Ch. Mohd Sharief Tariq, Member - (1.) Under consideration is the Petition filed under Sections 397 & 398 of the Companies Act 1956 before erstwhile Company Law Board alleging various acts of oppression and mismanagement in the affairs of M/s. Jayabharat Textiles Pvt. Ltd. (for short, the Company).
(2.) The First Respondent Company was registered as a Private Limited Company by shares in the year 1990 to carry on the business of producing and selling yarn and other textiles. The Petitioner and 2nd Respondent are the only equity shareholders of the company holding 50% each (1,25,000 Shares) of the paid up capital of the Company. Further, four other persons who are closely related to the Petitioner and Respondent No. 2 are the preference shareholders and they have been allotted each 25 numbers of 12% redeemable Non-cumulative preference shares of Rs. 10 each on 16/5/1990. The Petitioner is the father and 2nd Respondent is the son. The Petitioner was the Managing Director of the Company from its inception and during AGM held in the year 2010 the Petitioner and the 2nd Respondent were re-appointed as directors of the Company.
(3.) When the company was unable to realise its full potential, the Petitioner being the Managing Director in a bid to enhance the production of the company was considering various options, however there were difference of opinion that cropped up between the Petitioner and the Respondent No. 2.;