Milap Chandra Jain, J. - (1.) THE above -noted company petition was filed by 29 petitioners. On the application of P.S. Nanawati and N.S. Chhajer, they were impleaded as Petitioners No. 30 and 31 in it vide order dated May 1,1991. Application under consideration has been moved by them for inspection of the account books and other records of the respondent Company M/s Hindustan Processors Ltd Bhilwara (hereinafter to be called 'the Respondent Company') with these allegations.
(2.) THEY have been illegally thrown out of management of the Respondent Company by passing illegal resolution on November 22, 1988. Their physical access to the office, factory premises, books of accounts statutory record and other records have been scaled by the respondents. They have formally been removed from the Board of Directors of the Company on December 14, 1988 on wholly flimsy and untenable grounds, namely, they had violated the provisions of Section 299 of the Companies Act (hereinafter to be called 'the Act') and had, therefore, automatically ceased to be the Directors of the Company as provided in Section 283 of the Act. Even the notices of the Annual General Meetings of the Company have not been sent to them. They are not being supplied with copies of the balance sheets. They have been deliberately kept in complete dark by the respondents about the day to day affairs of the Company by the sheer power of their might and they have been successful in illegally keeping them out of the management of the Respondent Company. They being the Directors of the Company have a statutory right under Section 209 of the Act to have access to all books of accounts and other statutory and relevant records of the Respondent Company. It is also necessary to have inspection of the books of accounts and record of the Respondent Company to support the Company petition. The respondents No. 3, 4 and 11 have filed their joint reply to the said application. The respondent No. 2 has also filed a separate reply. Two preliminary objections have been taken by the respondent No. 2 against the inspection application. Firstly, the applications have ceased to be the Directors of the Company, they are now mere share holders and share holders are no entitled for the inspection of the record and account books of the Company. Secondly, the applications have earlier filed Company Petition No. 4 of 1989 which was dismissed by this Court by its order dated September 28, 1989 (reported in 1990 (69) Company Cases 769), an appeal has been filed against this order, it is pending and no such application for inspection was moved either in the earlier Company Petition or has been moved in the appeal.
(3.) IN both the replies, it has averred as follows. The application themselves ceased to be the Directors of the Company under Section 283 of the Act on account of the violation of the provisions of Section 299(3) of the Act on their part as such they are not entitled to have any access to or to inspect the account books and record of the Respondent Company & unless this dispute is decided in their favour they cannot claim inspection. The notices of the Annual General Meeting are duly sent to them. The Annual accounts & balance sheet could not be prepared as the account books of the period prior to year 1988 are still in possession of the applicants, they are not giving them and a complaint has been filed against them in the court of the Chief Judicial Magistrate (Economic Offences), Rajasthan, Jaipur. The fact regarding vacation of office by the applicants was duly noted at the meeting of the Board dated December 14, 1988, notices to the above effect were also got published in various newspapers and intimation was sent to the applicants and also to the Registrar of the Companies, Rajasthan, Jaipur. The Share holders have no right to have access to or to inspect the account books and statutory record of the Company.;