CHIRANJEEVI RATHNAM Vs. RAMESH

JUDGEMENT

(1.) The legal issue for decision before this Court is, whether a civil suit to declare the appointment/co-option of some of the defendants/Directors of a Private Limited Company as illegal and void; to grant permanent injunction restraining them from any manner functioning as Directors of that company; further injunction restraining the said company from conducting any Extraordinary General Body Meeting/Annual General Body is maintainable in a civil court, in the light of Section 430 of the Companies Act, 2013?

(2.) M/S Standard Fireworks Private Limited, which is the epicentre of the dispute, is a Private Limited Company controlled by three families namely, Yennarkay Ravindran Family (34% shares), Arunachalam Nadar of Pioneer Group (33% shares) and Chelladurai Nadar of Bell Group (33% shares). The 34% shares in M/s Standard Fireworks Private Limited Company held by Yennarkay Ravindran family are with three companies run by that family. Those three companies are M/s Rajarathnam Matches Private Limited, M/s Chiranjeevi Rathnam Matches Private Limited and M/s Selvarathnam Matches Private Limited. Each of these three companies hold 11.09% of share in M/s Standard Fireworks Private Limited. While so, due to heavy pressure and burden of work, Yennarkay R.Ravindran and Mrs.Thilagavathi/Directors of M/s Rajarathnam Matches Private Limited resigned from their directorship in the year 2003 and co-opted the plaintiffs, who are the employees of M/s Rajarathnam Matches Private Limited, as the Directors of the Company.

(3.) The plaint averment is that, Mr.Yennarkay Selvarathnam/second defendant requested calling for Extraordinary General Body Meeting(EGM), removal of directors, payment of dividend and external audit for the machinery investment. Those requests were considered and declined in the Board of Directors Meeting held on 31.08.2015 for the reasons stated. Since he was not able to succeed with his attempts, he wanted to remove the Directors, who are not accepting his demands. To achieve his illegal object, he has decided to capture all these three Match Industries viz. M/s Rajarathnam Matches Private Limited, M/s Chiranjeevi Rathnam Matches Private Limited and M/s Selvarathnam Matches Private Limited, held by his family members, which possess 33.27% of shares in the 9th defendant company namely, M/s Standard Fireworks Private Limited.