Vimla Yadav, Member - (1.) IN this order I am considering Company Petition No. 49 of 2005 filed by Shri Pannalal Rathore and others against the respondents particularly against respondent No. 2, namely, Shri Harish Bhasin alleging acts of oppression and mismanagement under Sections 397 and 398 of the Companies Act, 1956 ("the Act").
(2.) M /s. Charizma Buildcon (P.) Ltd., respondent No. 1 -company, having its registered office at 816, Arunachal Building, 19, Barakhamba Road, New Delhi -110 001 was incorporated on May 7, 2004, under the Companies Act with the main object to carry on the business as owners, builders, developers, promoters, proprietors, occupiers of residential, commercial and industrial building and to deal in all kinds of immovable properties. Respondent No. 1 -company was incorporated as a closely held private company by the petitioners Nos. 1 to 4 along with respondents Nos. 2 to 5 with the shareholding of Rs. 5 lakhs wherein the petitioner group was holding a majority shares of 66.66 per cent and the respondent group (Nos. 2 to 5) was holding 33.33 per cent. Shri U.K. Chaudhary, counsel for the petitioners, argued that on February 23, 2005, respondent No. 2 illegally and unlawfully increased the authorised share capital of respondent No. 1 -company to Rs. 8,00,000 reducing the shareholding of the petitioners to 48 per cent The above allotment of shares was illegally made by respondent No. 2 to himself by excluding the petitioners and without any board meeting or any notice to the petitioner. The allotment is illegal and unlawful being breach of his fiduciary capacity as a director shareholder in the company. This mala fide allotment for personal benefit requires to be set aside. Reliance was placed on the case of Dale and Carrington Invt. P. Ltd. v. P.K. Prathapan . Neither a valid board meeting was conducted nor due notice was given by the respondent -company. The respondent has failed to produce any proof of despatch of proper notice to the petitioner. The onus of proving the despatch of the notice was on the respondent. Reliance was placed on the decisions in the case M.S. Madhusoodhanan v. Kerala Kaumudi P. Ltd. were referred; Parmeshwari Prasad Gupta v. Union of India were referred. Further, it was argued that Section 286 of the Companies Act, 1956, specifically provides that notice is to be sent to all the directors.
(3.) IT was argued that all the minute books of respondent No. 1 are fabricated by the respondents. The respondents have illegally shown the presence of some of the petitioners in the board meeting. No attendance register has been shown by the respondents and the respondents have illegally shown the presence of the petitioners. Increase in the share capital is illegal as the same was not discussed in any board meeting. Increase in the authorised capital from Rs. 5 lakhs to Rs. 8 lakhs was shown in the first board meeting of the company on May 7, 2004. No meeting of the company took place on May 7, 2004 and only a resolution for opening the bank account and authorising respondent No. 2 to purchase the property on behalf of the respondent -company was passed. The respondent has manipulated the minutes book to show some more resolutions passed in that meeting which are false and fabricated. Further, petitioner No. 4 (Shri Vijay Adlakha) signed the extract of the minutes for authorising respondent No. 2 to purchase the property. However, there are no signature of petitioner No. 4 on the minute book which show the large scale manipulation by respondent No. 2. The increase in the authorised capital is also illegal because Form No. 5 was filed in the Registrar of Companies office only on February 23, 2005, whereas the resolution for increase in the authorised capital was shown to have been passed on May 7, 2004. Similarly, the resolution for allotment of shares has been shown as May 31, 2004, whereas Form No. 2 is dated February 5, 2005 and was filed with the Registrar of Companies on February 23, 2005, i.e., nine months after the purported board meeting. The said increase is also illegal and an after thought, as the search report clearly shows the nominal capital was Rs. 5 lakhs only when Form No. 32 for the illegal appointments was filed whereas it has been shown as Rs. 8 lakhs when Form No. 2 was filed. Therefore, as on that day there was no share capital in the company and the company could not have allotted any shares to respondent No. 2. Thus, it was argued, the respondents have indulged themselves in large scale fabrications and falsification of records. Respondent No. 2, it was argued, has allotted 17,500 shares to himself against his loan amount of Rs. 1,75,000, by way of this illegal and unlawful allotment. Respondent No. 2 has reduced the majority shareholders into minority. Till date he has not explained the reason for increasing his shareholding in the company. Further, if the company wanted to increase his shareholding in the company only on the day of incorporation then why the petitioners were given the majority shareholding at the time of incorporation. On the day of passing of the said resolution the following amount was shown in the loan account of the company: Petitioner group 10 lakhs Respondent No. 2 (Harish Bhasin) 1.5 lakhs Total capital = 5.00 +1.75 lakhs Thus, if respondent No. 2 was allotted shares against his loan amount pending in the company then the same would have also been allotted to the petitioners as the petitioners had more loan amount in the books of the company. Therefore, it was argued, the said allotment is nothing but illegal and unlawful act of respondent No. 2. Further, it was pointed out that all the documents relating to the illegal allotment and increase in the authorised capital have been filed only by respondent No. 2 himself which shows the manipulation undertaken by respondent No. 2 himself.;