Vimla Yadav, - (1.) IN this order I am considering Company Petition No. 11 of 2007 filed by Sh. Sergey Ivanov under Sections 397 and 398 of the Companies Act, 1956 (hereinafter referred to as the "Act") against Artlibori Resorts Pvt. Ltd (R-1) and Ors. alleging illegal increase in the share capital; illegal allotment of shares; fabrication of resignation letters of the Petitioner and manipulation and fabrication of other documents and records of the Respondent No. 1 company resulting in mismanagement of the affairs of the company and causing oppression to the petitioner.
(2.) The undisputed facts of the case are: M/s Artlibori Resorts Pvt. Ltd. (R-1) was incorporated on 17.3.2005 having its registered office at House No. 467, Temmar Vaddo, Assagao, Bardez, Goa-403507. The authorized share capital of the company was Rs. 1,00,000/- divided into 1000 equity shares of Rs. 100 each. The objects of the company was to construct or to acquire/purchase, lease or otherwise for the purpose of business of the company, any immovable or movable property and any right or privilege, which the company may think necessary or convenient for the purpose of its business and in particular any land, building, warehouses, godowns, easements, right to way, licenses, concessions, privileges and stock in trade and either to retain any property so acquired for the purpose of the company's business or to turn the same to the account as may seem expedient. Sh. Santosh Paul, Counsel for the petitioner contended that the respondents had illegally increased shares capital which constitutes oppression. It was pointed out that on 17.3.2005 the capital was Rs. 1 lakh consisting of 1000 shares of Rs. 100 each. The two shareholders in the company were the petitioner having 999 shares and the R-2 held 1 share. The R-1 in his reply states "respondent No. 1 admits that the petitioner's claim of having the initial controlling shares of the respondent No. 1 company is true". In para 6 of the petition the petitioner has stated that he owned 999 shares and the R-2 owned one share. My attention was drawn to the pleadings of the Respondents and it was contended that the R-l admits to the contents of para 6 of the petition. Further, it was pointed out that on 23.2.2006 dispatch of notice for special general meeting is shown to have been sent on 23.2.2006 as per Form 23, but the Respondents have not filed the notice or proof of having sent the notice. Purported special resolution dated 3.3.2006 was contended to be illegal because - resolution was passed behind the back of the petitioner; general body meeting can be held only with more than one shareholder; the only shareholder present is R-2; the respondent has not produced any notice; the respondent has not produced the attendance register; the respondent has not even produced proof of sending notice; the minutes of the meeting do not bear the signature of the petitioner; Section 190 of the Companies Act requires 14 days notice to be given for a special resolution [Form 23 contains the following statement: "date of dispatch of notice 23.2.2006" "date of passing of the resolution 3.3.3006"] On the face of it only 8 days notice has been given; the respondent has not produced the notice or the proof of service of notice. Section 172 required the notice to specify the place, the date, the hour of meeting and a statement of the business to be transacted thereat. In the absence of proof of the same the resolution is invalid. Further, it was contended that the respondents had fabricated resolution manifest as there are two resolutions on record showing different places of the meeting of 3/3/2006. The special resolution dated 3.3.2006 filed along with Form 23 shows that the meeting took place at Assagao in Bardez Taluka, the minutes produced show the place of the meeting at Morjim in Pernem taluka. The petitioner produced the map showing these two places to be 10 kms apart divided by the Chapora River.
(3.) FURTHER, the Counsel for petitioner contended that the respondents had increased share capital illegally as per decisions of Supreme Court and Company Law Board. The respondent has not even pleaded leave alone prove the necessity of increase in share capital. The respondents have not produced anything on record to prove the necessity for such an increase. The respondent has not placed on record anything to show the need of the company for further investment and hence need for further allotment of additional shares. The R-2 as a director owed a fiduciary duty to inform the shareholders of the company to issue shares for a proper purpose and in the interest of the company as laid down in: Needle Industries case (1982) 1 comp LJ (SC) Punt v. Symons (1903) 2 Ch 506; Moonshine Films (P) Ltd. and Shri. Rajesh Patil v. Moonshine Films (P) Ltd. and Ors. (2006) 6 Comp LJ 161 (CLB); Arun Kumar Mohta and Anr. v. Ganesh Commercial Co. Ltd. and Ors. (2006) 6 Comp LJ 351 (CLB); Dinesh Sharma and Anr. v. Vardaan Agrotech (P) Ltd. and Ors. (2007) 1 Comp LJ 155 (CLB).;