S. Vijayaraghavan, Member - (1.) The present Company Petition being C.P. 217/2012 is filed on 13/05/2014 by invoking various provisions of the Companies Act, 1956 alleging certain acts of oppression and mismanagement from the part of the respondents as stated in the Petition. The C.P. No. 71/2014 has been moved ex-parte on urgent basis asking for some main and interim relief as prayed for in the said Petition. Ld. Counsel appearing for the Petitioner submitted that the Petitioner and the R-2 were employees in M/s. Usha Martin Ltd. and were habitually engaged in mechanical maintenance. In the course of their employment they formed a strong bond with each other and intended to start an enterprise of their own. The Petitioner was thereafter, introduced to the R-4 through another co-employee being Mr. Rajesh Jha, the husband of R-3. In the course of discussions between the petitioner, the R-2 and 4 along with the said Mr. Rajesh Jha it was decided that they would start a partnership firm with equal shares for Petitioner and the R-2 and 4. It was also decided that all of them would have an immediate,, veto on any action or business to be undertaken by the said firm. The aforesaid model was however altered due to business exigencies and it was decided to form a company instead of partnership while still operating on the partnership principles pre-decided between them and M/s. Prowess International Private Limited (hereinafter referred to as R-1 Company) was incorporated on 07/03/2005 under the provisions of the Companies Act, 1956 having its registered office at A-18, 6th Phase, Adityapur Industrial Area, Gamaria, Jamshedpur-828108, Jharkhand. The Petitioner, R-2 and R-4 incorporated R-1 Company in 2005 with a paid up capital of Rs. 3,00,000/- with equal shareholding and on the understanding that each would have equal say in the running of the R-1 Company and the same would be run on the principles of a partnership. The R-1 was incorporated with the primary object to inter alia manufacture, produce, design and develop products made of iron and steel or in combination with any ferrous of non-ferrous material, in which the Petitioner, R-2 and R-4 were the first directors. The authorized share capital of the R-1 Company as per its annual report adopted in the annual general meeting dated 28/09/2013 is Rs. 2,00,00,000/- divided into 20,00,000 equity shares of Rs. 10/- each. The paid up share capital of the R-1 Company is Rs. 1,40,00,000 comprising of 14,00,000 equity shares of Rs. 10/- each. The Petitioner is one of the promoters and founding members of the company and currently holds 333400 equity shares which represent 23.8% of the paid up share capital of the R-1 Company. Hence, the Petitioner is entitled to make the instant Petition and has requisite qualification under Section 399 of the Companies Act, 1956. R-2 and R-3 are presently directors in R-1 Company. The R-2 holds 333400 equity shares of the R-1 Company which is approximately 23.82% of the issued, subscribed and paid-up share capital of the R-1 Company. The R-3 does not hold any equity shares of and in the R-1 Company. The R-4 holds 333200 equity shares which is approximately 23.8% of the issued, subscribed and paid-up share capital of the R-1 Company. The Petitioner is one of directors of the R-1 Company and has been named as the managing director of the R-1 Company as reflected on the website of Ministry of Corporate Affairs, Government of India. The R-1 Company obtained transfer of a non-plant from Auto Steel Pvt. Ltd. (held on leasehold basis) and commenced operations on an immediate basis. The Petitioner, in fact, had arranged for the primary finances for such commencement through his connections with various banks mortgaging assess belonging to himself and/or his family members.
(2.) It is submitted by the Ld. Counsel for the Petitioner that in 2013, R-4 resigned as director and in his place, R-3 was appointed as director. Thereafter, disputes started arising between the Petitioner on one hand and R-2 & R-3 on the other. The R-2 and 3 started to take all decisions in relation to the management of R-1 in collusion with each other and disregarding the best interests of the R-1 Company and its shareholders. Further, the Respondents No. 2 and 3 have focused themselves on negating the involvement of the petitioner from the management and as a result the R-1 Company has suffered economic losses resulting in erosion of value of shareholders' investment. Every attempt of the Petitioner to object to the decisions was portrayed as his disregard and disrespect for the board and the members thereof. The objections made by the Petitioner at various board meetings have either been incorrectly noted or not noted at all. Further, instances of financial impropriety by employees of the R-1 Company to R-2 and R-3 have fallen on deaf ears and no action has been initiated due to personal bias in favour of such persons.
(3.) In the said Petition, it is alleged that the R-2 and R-3 insisted upon provision of inputs for a magazine in the English language only when the Petitioner had submitted his content in Hindi. The Ld. Counsel submitted that on 31/03/2013, a meeting of the Petitioner and R-2 and 3 took place. The R-2 circulated only the first page of the minutes of such meeting and it recorded that, the Petitioner's functional areas would be design, production, purchase and commercial. The R-2's functional areas were recorded as business development, marketing, projects inclusive of project related package finalization, customer services, outsourcing and finances. The functional areas of R-3 were as per the decision taken in April, 2013. Further, this note also recorded that in line with discussions with financial institutions, decision making should be unanimous and written approval of all three directors is a must. The record notes circulated vide email dated 31/07/2013 are annexed as AnnexureA-7 with the Petition.;