V.S.R. Avadmni, Member - (1.) Both these Company Petitions are filed under Sections 397, 398, 399, 402 and 403 of the Companies Act, 1956 for various reliefs. These two Company Petitions are relating to the company called "Omkaleshwar Colonizers Private Limited" which was earlier called as "Onkareshwar Colonizers Private Ltd. These petitions are counter to each other and are taken for final disposal by the common order to avoid conflicting views. We propose to make a short reference to the contentions of both parties, relevant to each act of oppression and mismanagement.
(2.) In CP 54 the 2nd Respondent Mr. Satish Kumar Singh is the Petitioner in CP 75; whereas, the Petitioners 1 and 2 in CP 54 are Respondents 2 and 3 in CP 75, besides two other Respondents Mr. Vinod Kumar Singh and Syndicate Bank (Respondents 4 and 5 respectively). In both the Petitions, the Company is 1st Respondent. The main relief in CP 54/16 is to set aside Form SH-7 dated 5.3.2015 relating to increase of authorized capital of the Company from 11 lacks to 50 lacks; whereas in CP 75/2016, the main relief is to declare that the Respondent No. 2 therein who is the Petitioner No. 1 in CP 54/16 has caused breach of fiduciary duty as Director of the company. In both the matters, the other reliefs are either supplementary or incidental to the above reliefs and this common order mainly addresses on those core reliefs. For the purpose of convenience, in the discussion, the parties are referred as per their array in CP 54/2016; and whenever necessary, special reference to their status will be given. Before dealing with divisive facts of the case, certain admitted facts have to be placed on record. The Company was incorporated on 31.7.2006 with an initial authorised capital of Rs. 10,00,000/- and it was increased to Rs. 11,00,000/- on 3.6.2009 and further to Rs. 50,00,000 on 5.3.15. The 2nd increase is in challenge by the Petitioner in CP 54/16. There is no dispute about the percentage of equity holding by the respective parties. The Petitioner and the Respondent No. 2 are Directors of the Company. Mr. Vinod Singh and Mr. P.P. Garg are members.
(3.) Then, we refer to facts in disagreement. It is claimed that the Petitioner has brought in huge funds amounting to Rs. 40,90,000/- but the Respondent No. 2 did not contribute anything. The Petitioner has given personal guarantee in addition to mortgage of the land, for development of a residential project "Palm Heights", with a loan of Rs. 7,50,00,000/- taken from the Syndicate Bank. The Petitioner raised the following acts of oppression and mismanagement in various paragraphs of his Petition in CP 54/16. "i. After part of the loan was released by Syndicate Bank, the said amount was not utilized for the purpose it was taken and therefore, the Petitioner addressed the Bank on 11.2.2016 to stop further release of loan. ii. The Respondent failed to convene meeting of the Board to avoid 'function' of the Board. iii. Respondent No. 2 happened to be sole signatory of the Bank account, he had siphoned off about 30 lacks of the company funds and evaded to hold meeting to pass a resolution to make the petitioner also joint signatory to operate the bank account. iv. The authorised capital was illegally increased from 11 lacks to 50 lacks without knowledge, information and notice to the Petitioners. For this no Board meeting or the AGM/EGM of the members was convened for the approval of increase of the authorised share capital. The Respondent has signed SH7 Form showing falsely that on 5.3.15 EGM was held. v. The name of the Company was changed from Onkareshwar Colonisers Pvt. Ltd. to Omkaleshwar Colonisers Pvt. Ltd. on 9.12.2015 with adopting any resolution by the Board or in the EGM of the members of the Company. This is contrary to Sec. 13 91) which requires that a Special Resolution is necessary for change of the name of the company. vi. For executing the project, the Respondent No. 2 did not obtain the approval of the Petition for finalization of civil contract, suppliers of construction material, suppliers of electrical, sanitary, cement and steel or for appointment of engineers etc and of sub-contractors, which amounts to oppression. vii. The Respondent No. 2 has committed financial mismanagement by buying various materials at a much higher prince, accepting 'kickbacks' and collected the money from the suppliers. He has also indulged in taking the bills for higher qualities of steel, cement and other material but received lesser quality and took differential amount in cash from the vendors. viii. During FY 2015-16, the Respondent No. 2 has raised funds from individuals including Mr. Ganga Sagar Singh, in a sum of Rs. 55,99,714, without authorization and approval from the Petitioner and no approval from the Board was given. Further, the Respondent No. 2 did not provide proper accounts relating to utilization of those funds. ix. The Respondent No. 2 pad Rs. 5,72,715 to Vinod Kumar Singh-one of the share holders (Respondent No. 4 in CP75/16) without any reason or purpose, merely because, Mr. Singh happened to be close associate of Respondent No. 2. x. Having collected huge amount towards booking of flats in Palm Heights, the Respondent No. 2 has not account for that amount to the Company. He has refused to furnish account of those bookings.";