company. Hence, the Sanwalkas could not pay the balance value of the shares. According to the Guptas, by letters appearing at pages 135-143 calls were made on January 5, 1991. However, the Sanwalkas did not respond to the said call. Hence, their shares stood forfeited. According to the Sanwalkas, none of those letters were received by them. The Guptas also could not prove receipt thereof. The contents of the letters allotting the shares and the contents of the letters making a call are quoted below : thank you for your letter dated May 16, 1986 and the two drafts enclosed therewith for transfer of shares from Gupta Brothers today. In compliance of the decision of our board of directors, we send herewith the following share scrips : 1. Share Certificate No. 011 for 2032 equity shares of Rs. 100 each-paid up value Rs. 35 per share, distinctive Nos. 1869 to 3900. Please acknowledge receipt in good order. We welcome you as our shareholder. You are holding 2032 partly paid up shares of the company in account of M/s. Gupta Bros, in terms of the amicable settlement arrived at the time of reissue of the said shares. The balance amount due thereon at Rs. 55 per share along with the interest accrued since January 1,1907 till December 31,1990 was payable on or before December 31, 1990 as per the amicable settlement You have failed to make the payment in time. You are hereby called upon to make payment of the outstanding call of Rs. 55 per share on or before April 11,1991, along with interest due thereon till December 31, 1990, i. e, Rs. 380 per share. A copy of the board resolution of date is enclosed for your information.
(2.) After the shares, according to the Guptas, were forfeited the company increased the holding of the Guptas. Preference shares and bonus shares were also issued to them making the Sanwalkas in insignificant minority even if the shares are held to be not forfeited as on the date of making the application before the Company Law Board. It was also alleged that the Guptas dealt with the immovable property by making an unlawful gain to the detriment of the interest of the company at shockingly by a low price.
(3.) In the backdrop the Company Law Board was approached by the Sanwalkas, inter alia, under Sections 397 and 398 of the Companies Act, 1956, alleging oppression and mismanagement. In the petition before the Company Law Board the Sanwalkas made inter alia the following grievances : (1) There had been increase of capital without any notice to them ; (2) The meetings were not held as per the provisions of the Companies Act ; (3) The representatives of the Sanwalkas were removed from the board without following due process of law ; (4) Outsiders were brought in within the private limited company without having due consent of Sanwalkas ; (5) There had been unlawful allotment of bonus shares.;